SB 2952

relating to the regulation of hemp and nonconsumable hemp products;
increasing a criminal penalty; increasing a civil penalty and
providing other penalties; requiring an occupational license;
imposing and authorizing certain fees.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Section 12.020(c), Agriculture Code, is amended
(c)  The provisions of law subject to this section and the
applicable penalty amounts are as follows:
Provision
                     
                     Amount of Penalty
Chapters 13, 14A, 18, 19, 41, 46, 61, 72, 73,
                     
                     not more than $5,000
74, 76, 94, 95, 101, 102, 103, 122, 123, 125,
Subchapters A, B, and C, Chapter 71
                     
                     not more than $5,000
Chapter 14
                     
                     not more than $10,000
Chapter 1951, Occupations Code
                     
                     not more than $5,000
Code
                     
                     not more than $5,000
Section 91.009
                     
                     not more than $5,000.
SECTION 2.  Section 121.002, Agriculture Code, is amended to
Sec. 121.002.  LEGISLATIVE FINDINGS; INTENT.  (a)  The
legislature finds that nothing in 7 U.S.C. Section 1639p:
(1)  preempts or limits any law of this state that:
(A)  regulates the production of hemp; or
(B)  is more stringent than 7 U.S.C. Section 1639o
(2)  prohibits the production of hemp in this state, if
the production of hemp is not otherwise prohibited by this state.
(b)  It is the intent of the legislature that this state have
primary regulatory authority over the production of hemp in this
(c)  It is the intent of the legislature that the statutory
definition of hemp shall not include any material that is not itself
naturally created in the plant Cannabis sativa L.
(d)  It is the intent of the legislature that the word
"derivatives" in the definition of hemp shall refer only to first
order derivatives of the plant Cannabis sativa L.
SECTION 3.  Section 121.003(a), Agriculture Code, is amended
(a)  The department, after consulting with the governor and
attorney general, shall develop a state plan to monitor and
regulate the production of hemp in this state.  The plan must comply
(2)  Chapters [Chapter] 122 and 123; and
(3)  Chapter 443, Health and Safety Code.
SECTION 4.  Section 122.001, Agriculture Code, is amended to
Sec. 122.001.  DEFINITIONS.  In this chapter:
(1)  "Cultivate" means to plant, irrigate, cultivate,
(2)  "Delta-9 tetrahydrocannabinol concentration"
(A)  a procedure for testing a sample using post
decarboxylation, such that all delta-9 tetrahydrocannabinolic acid
in the sample, where applicable, has been converted to delta-9
tetrahydrocannabinol, thereby identifying the total percentage by
weight of delta-9 tetrahydrocannabinol, on a dry weight basis; or
(B)  a procedure for testing a sample using a
conversion factor, by identifying the sum of the percentage by
weight, on a dry weight basis where applicable, of delta-9
tetrahydrocannabinolic acid multiplied by 0.877 plus the
percentage by weight, on a dry weight basis where applicable, of
delta-9 tetrahydrocannabinol, to calculate the total percentage by
weight of delta-9 tetrahydrocannabinol, on a dry weight basis.
(3)  "Disposal" means an activity that irreversibly
transitions a non-compliant substance into a non-retrievable and
non-ingestible form that is unfit to enter the stream of commerce.
(4)  "Dry weight basis" means a basis for expressing
the percentage of a chemical in a substance after removing the
(5)  "Governing person" has the meaning assigned by
Section 1.002, Business Organizations Code.
(6) [(3)]  "Handle" means to possess, manipulate, or
(A)  at a licensed location [on premises owned,
operated, or controlled by a license holder] for any period of time;
(B)  in a vehicle for any period of time other than
during the actual transport of the plant from a licensed location
[premises owned, operated, or controlled by a license holder] to:
(i)  a licensed location of [premises owned,
operated, or controlled by] another license holder; [or]
(ii)  a person licensed under Chapter 123;
(iii)  a person licensed under Chapter 443,
(7) [(4)]  "Hemp" has the meaning assigned by Section
(8) [(5)]  "Institution of higher education" has the
meaning assigned by Section 61.003, Education Code.
