Texas Hemp is Being Restructured — What the New DSHS Rules Mean for Your Operation
The Texas Department of State Health Services has finalized sweeping new rules governing the manufacture, distribution, and retail sale of consumable hemp products in the state. Adopted on March 2, 2026, and effective March 31, 2026, these rules — codified in 25 TAC Chapter 300 — represent the most significant regulatory overhaul the Texas hemp industry has ever faced. If you are a manufacturer, processor, distributor, or retailer operating in this space, the window to understand and adapt to these requirements is closing fast.
This post walks through what the rules actually say, what they require of operators, and where the legal landscape currently stands.
How We Got Here
The rules stem directly from Governor Greg Abbott's Executive Order GA-56, issued September 10, 2025, after the Texas Legislature spent the better part of the year attempting — and failing — to reach consensus on hemp policy. The Senate passed an outright ban. The House refused it. Abbott vetoed SB 3, called two consecutive special sessions, and when those also stalled, bypassed the Legislature entirely by directing DSHS, the Texas Alcoholic Beverage Commission (TABC), and the Department of Public Safety to develop regulations through rulemaking.
Over 1,400 public comments were submitted during the rulemaking process. The industry pushed back hard on several provisions. Some adjustments were made. Most were not. What follows is what the state has chosen to enforce beginning this month.
The THCA Rule: What It Does and Why It Matters
The most operationally consequential provision in the new rules is the redefinition of how THC is calculated for compliance purposes.
Under the prior framework, products were tested for delta-9 THC only. The new rule (§300.101(44)–(45)) adds THCA to the calculation using the following formula:
Total delta-9 THC = (0.877 × THCA) + delta-9 THC
THCA is the acidic precursor to delta-9 THC. When heated or smoked, THCA converts to delta-9 THC through decarboxylation. Because hemp flower and other smokable products are often high in THCA while technically showing compliant delta-9 levels in isolation, this calculation change is effectively a ban on the retail sale of smokable hemp products in Texas. Most THCA flower that was legal under prior testing methodology will exceed the 0.3% threshold under this formula.
Critically, the rule applies to all consumable hemp products, not smokable formats alone. Manufacturers producing edibles, beverages, tinctures, and topicals must verify that their finished products pass total delta-9 THC testing under this new formula before those products can be sold, distributed, or introduced into Texas commerce.
Edible products — gummies, beverages, tinctures, capsules — are in a fundamentally different position than flower. A compliant delta-9 edible does not accumulate meaningful THCA through processing, and the formula does not reach into those categories the same way it does smokables. Edibles remain legal, provided all other requirements under the rules are met.
Two Mandatory Rounds of Testing
The new rules establish a two-stage testing requirement that applies to all consumable hemp products before they can be sold in Texas.
Stage One — Raw Hemp Testing (§300.301(a)): Before any hemp plant is processed or used in manufacture, a representative sample must be tested for the full cannabinoid profile (including all acid forms), the presence and quantity of heavy metals, pesticides, and microbial contamination, and the concentration of delta-9 THC, total delta-9 THC, and total THC. The sample must confirm a total delta-9 THC concentration at or below 0.3% on a dry weight basis.
Stage Two — Finished Product Testing (§300.301(b)): Before any consumable hemp product — including hemp-derived ingredients used in further processing — is sold at retail, distributed, or otherwise introduced into Texas commerce, a representative sample must again be tested. This test must cover the full cannabinoid profile and concentrations, residual solvents, heavy metals, pesticides, and harmful pathogens, and must confirm compliant delta-9 THC levels.
Both tests must be conducted by an ISO/IEC 17025-accredited laboratory. All results must be documented in a Certificate of Analysis (COA) that is available to DSHS electronically upon request.
The COA requirements are detailed (§300.301(c)–(d)) and include the laboratory's name, address, and contact information; the cultivator's or manufacturer's name and address; sampler identification; lot ID number; sample receipt and analysis dates; analytical methods and instrumentation used; limits of detection and quantitation; THC results by percentage; an expiration date; and a QR code linking to the accredited lab's verification data.
Fees: A Major Increase Across the Board
The fee structure under the new rules is a significant departure from what operators have paid historically.
License/Registration TypePrevious FeeNew FeeManufacturer / Processor License$258 per facility$10,000 per facility annuallyRetail Hemp Registration$155 per location$5,000 per location annuallyLate Renewal Delinquency FeeN/A$1,000Change of Ownership AmendmentN/A$10,000
These are not prorated. A retailer with five locations now faces $25,000 per year in registration fees alone. A manufacturer operating multiple facilities will pay $10,000 per facility per year, plus the cost of the mandatory two-stage testing protocol, upgraded recordkeeping systems, and any necessary reformulation or packaging changes. For context, TABC charges Texas distillers $3,000 every two years — an annual equivalent of $1,500 — for a product category the state has regulated for decades.
Recordkeeping Requirements: A Step Change in Documentation
The new rules introduce pharmaceutical-grade recordkeeping obligations that will require many hemp manufacturers to substantially upgrade their internal systems.
Master Production Records (§300.204): For each consumable hemp product type, manufacturers must maintain a signed master production record that includes the name, weight, and measure of each ingredient; a complete ingredient list; any calculated excess or byproduct; and complete manufacturing instructions and specifications. A second person must independently verify, date, and sign these records.
