Dozens of Williamson County hemp and THC retailers are facing closure amid new state regulations, while hemp users could be fined or face jail time if Senate Bill 3 is signed by Governor Greg Abbott.
Senate Bill 3 passed the Texas House of Representatives in a 95-44 vote on May 21. The bill — which, as of June 5, sits at the governor’s desk for final approval — would ban the sale of hemp-derived products containing Delta THC variants. Delta variants are the psychoactive components of the cannabis plant. It would also prohibit non-psychoactive cannabinoids such as CBN.
Products with THC — including smokable and edible products, as well as ointments — have become more popular over the last half decade. Consumers often use products for pain and stress relief, as a sleep aid or an appetite stimulant to combat the appetite loss that comes with medical conditions like cancer and HIV.
Some products also come with side effects, including impairment and mood changes. This means certain doses and products could be used as recreational drugs.
Pinnacle Essentials is a Williamson County-based herbal wellness store, with locations in Georgetown, Cedar Park and Liberty Hill. Owner Kate Cerasoli estimates that half of her customers are purchasing purely for medicinal use, while the other half use it more recreationally.
Customers in Georgetown, she said, frequently look for solutions to sleep issues and pain. She said if the law is passed, it will eliminate products that are specially formulated to help with these ailments.
“THC is the key that opens the lock so that the other cannabinoids can get in and do their work,” Ms. Cerasoli said. “The plant grows with all of it in it, for a reason.”
Proponents of Senate Bill 3, including Lt. Gov. Dan Patrick, say consumers aren’t aware of what’s in the products they’re purchasing, or the risks THC products like gummies and cereal bites could pose on children if they’re accidentally consumed. Mr. Patrick said he believes some of the products target children.
“Nothing is more important than stopping a kid from getting a hold of this junk,” Mr. Patrick said during a press conference, while displaying a selection of edible hemp products after the Bill passed the Senate.
He also said grown men “in need of a snack” may mistakenly eat the products due to the poor labeling.
“We sell cereal bites [for adults],” Pinnacle Essentials Director of Operations Steve Marengo said, pointing out that the labeled product has an ingredients list printed on it and a QR code to a state-mandated third party ingredient test. “These are the same ones that Dan Patrick was throwing around the press conference.”
Ms. Cerasoli said Pinnacle Essentials doesn’t market to kids and that they avoid packaging that may appeal to children. The store only sells to adults over the age of 21.
State and local impacts
Hemp was legalized in Texas back in 2019, and products are sold at places like convenience stores, smoke shops, wellness shops and individual venders at community markets like Market Days in Georgetown. Hemp industry in Texas is estimated to have generated about $8 billion back in 2023, with more than 50,000 employees in the industry, according to Whitney Economics, which evaluates the cannabis industry.
Mr. Marengo said 97.65 percent of Pinnacle Essentials’ hemp products would be banned if the bill goes through.
Brandi Townsend — owner of Cozy Cannabis, a boutique cannabis dispensary on the Square — said Senate Bill 3, “would [nearly] take everything off the shelves.”
She opened her first store in Hutto as a mom with five kids, who chooses to use hemp products over wine to deal with her stress. She found that she wasn’t alone.
Many of her clients in Georgetown are older and use THC for medical purposes, she said. Her sales in Georgetown, temporarily, have increased since the bill passed. “They are stocking up and are pretty scared [they’ll lose access],” Ms. Townsend said.
She said a client with Parkinson’s disease used THC products that help them walk again. Ms. Townsend said the customer tried non-THC products — which would still be legal under the bill — with no success.
“Without [the THC], she literally cannot walk.” Ms. Townsend said.
Pinnacle Essentials has seen their full spectrum CBD tincture as being “a miracle” for customers who have adult children with autism.
“Suddenly they would eat, suddenly they were calmer and easier to deal with,” Ms. Cerasoli said.
The top-selling item at Pinnacle Essentials is the Live Resin D9 Gummies, made by Modern Herb Co. Ms. Cerasoli called these sleep-inducing gummies the “Sun City special.” Some customers have come in since the bill passed to purchase an entire case. The product contains a significant amount of THC, which is part of what makes it work, Ms. Cerasoli said.
She clarified the purpose of the product is to fall asleep, not to “get high.”