(9) [(6)]  "License" means a hemp grower's license
(10) [(7)]  "License holder" means an individual or
business entity holding a license.
(11)  "Licensed location" means a premises at which a
license holder operates a license issued under this chapter.
(12) [(8)]  "Nonconsumable hemp product" means a
product that contains hemp, other than a consumable hemp product as
defined by Section 443.001, Health and Safety Code.  The term
includes cloth, cordage, fiber, fuel, paint, paper, particleboard,
and plastics containing [derived from] hemp.
(13) [(9)]  "Plot" means a contiguous area in a field,
greenhouse, or indoor growing structure containing the same variety
or cultivar of hemp throughout the area.
(14)  "Tetrahydrocannabinol" means any
tetrahydrocannabinol, including its salts, isomers, and salts of
isomers whenever the existence of such salts, isomers, or salts of
isomers is possible within the specific chemical designation.
(15)  "Total tetrahydrocannabinol concentration" shall
(A)  a procedure for testing a sample using post
decarboxylation, such that all tetrahydrocannabinolic acids in the
sample, where applicable, have been converted to
tetrahydrocannabinols, thereby identifying the total percentage by
weight of tetrahydrocannabinols, on a dry weight basis; or
(B)  a procedure for testing a sample using a
conversion factor, by identifying the sum of the percentage by
weight, on a dry weight basis where applicable, of
tetrahydrocannabinolic acids multiplied by 0.877 plus the
percentage by weight, on a dry weight basis where applicable, of
tetrahydrocannabinols, to calculate the total percentage by weight
of tetrahydrocannabinols, on a dry weight basis.
SECTION 5.  Subchapter A, Chapter 122, Agriculture Code, is
amended by adding Section 122.005 to read as follows:
Sec. 122.005.  APPLICABILITY OF CHAPTER.  This chapter does
not apply to a patient, organization, person, product, or activity
regulated under Chapter 487, Health and Safety Code.
SECTION 6.  Sections 122.052(a) and (b), Agriculture Code,
are amended to read as follows:
(a)  The department shall set and collect:
(1)  an application fee for an initial license in an
(2)  a license renewal fee in an amount not to exceed
(3)  a participation fee for each location described by
Section 122.103 [122.103(a)(1) and each location added after the
application is submitted] in an amount not to exceed $100;
(4)  a site modification fee for each change to a
location described by Section 122.103 [122.103(a)(1)] in an amount
(5)  a collection and testing fee for each preharvest
test or postharvest test if performed by the department in an amount
(6)  any other fee the department determines necessary.
(b)  [A fee set by the department under this section may not
exceed the amount necessary to administer this chapter.]  The
comptroller may authorize the department to collect a fee described
by Subsection (a) in an amount greater than the maximum amount
provided by that subsection if necessary to cover the department's
costs of administering this chapter.
SECTION 7.  Sections 122.053(b), (c), and (d), Agriculture
Code, are amended to read as follows:
(b)  The department may enter onto land described by Section
122.103 [122.103(a)(1)], conduct inspections, and collect and test
(c)  Using [participation] fees set and collected under
Section 122.052 [122.052(a)(3)], the department shall pay the cost
of inspections under this section.
(d)  The Department of Public Safety or a state or local law
enforcement agency may inspect, collect samples from, or test
plants from any portion of a plot to ensure compliance with this
chapter.  A license holder shall allow the Department of Public
Safety or a state or local law enforcement agency access to the plot
and the property on which the plot is located for purposes of this
SECTION 8.  Section 122.054, Agriculture Code, is amended to
Sec. 122.054.  SAMPLE COLLECTION AND TESTING.  (a)  The
department may collect samples and perform testing or contract with
a laboratory for the performance of that collection and testing on
behalf of the department.  A test performed by a laboratory on
behalf of the department is considered to be performed by the
department for purposes of this chapter.
