A look at the state of marijuana in the Lone Star State and the Texas Compassionate Use Act.
The Lone Star State is known for many things: football, savory barbeque, and one of the most business-friendly environments in the U.S. According to experts, soon Texas may also be known as the place for accessible canna business opportunity.
Governor Greg Abbott signed the Texas Compassionate Use Act (formerly SB 339) on June 1, 2015. The law allows qualifying patients access to “low-THC cannabis”—marijuana that contains 10 percent or more CBD and not more than 0.5 percent THC. Provisions in the law authorize licensed businesses to cultivate, process, and provide compliant cannabis to qualifying patients. The Texas Department of Safety, which oversees the program, must license at least three “dispensing organizations” by September 1, 2017. DPS also must create and maintain a secure registry of diagnosed patients and the physicians who treat them.
At first glance, Texas appears to be setting a very limited stage for a cannabis industry. “While it does lay a solid foundation for a workable medical marijuana program, [the law] is unreasonably restrictive in that it allows only patients with intractable epilepsy to access low-THC cannabis products,” Heather Fazio, political director for the Texas Marijuana Policy Project (MPP), explained. “The bill also has some flawed legal language, which makes it very risky for doctors to participate.” she said of the Texas Compassionate Use Act.
Although a thriving industry won’t spring up overnight, the Texas Compassionate Use Act also outlines several provisions that point to a Texas-sized industry on the horizon.
In a move consistent with its business-friendly reputation,the Texas Compassionate Use Act is allowing market needs, rather than governmental regulation, to sort its canna industry. For example, though DPS must license at least three dispensing organizations by 2017, there is no cap on the number of businesses that may be licensed and local governments may not opt out of canna businesses in their area. Further, Texas’s licensing requirements are far more reasonable than they are prohibitive.
According to Shawn Hauser, Esq., senior associate at Colorado’s noteworthy Vicente Sederberg law firm, the Texas law’s provision disallowing localities to opt out of accepting licensed marijuana businesses is a significant industry building block, as well as a win for patients. In addition, Texas’s canna licensing process does not require licensees to be permanent residents of the state, nor does it require significant capital investment or any sort of merit-based prioritizing—“factors that are common in many other states and create significant barriers to entry,” Hauser explained. Cost for the application itself? Only $6,000 to submit.
In Hauser’s view, Texas regulations are focused primarily on responsible directives and patient welfare, emphasizing quality control, testing, inventory tracking, and other safety mechanisms. Texas branches of national organizations, in turn, are doing their part to support the state’s concern for its population.
NORML, for example, has worked to reform marijuana law on the federal level since 1970. True to the spirit of its parent organization, Texas NORML also seeks to decriminalize consumption, paying particular attention to social factors impacting the state. This includes alliances dedicated to women and U.S. military veterans.
According to Jax Finkel, executive director for Texas NORML, the organization’s Women’s Alliance is intended to help empower and educate, with a focus on women’s and family issues. “Women are very interested in changing laws for the wellbeing of themselves and their families,” Finkel explained. “If you look at the end of [alcohol] prohibition, things really moved when women stood up and said ‘No more!’”
Texas NORML also focuses on U.S. military veterans’ needs. As of 2014, more than 1.6 million veterans lived in Texas—the second highest state-level concentration in the U.S., according to the Department of Veteran Affairs. Within the context of its Veteran’s Alliance, Texas NORML sponsors the veteran-created initiative #OperationTrapped.
“Many veterans in Texas want a safer alternative to harmful prescription medicine, which can lead to addiction to narcotics and an alarming number of overdose deaths every year,” Finkel said.
According to Finkel, thousands of Texas veterans consume cannabis to relieve symptoms associated with post-traumatic stress disorder, traumatic brain injury, chronic pain, or other service-related injuries. “We are amplifying their voices with this project,” she said.
The Texas Compassionate Use Act is still in its infancy, and patients do not yet have legal access to compliant CBD products. DPS is not expected to issue the first licenses until June 2017. Only then will the first crops be planted. But organizations like Texas NORML and MPP already are working to improve the act and expand its reach. According to Fazio, a grassroots activist groundswell in Texas drives the organizations’ efforts. “Now, more than ever, the movement for reform is united and committed to professional advocacy,” Fazio said.
“Between now and [2017], we have an opportunity to change the law,” she continued. “Our goal is to make the program more inclusive, allowing access for all patients suffering from debilitating conditions—things like intractable pain, cancer, [multiple sclerosis], and Crohn’s disease.” MPP also is working to lift the cap on THC concentration and amend the statute’s call for a “prescription,” opting instead for a “written certification.” This will protect doctors from inconsistencies between state and federal laws.
“The legislature convenes in January, and bills can be pre-filed as soon as November,” Fazio said. “We’re optimistic about the opportunity to make the Texas Compassionate Use program more inclusive.”
There’s much work to be done in Texas, but there’s also a lot of opportunity. Professional organizations are already on-task, aiming to make sure the business end of Texas weed is optimized from the get-go.
According to Kayla Brown, executive director and co-founder of the Texas Cannabis Industry Association, the future of cannabis in Texas looks bright for a number of reasons. First, Texas will never look like Colorado—and that’s a good thing. “Everyone asks, ‘When will Texas look like Colorado?’” Brown revealed. “The answer? Never. We have a much different culture, different legislative process, and different needs as a state.”
The differences already have resulted in a foundation that’s far more inclusive in Texas. For example, only one third of Colorado cities and counties allow medicinal and/or recreational canna businesses, whereas the entire state may participate in since the Texas Compassionate Use Act does not allow cities or counties to opt out,.
Further, according to Brown, expanded THC levels are right around the corner. “The next legislative session begins in January 2017,” she explained. “Any [legislative] success that results in expanded levels of THC will expand the industry opportunity, as well. Preparing now will make that transition easier.”
Finally: It’s business, y’all. “I have found that, while Texas doesn’t have a cannabis culture, we do have a business culture,” Brown said. As such, regardless the specific industry, Texas knows opportunity. “We have the second highest population in the country, will be the second highest tax-revenue-generating state, and have a completely blank slate. We are the sleeping giant of the industry.”
The Texas canna industry is in its infancy. This means there’s a lot to be determined, decided, and established in the immediate future. According to Brown, being an early business license applicant will allow entrepreneurs and advocates the chance help shape the industry in Texas. “This is a big opportunity,” she said, “but a huge responsibility, as well.”
Though there won’t be a gold rush tomorrow, Texas has a far larger population than other canna-legal states. When there is greater patient access, revenues will increase exponentially.
“Texas is open to innovation, new companies, and minimal competition,” Brown said. The state’s environment offers individuals and businesses the opportunity to shape its future.