Pinnacle Essentials added 125 new customers into their system last week, with customers worried access would be cut off in the future. Some said they didn’t realize THC products were available in Texas until after they learned about the bill banning them
“Since SB 3 was announced, we reset our daily record for sales twice. We had the biggest month in the history of our business by a lot,” Mr. Marengo said.
Medical exemptions
Senate Bill 3 proposes an expansion of The Texas Compassionate Use Program, or TCUPS. This program allows physicians to write patients prescriptions for low-THC cannabis oil and gummies.
TCUPS was originally formed in 2016. There are currently three dispensaries — two in Austin and one in New Braunfels — licensed as medical dispensaries. The proposed program expansion would allow 12 more cannabis dispensaries, and would also raise the amount of THC allowed in the medical products.
However, Ms. Cerasoli has heard from her customers that the TCUPS program isn’t sufficient. Even with the proposed dosage increase, she estimated it wouldn’t be enough to provide them with relief. Additionally, she said that the products are very expensive, costing hundreds of dollars a month.
Ms. Townsend said her customers have called the TCUP program “a joke” due to the lack of availability and dosage levels compared to other products available today.
Even if 12 more dispensaries opened, she said it wouldn’t be enough to service the entire state of Texas.
Regulations are needed
Texas does not currently have a statewide age restriction on who can purchase hemp products or restrictions regarding where a hemp store can be located. This is something that the Texas Hemp Business Council — an organization that advocates for the hemp industry, consumer safety and education — has been trying to change.
Cozy Cannabis and Pinnacle Essentials are both involved in the Texas Hemp Business Council, and would support increased regulations across the industry as opposed to the full ban proposed in SB 3.
“Our industry has asked for better regulations,” Mr. Marengo said. “We take our role in the hemp industry very seriously, and we actually work very hard to operate ethically.”
Cozy Cannabis and Pinnacle Essentials both make an effort to only target adults with their products. The stores voluntarily enforce age checks and only sell to customers over the age of 21.
They also support raising licensing fees to safeguard who can sell hemp products, which would improve product quality and safety overall.
Ms. Townsend said Cozy Cannabis pays only $150 per year for their license. She said she considers this low price point dangerous, because it “allows for anybody, really, to get into the market.” She also supports banning the sale of hemp products in gas stations, emphasizing that these products should be sold in stores with employees trained to educate customers.
Pinnacle Essentials also said the state has to do a better job monitoring vendors and product quality.
“We’ve also been asking for more enforcement from the Department of State Health Services, which registers the hemp program,” Mr. Marengo said. “To give you an idea, [Pinnacle Essentials has] only been visited twice in four years. When they came in, they did not even check our hemp products. They actually checked to see if we were compliant with the new whipped cream law [banning nitrousoxide].”
Lobbying to the governor
In opposition to Senate Bill 3, the Texas Hemp Business Council delivered 5,000 letters and a petition with 118,000 signatures to Governor Abbott on June 2.
Pinnacle Essential personally submitted 165 letters from customers. Cozy Cannabis sent in customer letters as well.
“We’re hoping that Governor Abbott, being the Small Business Champion that he is, will veto this bill.” Mr. Marengo said.
Cozy Cannabis surveyed their customers across their locations about what they would do if the bill passed. Customer report found 40 percent would look to purchase the products illegally, while 17 percent said they would go to another state where THC products are legal.
Ms. Townsend is currently building a team to move Cozy Cannabis to another state, if the law goes through. She is considering North Carolina or Florida.
“Both [states] have common sense laws with age restriction and testing and labeling and packaging,” Ms. Townsend said. “All the things that we want here [in Texas] and are already doing without legislation being behind us.”
Ms. Cerasoli said if the bill goes through, Pinnacle Essentials would continue with their business using their wellness center model.
“We’d have to do a serious shift, obviously, and then hope that people are still looking for CBD and CBG,” she said. “Some of the other products we may have to expand into are like the [functional] mushroom gummies.”
Governor Greg Abbott has until June 22 to sign or veto the bill. If the bill is signed into law, it would go into effect September 1.
Dozens of Williamson County hemp and THC retailers are facing closure amid new state regulations, while hemp users could be fined or face jail time if Senate Bill 3 is signed by Governor Greg Read More