(b)  Testing for delta-9 tetrahydrocannabinol concentration
performed under this section must consider the conversion of any
quantifiable tetrahydrocannabinolic acid into
(c)  A test result showing a delta-9 tetrahydrocannabinol
concentration of more than 0.3 percent is conclusive evidence that
the substance represented by the sample is not compliant and is
SECTION 9.  Sections 122.055(a) and (b), Agriculture Code,
are amended to read as follows:
(a)  The department shall develop a shipping certificate or
cargo manifest which the department shall issue to a license holder
in connection with the transportation of a shipment of hemp [plant
material] originating in this state, other than sterilized seeds
that are incapable of beginning germination.
(b)  A certificate or manifest developed under Subsection
(a) must include a unique identifying number for the shipment and
the department's contact information to allow law enforcement
during a roadside inspection of a motor vehicle transporting the
shipment to verify that the shipment consists of hemp [cultivated]
in compliance with this chapter.
SECTION 10.  Section 122.101(a), Agriculture Code, is
(a)  Except as provided by Subsection (b), a person [or the
person's agent] may not cultivate or handle hemp in this state [or
transport hemp outside of this state] unless the person holds a
SECTION 11.  Section 122.102, Agriculture Code, is amended
by adding Subsection (c) to read as follows:
(c)  An individual who is not a legal citizen of the United
(1)  hold a license under this subchapter; or
(2)  be a governing person or owner of a business entity
that holds a license under this subchapter.
SECTION 12.  Section 122.103, Agriculture Code, is amended
by amending Subsection (a) and adding Subsections (d) and (e) to
(a)  A person may apply for a license under this subchapter
by submitting an application to the department on a form and in the
manner prescribed by the department.  The application must be
(1)  a legal description of each location where the
applicant intends to cultivate or handle hemp and the global
positioning system coordinates for the perimeter of each location;
(2)  written consent from the applicant or the property
owner if the applicant is not the property owner allowing the
department, the Department of Public Safety, and any other state or
local law enforcement agency to enter onto all premises where hemp
is cultivated or handled to conduct a physical inspection or to
ensure compliance with this chapter and rules adopted under this
(3)  the application fee; [and]
(4)  a description of the intended use and crop type of
the hemp plant the applicant intends to cultivate, which must be
(A)  an industrial use, which must be further
described as one of the following crop types:
(iv)  a hybrid of the crop types described by
(B)  a cannabinoid use, which must be further
described as one of the following crop types:
(5)  a description of the growing conditions of the
location where the applicant intends to cultivate or handle hemp,
(6)  any other information required by department rule.
(d)  The department may only issue a license to an applicant
for a location that is at least one-half acre and with a requirement
(A)  for a location that is in the open, 300
(B)  for a location that is under protection, 100
(1)  consider an incomplete application; or
(2)  issue a license to a person with a history of
willful noncompliance of any laws related to hemp in any
SECTION 13.  Section 122.152, Agriculture Code, is amended
by amending Subsection (b) and adding Subsection (e) to read as
(b)  A laboratory is eligible for registration if the
(1)  is registered with the Federal Drug Enforcement
(2)  submits to the department proof of accreditation
by an independent accreditation body in accordance with
International Organization for Standardization ISO/IEC 17025 or a
comparable or successor standard and any required fee.
