Proposal Would Increase Hemp License Fees
January 11, 2026 – Texas state health officials have proposed sweeping changes to hemp regulations that include dramatic increases in licensing fees, prompting warnings from industry members that the rules could effectively shut down small, in-state businesses while favoring large, out-of-state operators.
Under proposed rules published by the Texas Department of State Health Services, manufacturer licenses would rise from $250 to $25,000 per facility per year, while retail registrations would increase from $150 to $20,000 per location annually. The proposed hikes represent increases of more than 13,000 percent for some businesses. Supporters argue the changes are necessary to rein in an industry they believe has grown too large and lacks sufficient oversight.
The rules also include provisions broadly supported by the hemp industry, such as setting a minimum purchase age of 21, requiring age verification, and mandating product recalls. However, new testing standards for THC levels in consumable hemp products have sparked major concern. Industry representatives say the limits would effectively eliminate the use of natural hemp flower in edibles and smokable products, while allowing more synthetically derived THC alternatives to dominate the market.
Opponents argue the licensing fees would fundamentally reshape who can afford to operate legally in Texas. Many say the state’s revenue projections assume most existing retailers will pay the higher fees, an assumption critics contend is unrealistic and would push small operators out of business rather than into compliance.
Public health advocates backing the fee increases say the hemp industry generates significant revenue and should shoulder the cost of regulation, enforcement, and the broader social impacts of intoxicating products. Some have called for even stricter measures, including higher minimum purchase ages and additional financial contributions from hemp businesses toward public education and treatment programs.
Veterans and medical users have also raised concerns, warning that restricting access to naturally derived hemp products could drive consumers back into unregulated markets. The public comment period on the proposed rules runs through Jan. 26, with implementation timing still uncertain if the rules are approved.