Batch Production Records (§300.205): A separate record must be prepared for every single production run. These records must document each step in the manufacturing process, including dates, equipment identification, ingredient weights and measures, in-process results, laboratory control results, packaging and labeling area inspections, actual yield, sampling performed, any investigation conducted, any destruction of THC, any rework, and the COA for each hemp or hemp derivative used in the batch.
Source and Traceability Records (§300.206): All raw materials must come from approved sources — defined as hemp grown under a USDA-approved state plan, compatible tribal plan, or Texas Agriculture Code Chapter 121. Documentation must identify each ingredient's name, batch or lot number from the original package, date of manufacture, date received at the facility, expiration or use-by date, and total delta-9 THC concentration level.
Recall Plans (§300.207): Every manufacturer, processor, and distributor must maintain written recall procedures covering identification of recalled products, immediate removal and segregation from active inventory, return or disposal procedures, and public notification protocols to protect public health.
Consumer Complaint Logs (§300.208): Formal written procedures must be established for receiving, reviewing, and evaluating complaints. All safety-related complaints must be investigated. Records of those investigations must be retained.
All records must be maintained for a minimum of three years.
Labeling and Packaging: Updated Requirements
Several changes to labeling and packaging take effect alongside the testing and recordkeeping provisions.
Labels must now include more comprehensive warning statements (§300.402). A URL linking directly to the COA is required on all products; a QR code may also be included but is not mandatory on its own. Labels that mislead consumers into thinking a product does not contain hemp-derived cannabinoids, or that suggest a product is intended for medical use, are prohibited (§300.407).
Packaging must be tamper-evident, child-resistant, and — where the product contains multiple servings or multiple products are included in one transaction — resealable, while maintaining the child-resistant mechanism intact (§300.405).
Age Verification: Mandatory ID Checks
Effective with the new rules (§300.701–702), neither consumable hemp manufacturers nor retail hemp registrants may sell to anyone under the age of 21. Proof of valid government-issued identification is required at the point of sale. Violations may result in license or registration revocation.
Inspection and Enforcement
The new rules expand DSHS enforcement authority and formalize TABC's role in hemp compliance. Authorized employees of both agencies — after presenting proper credentials — may enter licensed premises at reasonable times to inspect, collect samples, and take photographs (§300.103). Both manufacturers and retail registrants must provide written consent for TABC inspections as a condition of licensure and registration (§300.502).
On the enforcement side, each day a violation continues counts as a separate violation when calculating administrative penalties (§300.601). Newly enumerated prohibited acts include refusal to allow inspection, refusal to allow sample collection or photography, refusal to provide records, and threatening or aggressive behavior toward inspectors (§300.602). Violations result in a written notice of violation sent by certified mail, which must include the facts supporting the determination and the amount of the recommended penalty. A business receiving a notice has 20 business days to accept the penalty or request a hearing (§300.606).
One provision worth noting: materials containing total delta-9 THC levels above the acceptable hemp THC level may not be transported into Texas for further processing (§300.206(c)). This transport restriction adds a compliance layer for out-of-state suppliers and processors shipping ingredients into the Texas market.
The Legal Challenge
The Texas Hemp Business Council has publicly stated that it intends to challenge these rules in court and will seek an injunction while the litigation is pending. The core legal argument is that DSHS exceeded its statutory authority by redefining "total delta-9 THC" to include THCA through rulemaking — a redefinition that effectively bans an entire product category without legislative action, which the industry contends is a function reserved to the Legislature, not a state health agency.
This argument runs parallel to a question already before the Texas Supreme Court. In Sky Marketing Corp. v. DSHS — argued January 14, 2026 and awaiting a decision — the Court is considering whether DSHS acted within the bounds of its authority when it previously attempted to reclassify hemp-derived cannabinoids through informal agency action. A ruling favorable to the hemp industry in that case could directly affect the viability of the new rules as well.
Whether a court acts before March 31 remains to be seen. At this writing, no injunction has been granted and no filing date for the new challenge has been announced. Operators cannot plan around relief that has not yet materialized.
What Operators Need to Do Now
Manufacturers and processors should audit their current product lines against the new total delta-9 THC formula immediately. Any product that relies on elevated THCA for its cannabinoid profile should be evaluated for reformulation or removal from the Texas market. Both stages of mandatory testing must be in place before products enter commerce. Master production records and batch production records that comply with the new standards must be in place by the effective date. Recall plans and consumer complaint procedures must be documented. License renewals must be submitted at the new $10,000 fee.
Retailers must update point-of-sale procedures to require age verification and government-issued ID for every hemp transaction. Written consent for TABC inspection must be provided with the new registration. The registration fee is now $5,000 per location. Retailers should assess their inventory for smokable products that will no longer be saleable after March 31 and plan accordingly — no grace period has been provided.
Distributors must verify that all products in their supply chain have compliant COAs under the new testing formula before those products are shipped or introduced into Texas commerce. The transport restriction on ingredients exceeding acceptable THC levels adds a supply chain compliance obligation that was not present under prior rules.
The new DSHS rules represent a fundamental restructuring of what it means to operate a compliant hemp business in Texas. The compliance requirements are comprehensive, the fees are substantially higher than anything the industry has previously encountered, and the effective date offers little runway. The legal challenge ahead may change the picture — but until it does, the rules as written are the rules that govern the market.
Operators who have not yet begun working through the full rule text are encouraged to do so. The full text of the adopted rules is available at dshs.texas.gov/consumable-hemp-program, and the Texas Hemp Business Council's breakdown is available at texashempbusinesscouncil.com.