(e)  The department shall revoke a laboratory's registration
if the department identifies a pattern of inconsistent results in
SECTION 14.  Section 122.202, Agriculture Code, is amended
by amending Subsection (b) and adding Subsections (c), (d), and (e)
(b)  Except as provided by this section, if [If] the results
of a preharvest and, if applicable, postharvest test performed on a
sample show a delta-9 tetrahydrocannabinol concentration of more
than 0.3 percent on a dry weight basis,[:
[(1)]  the license holder shall dispose of or destroy
all plants represented by the sample:
(1) [(A)]  in the manner prescribed by federal law;
(2)  using a reverse distributor registered with the
Federal Drug Enforcement Agency [(B) in a manner approved by the
department that does not conflict with federal law]; or
(3)  at the licensed location, if:
(A)  the license holder notifies the department of
the license holder's intent to dispose of or destroy the plants;
(B)  the department approves of the disposal or
(C)  the license holder submits documentation to
the department of the disposal or destruction in the manner
prescribed by the department, including by submitting videos or
photographs of the disposal or destruction or by allowing a
department representative to witness the disposal or destruction.
(c)  A license holder may remediate plants represented by a
preharvest sample described by Subsection (b) if:
(1)  [(2)  if] the department determines the plants
represented by the sample reached that concentration solely as a
(2)  the type of hemp seed planted by the license holder
(A)  certified or approved under Section 122.252
as "grain hemp crop", "fiber hemp crop", "seed hemp crop" or a
(B)  reported as "grain hemp crop", "fiber hemp
crop", "seed hemp crop" or a hybrid of such crop types on the
license holder's application for a license under Section 122.103;
(3)  the license holder is contracted to sell the
plants to a nonconsumable hemp product manufacturer in this state;
(4)  the license holder fulfills any other department
requirements [, the license holder is subject to Section 122.403(c)
[(A) trim the plants until the delta-9
tetrahydrocannabinol concentration of the plants is not more than
0.3 percent on a dry weight basis and dispose of the noncompliant
parts of the plants in a manner approved by the department;
[(B) process the plants into fiber with a delta-9
tetrahydrocannabinol concentration of not more than 0.3 percent on
a dry weight basis and dispose of any remaining parts of the plants
in a manner approved by the department; or
[(C) take any other corrective action consistent
with federal regulations adopted under 7 U.S.C. Chapter 38,
(d)  A license holder described by Subsection (c) may
(1)  separating and disposing of or destroying flower
or floral material, including buds and trichomes, and retaining the
stalks, fibers, grain, or seed of the plants;
(2)  properly raking and retting the plants for a
minimum of 30 days to dispose of or destroy flower or floral
(3)  remediating in another similar method that
disposes of or destroys any flower or floral material containing
tetrahydrocannabinol and that is approved by the department.
(e)  Plants remediated under this section must undergo
postharvest testing to ensure the plants have a delta-9
tetrahydrocannabinol concentration of not more than 0.3 percent
before the hemp enters the stream of commerce.
SECTION 15.  Subchapter E, Chapter 122, Agriculture Code, is
amended by adding Section 122.203 to read as follows:
Sec. 122.203.  PLANTING AND HARVESTING VERIFICATION.  (a)
Not later than the 30th day after a license holder plants hemp
authorized under the license, the license holder shall submit to
the department, in the manner prescribed by the department:
(1)  the amount, type, and variety of each hemp seed
(2)  a description of the plot where the seeds were
(b)  Not later than the 30th day after a license holder
harvests hemp plants, the license holder shall submit to the
department, in the manner prescribed by the department:
(1)  the amount, type, and variety of each hemp plant
(2)  a description of the plot where the plants were
(c)  The department may conduct an inspection of a location
indicated on any document submitted under this section.
