Takeaways
- New compliance requirements are coming: Texas agencies will soon roll out stricter rules on age verification, labeling, and retailer obligations.
- Retailers face heightened risk: Noncompliance could result in loss of permits and increased enforcement by multiple state agencies.
- Costs may rise: Licensing fees and compliance expenses are expected to increase, reshaping the competitive landscape.
On September 10, 2025, Texas Governor Greg Abbott issued Executive Order GA-56 to impose more rigorous regulations on THC products derived from hemp. The order comes amid legislative gridlock on how to regulate or ban hemp-derived THC products, as we previously reported on July 24 and July 7.
Key Provisions of EO GA-56
- Age restrictions: The order directs the Texas Department of State Health Services (DSHS) and the Texas Alcoholic Beverage Commission (TABC) to ban the sale of hemp-derived THC products to minors, to require ID verification for all customers, and to revoke retailer permits for violations.
- Regulatory framework & rulemaking: The agencies are mandated to begin the rulemaking process immediately to flesh out the details: age threshold, labeling, testing, record keeping, and enforcement. The order also tasks them with reviewing existing regulations and considering new ones.
- Enforcement and penalties: Non-compliance can lead to loss of permit for retailers. More stringent oversight is called for, along with boosted enforcement from DSHS, TABC, and Texas Department of Public Safety.
- Labels, testing, and transparency: The order directs improvements in labeling and testing and better recordkeeping to increase oversight.
- Licensing fees/retailer obligations: There is a mandate to examine licensing fees, possibly increasing them to support enforcement. Retailers will need to adapt to stricter regulatory standards.
Many details, however, remain unsettled. The order does not establish a clear timeline for when new rules will take effect. Questions also persist about which specific products might face heightened restrictions or bans. As state agencies begin drafting rules, businesses and advocacy groups will likely push for clarity on definitions, compliance requirements, and enforcement procedures.
The implications are significant for retailers and manufacturers. Companies may need to invest in stricter age-verification systems, revise labeling to meet updated standards, and prepare for potential increases in licensing fees or compliance costs. Manufacturers that already adhere to rigorous testing protocols may gain a competitive advantage as enforcement tightens. Consumers are likely to see stricter marketing oversight. Meanwhile, regulators will face pressure to develop enforceable, consistent rules while balancing industry interests with public health concerns.
The order also raises broader legal and policy considerations. Texas laws and regulations must remain consistent with federal hemp laws under the 2018 Farm Bill, which permits hemp and its derivatives with delta-9 THC concentrations below 0.3 percent. Overly restrictive or inconsistently applied rules could trigger constitutional or due-process challenges. Businesses that have invested in product lines now at risk may need to assess potential legal strategies or diversification options.
Executive Order GA-56 underscores the state's evolving stance on hemp-derived cannabinoids—seeking to protect minors without completely closing the market to adult consumers and legitimate businesses. Stakeholders should closely monitor the forthcoming rulemaking process, participate in public comment opportunities, and adjust compliance frameworks proactively. For the Texas hemp and cannabis industry, this moment represents both regulatory uncertainty and an opportunity to help shape the future landscape.
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