04/08/2026
UPDATE:
The Texas H**p Business Council has filed a lawsuit challenging the recently adopted rules by the Texas Department of State Health Services (DSHS), which went into effect on March 31.
These rules impose significant new restrictions on the h**p industry, including expanded definitions, increased fees, and operational requirements that many businesses will struggle to meet. As written, they go beyond the intent of the law and create serious risks for compliant operators across the state.
THBC submitted detailed public comments during the rulemaking process outlining these concerns. Unfortunately, many of those issues were not adequately addressed in the final rules.
After careful review with legal counsel, THBC determined that litigation is necessary to protect the industry's integrity and ensure regulatory agencies operate within their authority.
Lawsuit Overview:
The plaintiffs argue that two state agencies — DSHS and HHSC — exceeded their authority by essentially making new law through rulemaking, substituting their own policy judgments for the Legislature's. During the 2025 legislative session, the Texas Legislature tried to pass stricter h**p regulation (SB 3), the Governor vetoed it, two special sessions failed to revive it, and the result was no new law. The agencies then effectively achieved the same outcome through regulation anyway.
Four Specific Regulatory Problems Challenged in Lawsuit:
Redefining "h**p" in practice — The 2019 law set a clear limit of 0.3% delta-9 THC. The new rules apply a post-decarboxylation formula that factors in THCA, making the real compliance threshold far more restrictive than what the Legislature actually enacted.
Blocking interstate imports — The rules prohibit the transport and processing of h**p plants and plant material used in manufacturing based on the same, non-statutory THC metric, creating a substantial barrier to in-state manufacturing not authorized by the Legislature.
Dramatic fee increases — Licensing fees jumped from $250 to $10,000 per facility and retail registrations from $150 to $5,000 per location, functioning as economic barriers the plaintiffs say lack statutory authorization.
Excessive penalties - Imposes violations that are disproportionate to the nature of the alleged violation.
The Bottom Line
The suit argues this is a "separation of powers" violation — that the agencies did through rulemaking what the Legislature declined to do through the democratic process.
Read official petition here: THBC Petition and Application for TRO Injunction
Next Steps:
THBC seeks a Temporary Restraining Order (TRO) — an emergency court order to immediately pause enforcement while the case moves forward
Temporary Injunction hearing — if the TRO is granted, THBC moves to secure a temporary injunction to keep enforcement paused for the duration of the case; if the TRO is denied, this path can still be pursued.
Discovery & pre-trial — both sides exchange evidence and build their cases
Trial & Permanent Injunction — a final ruling on the merits; a win results in a lasting court order blocking enforcement
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