SECTION 16.  Section 122.252, Agriculture Code, is amended
by amending Subsection (d) and adding Subsection (e) to read as
(d)  The department shall maintain and make available to the
general public [license holders] a list of hemp seeds certified or
approved under this section.  The list must be published on the
department's Internet website, updated regularly, and include for
(1)  an identification number for each seed;
(2)  the sex, source, and photoperiod of each seed;
(3)  the intended use and crop type produced by the
(A)  an industrial use, which must be further
described as one of the following crop types:
(iv)  a hybrid of the crop types described by
(B)  a cannabinoid use, which must be further
described as one of the following crop types:
(4)  any other information the department determines
relevant to differentiate between seed types; and
(5)  to the extent possible, information and best
practices to ensure hemp grown and harvested from the seed complies
(e)  If a variety of hemp seed approved or certified by the
department under this section produces multiple harvest batches
that yield a delta-9 tetrahydrocannabinol concentration of more
than 0.3 percent, the department shall:
(1)  for a variety of hemp seed that produces plants
that have a delta-9 tetrahydrocannabinol concentration of more than
0.3 percent but not more than 1.0 percent when harvested, suspend
the approval or certification of the seed and conduct a review to
evaluate if the seed should be removed from the list of approved or
(2)  for a variety of hemp seed that produces plants
that have a delta-9 tetrahydrocannabinol concentration of more than
1.0 percent when harvested, remove the seed from the list of
approved or certified hemp seeds.
SECTION 17.  Chapter 122, Agriculture Code, is amended by
adding Subchapter G-1 to read as follows:
SUBCHAPTER G-1.  DISTRIBUTION AND SALE
Sec. 122.3011.  HEMP RESTRICTIONS.  A person may not
distribute, deliver, sell, purchase, or otherwise introduce into
the stream of commerce in this state hemp:
(1)  that has not been tested in accordance with the
requirements of Subchapter D; and
(2)  that is not accompanied by documentation that
(A)  the company name and physical address for the
location where the hemp was produced;
(B)  the delta-9 tetrahydrocannabinol
(C)  the total tetrahydrocannabinol concentration
SECTION 18.  Section 122.354, Agriculture Code, is amended
Sec. 122.354.  DEPARTMENT RULES.  The department, in
consultation with the Department of Public Safety, shall adopt
rules regulating the transportation of hemp in this state to ensure
that illegal marihuana and illegal marihuana extract are [is] not
transported into, [or] through, or out of this state disguised as
SECTION 19.  Section 122.356, Agriculture Code, is amended
Sec. 122.356.  DOCUMENTATION AND OTHER SHIPPING
REQUIREMENTS.  (a)  A person may not transport or receive hemp
[plant material] in this state unless the hemp:
(1)  is produced in compliance with:
(A)  a state or tribal plan approved by the United
States Department of Agriculture under 7 U.S.C. Section 1639p; or
(B)  a plan established under 7 U.S.C. Section
1639q if the hemp was produced [cultivated] in an area where that
(2)  is accompanied by a label clearly identifying the
(A)  a shipping certificate or cargo manifest
issued under Section 122.055 if the hemp originated in this state;
(B)  documentation containing the name and
address of the place where the hemp was produced, the delta-9
tetrahydrocannabinol concentration of the hemp, the total
tetrahydrocannabinol concentration of the hemp, [cultivated] and a
statement that the hemp was produced in compliance with 7 U.S.C.
Section 1639p or 7 U.S.C. Section 1639q [7 U.S.C.  Chapter 38,
Subchapter VII], if the hemp originated outside this state.
(b)  A person transporting hemp [plant material] in this
(1)  may not concurrently transport any cargo that is
(2)  shall furnish the documentation required by this
section to the department or any peace officer on request.
(c)  A person may not transport or receive hemp in this state
if the hemp is not accompanied by a label that includes:
(1)  contact information of the department;
(2)  the date and time of the departure of the hemp
shipment from the place of origin for the hemp;
(3)  the quantity and form of hemp being transported;
(4)  the delta-9 tetrahydrocannabinol concentration of
(5)  the total tetrahydrocannabinol concentration of
(6)  any other information required by the department
or the Department of Public Safety.
