The Lone Star State Is Feeling Lonely At The Bottom Of The Cannabis Industry – JD Supra

Texas is heading for a boom—it is attracting tech businesses and growing its population, as individuals transplant from other states looking for a lower cost of living and better quality of life. Texas also has a fledgling medical cannabis program that may be headed for a boom as well. Texas’s medical cannabis program is small in both patient size and product offering, but there is a seed that can sprout growth. Now, after five years of effective dormancy, Texas lawmakers see an opportunity to fix the program and a possible plug for a few budgetary holes created by the COVID-19 pandemic.

Texas’s medical marijuana program currently has 3,519 registered patients, a blip compared to its population size. Indeed, the program is among the most restrictive in the country. In addition to an extremely limited number of qualifying conditions (intractable epilepsy, terminal cancer, multiple sclerosis, Parkinson’s disease and Lou Gehrig’s disease or ALS to name the few), the program allows medical products that only contain 0.5% THC (the psychoactive ingredient in marijuana). Yet hemp and hemp-derived CBD products, which are federally legal and require no registration or restriction to purchase, contain 0.3% THC. The 0.2% difference is, generally speaking, negligible and likely the reason why more Texans are not registered for the medical cannabis program despite the fact that advocates say 2 million people would be eligible for it under the current law. As such, the state has only three licensed medical cannabis businesses and they are struggling to be profitable.

By comparison, Georgia, which is launching its medical cannabis program this year and is also considered by the industry to be a very restrictive program, is allowing cannabis oil products that contain 5.0% THC and intends to issue 6 cultivation licenses at the outset. With southern state cannabis programs coming online (Georgia, Louisiana, and Oklahoma, for example) and a possible change in the federal landscape on the horizon, some Texas lawmakers are advocating for an expansion of Texas’s medical cannabis program. According to the Texas Tribune, as of December 14, 2020, at least seven bills have been filed by lawmakers seeking to expand Texas’s Compassionate Use Program. State Senator Jose Menéndez (D-San Antonio) authored a far-reaching bill that would make more patients eligible, strike the THC cap and lower business fees, among other changes. “We’re pretty dang close to the bottom. We’re pretty far behind,” Menéndez said. Such an expansion of the program would certainly benefit current and prospective medical patients and would attract cannabis companies to the state, all of which leads to more tax revenue for Texas.

All eyes are on the 2021 legislative session. Please contact us with any questions regarding Texas’s or Georgia’s medical cannabis programs.


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