SECTION 20.  Sections 122.358(c) and (d), Agriculture Code,
are amended to read as follows:
(c)  If a peace officer has probable cause to believe that a
person transporting hemp in this state is also transporting
marihuana, marihuana extract, a controlled substance analogue, or a
controlled substance, as defined by Section 481.002, Health and
Safety Code, or any other illegal substance under state or federal
law, the peace officer may seize and impound the hemp along with the
controlled or illegal substance.
(d)  This subchapter does not limit or restrict a peace
officer from enforcing to the fullest extent the laws of this state
regulating marihuana, marihuana extract, controlled substance
analogues, and controlled substances, as defined by Section
481.002, Health and Safety Code.
SECTION 21.  Section 122.359(a), Agriculture Code, is
(a)  A person who violates Section 122.356 is liable to this
state for a civil penalty in an amount not to exceed $5,000 [$500]
SECTION 22.  Section 122.360(b), Agriculture Code, is
(b)  An offense under this section is a Class B misdemeanor
[punishable by a fine of not more than $1,000].
SECTION 23.  Sections 122.403(a) and (c), Agriculture Code,
are amended to read as follows:
(a)  If the department determines that a license holder
negligently violated this chapter or a rule adopted under this
chapter, the department shall enforce the violation in the manner
provided by Section 122.404 and 7 U.S.C.  Section 1639p(e).
(c)  A license holder who violates this chapter by
cultivating plants with a delta-9 tetrahydrocannabinol
concentration of more than 0.3 percent on a dry weight basis solely
as a result of negligence [described by Section 122.202(b)(2)]:
(1)  must comply with an enhanced testing protocol
(2)  shall pay a fee in the amount not exceeding $1,000
[of $500] for each violation to cover the department's costs of
administering the enhanced testing protocol; and
(3)  shall be included on a list maintained by the
department of license holders with negligent violations, which is
public information for purposes of Chapter 552, Government Code.
SECTION 24.  Subchapter I, Chapter 122, Agriculture Code, is
amended by adding Section 122.405 to read as follows:
Sec. 122.405.  FORFEITURE.  A person who sells or
distributes a substance with a delta-9 tetrahydrocannabinol
concentration of more than 0.3 percent on a dry weight basis is
subject to forfeiture of contraband under Chapter 59, Code of
Criminal Procedure, and Chapter 481, Health and Safety Code.
SECTION 25.  Subtitle F, Title 5, Agriculture Code, is
amended by adding Chapter 123 to read as follows:
CHAPTER 123.  MANUFACTURE, DISTRIBUTION, AND SALE OF NONCONSUMABLE
SUBCHAPTER A.  GENERAL PROVISIONS
Sec. 123.001.  DEFINITIONS.  In this chapter:
(1)  "Consumable hemp product" has the meaning assigned
by Section 443.001, Health and Safety Code.
(2)  "Dry weight basis" has the meaning assigned by
(3)  "Hemp" has the meaning assigned by Section
(4)  "Institution of higher education" has the meaning
assigned by Section 61.003, Education Code.
(5)  "License" means a nonconsumable hemp product
manufacturer's license issued under this chapter.
(6)  "License holder" means an individual or business
entity holding a nonconsumable hemp product manufacturer's license
(7)  "Nonconsumable hemp product" has the meaning
(8)  "Smoking" has the meaning assigned by Section
443.001, Health and Safety Code.
(9)  "Tetrahydrocannabinol" has the meaning assigned
Sec. 123.002.  LEGISLATIVE INTENT.  It is the intent of the
legislature to create a robust market for the production of fiber
hemp crops and the manufacturing of nonconsumable hemp products in
Sec. 123.003.  LOCAL REGULATION PROHIBITED.  A municipality,
county, or other political subdivision may not enact, adopt, or
enforce a rule, ordinance, order, resolution, or other regulation
that prohibits the processing of hemp for use in the manufacturing
of a nonconsumable hemp product, or the manufacturing or sale of
nonconsumable hemp products as authorized by this chapter.
Sec. 123.004.  SEVERABILITY.  (a)  A provision of this
chapter or its application to any person or circumstance is invalid
if the secretary of the United States Department of Agriculture
determines that the provision or application conflicts with 7
U.S.C. Chapter 38, Subchapter VII, and prevents the approval of the
state plan submitted under Chapter 121.
(b)  The invalidity of a provision or application under
Subsection (a) does not affect the other provisions or applications
of this chapter that can be given effect without the invalid
provision or application, and to this end the provisions of this
chapter are declared to be severable.
SUBCHAPTER B.  POWERS AND DUTIES
Sec. 123.051.  DEPARTMENT RULES AND PROCEDURES.  (a)  The
department shall adopt rules and procedures necessary to implement,
administer, and enforce this chapter.
(b)  Rules adopted under Subsection (a) must comply with:
(1)  a state plan submitted to and approved by the
secretary of the United States Department of Agriculture under
(2)  7 U.S.C.  Chapter 38, Subchapter VII, and federal
regulations adopted under that subchapter.
Sec. 123.052.  DESIGNATION OF CONSUMABLE HEMP PRODUCT.  (a)
The executive commissioner of the Health and Human Services
Commission may designate a substance that contains hemp as a
consumable hemp product if the executive commissioner determines
that the substance qualifies as a consumable hemp product under
Section 443.001, Health and Safety Code.
(b)  A designation or modification of a designation made by
the executive commissioner of the Health and Human Services
Commission under this section is final and binding.
(c)  A consumable hemp product designated under this section
is governed under Chapter 443, Health and Safety Code.
(d)  A designation under this section is not subject to
Sec. 123.053.  INDUSTRIAL HEMP STANDARDS.  (a) The
department shall adopt standards for the production of hemp for
(b)  The department may work with an institution of higher
education or certified third party to adopt and administer
responsible hemp standards for the production and distribution of
hemp for industrial purposes, as well as the manufacturing of
SUBCHAPTER C.  NONCONSUMABLE HEMP PRODUCT MANUFACTURER'S LICENSE
Sec. 123.101.  LICENSE REQUIRED; LIMITATIONS.  A person may
not process hemp for use in a nonconsumable hemp product or
manufacture a nonconsumable hemp product in this state unless the
person holds a license under this subchapter.
Sec. 123.102.  LICENSE INELIGIBILITY.  (a) An individual who
is or has been convicted of a felony relating to a controlled
substance under federal law or the law of any state may not, before
the 10th anniversary of the date of the conviction:
(1)  hold a license under this subchapter; or
(2)  be a governing person or owner of a business entity
that holds a license under this subchapter.
(b)  A person licensed under Chapter 443, Health and Safety
Code, may not be issued or hold a license under this subchapter.
(c)  An individual who is not a legal citizen of the United
(1)  hold a license under this subchapter; or
(2)  be a governing person or owner of a business entity
that holds a license under this subchapter.
Sec. 123.103.  APPLICATION; ISSUANCE.  A person may apply
for a license by submitting an application in the manner prescribed
by the department.  The application must be accompanied by:
(1)  the physical address, including the county, of the
location where the applicant intends to process hemp for use in a
nonconsumable product or manufacture nonconsumable hemp products;
(2)  any other information the department requires by
Sec. 123.104.  TERM; RENEWAL.  (a)  A license is valid for
one year and may be renewed as provided by this section.
(b)  The department shall renew a license if the license
(1)  is eligible to hold the license; and
(2)  does not owe any outstanding fee to the
Sec. 123.105.  REVOCATION.  The department may suspend or
revoke a license if the license holder fails to comply with this
Sec. 123.106.  FEES.  The department by rule shall establish
a fee schedule for this chapter, including an application fee and an
annual renewal fee each in the amount not to exceed $10,000.
SUBCHAPTER D.  TESTING OF NONCONSUMABLE HEMP PRODUCTS
Sec. 123.151.  TESTING REQUIRED.  (a)  Before a
nonconsumable hemp product is sold in this state by a license
holder, one or more samples from a batch of the nonconsumable hemp
product must be tested by a laboratory located in the state that is:
(1)  registered with the Federal Drug Enforcement
(2)  accredited by an accreditation body in accordance
with International Organization for Standardization ISO/IEC 17025
or a comparable or successor standard.
(b)  The department shall adopt rules that require a
laboratory to electronically report any test result conducted under
this section to the department.
(c)  This section does not apply to a nonconsumable hemp
(1)  the mature stalks of the plant Cannabis sativa L.;
(2)  fiber produced from the mature stalks of the plant
Sec. 123.152.  PROVISIONS RELATED TO TESTING.  Any method
for detecting tetrahydrocannabinols must consider the conversion
of tetrahydrocannabinolic acid into tetrahydrocannabinol.
SUBCHAPTER E.  MANUFACTURE, TRANSPORTATION, AND SALE OF
Sec. 123.201.  TRANSPORTATION OF NONCONSUMABLE HEMP
PRODUCTS.  A person may transport a nonconsumable hemp product
manufactured in compliance with this subchapter.
Sec. 123.202.  INTERSTATE TRANSPORTATION OF PRODUCTS.
Nonconsumable hemp products may only be transported across state
lines in a manner that is consistent with state and federal law.
Sec. 123.203.  RESTRICTIONS ON SALE.  (a)  A person may not
sell a nonconsumable hemp product if the product contains any
detectable tetrahydrocannabinols.
(b)  All nonconsumable hemp products must be manufactured in
product batches to allow for accurate sampling, testing, packaging,
(c)  A person may not manufacture, distribute, deliver, make
available for sale, purchase, possess, or use a nonconsumable hemp
(1)  contains harmful ingredients;
(2)  can be used for smoking; or
(3)  contains any detectable tetrahydrocannabinols.
Sec. 123.204.  PACKAGING AND LABELING.  Each nonconsumable
hemp product must be labeled with:
(1)  a logo or insignia designed by the department
identifying the product as a nonconsumable hemp product; and
(2)  the name and address of the license holder.
Sec. 123.205.  SALE OF OUT-OF-STATE NONCONSUMABLE HEMP
PRODUCTS.  A person may sell a nonconsumable hemp product
manufactured outside of this state if:
(1)  the hemp in the nonconsumable hemp product was
cultivated or processed in compliance with a plan approved by the
United States Department of Agriculture under 7 U.S.C. Section
1639p or established under 7 U.S.C. Section 1639q;
(2)  the nonconsumable hemp product was tested and the
result reported in accordance with the requirements of Section
(3)  the sale does not violate federal law.
SECTION 26.  The following provisions of the Agriculture
(3)  Subchapter G, Chapter 122; and
(4)  Sections 122.358(a) and (b).
SECTION 27.  (a)  Not later than December 1, 2025, the
Department of Agriculture shall develop and submit for approval a
state plan to the secretary of the United States Department of
Agriculture as required by Section 121.003, Agriculture Code, as
(b)  If the state plan submitted under Subsection (a) of this
section is not approved, as soon as practicable, the Department of
Agriculture shall submit amended state plans as required by Section
121.003, Agriculture Code, as amended by this Act, until the plan is
approved by the secretary of the United States Department of
(c)  As soon as practicable after a state plan is approved
under Subsection (a) or (b) of this section, the Department of
Agriculture and the Department of State Health Services shall
SECTION 28.  (a)  As soon as practicable after the effective
date of this Act, the executive commissioner of the Health and Human
Services Commission shall adopt rules necessary to implement the
changes in law made by this Act.
(b)  As soon as practicable after the effective date of this
Act, the commissioner of the Department of Agriculture shall adopt
rules necessary to implement the changes in law made by this Act.
SECTION 29.  This Act takes effect September 1, 2025.