Texas
Texas hemp regulation proceeds despite federal restriction
The Texas Alcoholic Beverage Commission moved forward on Tuesday with its efforts to regulate the sale of consumable hemp products as questions swirled around the future of the industry due to federal restrictions on the products approved by Congress last week.
A provision of the funding bill for the U.S. Department of Agriculture that ended the longest government shutdown on record also undid a provision of the 2018 farm bill that first allowed Texas’ $8 billion hemp industry to thrive.
The funding bill bans the sale of hemp-derived products with more than 0.4 milligrams of tetrahydrocannabinol, or THC, the psychoactive element also found in marijuana. That provision, which criminalizes almost all consumable hemp products sold across the country, will put Texas’ law in direct conflict with the federal law when it takes effect next November.
In spite of the impending federal restrictions, TABC intends to proceed with the adoption of permanent regulations on the hemp industry in Texas that will replace emergency rules adopted by the commission in September that barred the sale of THC products to anyone younger than 21. Advocates and trade representatives who testified at the TABC meeting Tuesday said they do not expect the federal restrictions to be the final word on the debate.
“What we understand is this is still a conversation that is happening at (the federal) level,” Shaun Salvaje, a veteran who uses consumable hemp products and an advocate for cannabis reform, told the commission. “You have a unique opportunity to regulate an industry that is built by Texans for Texans.”
The commissioners are following the executive order Gov. Greg Abbott issued in September that directed both TABC and the Department of State Health Services to impose stricter regulations on the hemp businesses they license, like an age restriction on sales to minors and mandatory ID verification at the point of sale.
That executive order came after Abbott in June vetoed a legislative ban on the products and the Legislature was unable to come to a consensus on regulations during two special sessions this summer.
DSHS in October approved its own emergency rules that require sellers of consumable hemp to verify with a valid ID that a customer is at least 21 years old, violations of which may lead to the revocation of a license or registration.
TABC’s latest proposed rules
TABC’s proposed permanent rules were introduced at the Tuesday meeting, and commissioners also voted to begin a public input period that will conclude on Jan. 4. The commission will vote on the formal adoption of the regulations in January.
TABC’s proposed rules are largely aligned with the emergency rules it approved in September, but pulls back on some of the stricter measures. The new proposal removes a “one strike” provision that allows TABC to revoke the license of any business found to have sold the products to a minor or failed to check ID. The permanent rules allow for the agency to temporarily suspend licenses for less egregious violations.
Two trade group representatives of convenience stores in the state testified that they support a less punitive approach to potential violations, arguing the automatic cancellation under the emergency rules risks putting stores out of business over a simple mistake.
TABC’s permanent rules would apply to businesses that have liquor licenses and sell hemp products, such as restaurants and bars that sell THC drinks and convenience stores that sell both alcohol and THC products.
Further public comment will take place over the coming weeks both submitted and at a public hearing planned for Dec. 11, TABC staff said.
Another fight for the hemp industry
Commissioner Hasan K. Mack said the agency intends to act “regardless of the actions at the federal level.”
“We’re going to do what the governor tells us we need to do … that’s all we can do right now until we get further guidance from the governor’s office,” Mack said. “There is no benefit in allowing underage Texans to consume hemp products.”
Abbott has not provided additional guidance to the agencies since the federal restrictions were approved, and his office did not respond to a request for comment Tuesday.
The federal restrictions signed by President Donald Trump last week invoke a sense of déjà vu in Texas, where advocates and trade groups sprung into action following the legislative approval of a ban on the sale of the products this spring. After weeks of lobbying the governor’s office, Abbott split from more conservative members of his party and vetoed the ban, citing the industry’s economic impact.
The industry is gearing up for a similar fight, this time in Washington.
“Hemp is too vital to the American economy and to the livelihoods of millions to be dismantled by rushed, politically driven legislation,” the Texas Hemp Business Council said in a statement last week. “As we proved in Texas, we will continue to pursue every legal and legislative option to overturn these harmful provisions and restore a fair, science-based system that continues to protect minors, ensure product safety and preserve the economic opportunities Congress created in 2018.”
It is also unclear how aggressively the federal restrictions will be enforced once they go into effect. Since 1970, marijuana, hemp’s cousin, has been classified as a Schedule I drug under the Controlled Substances Act, the most restrictive classification, but that prohibition is generally not enforced in states where it is legal. There are 40 states, including Texas, that have medical marijuana programs. In 24 states, marijuana is legal for recreational use.
Like in Texas, all branches of the federal government are controlled by the Republican Party, which has historically been more hostile to recreational cannabis use. However, political winds have changed in recent years.
U.S. Reps. Dan Crenshaw, R-Houston, and Troy Nehls, R-Richmond, both voted in favor of the funding bill that included the restrictions, citing the need to end the government shutdown as quickly as possible. They both also said they oppose the federal restrictions on the hemp industry and hope Congress will address the issue again.
Texas Sen. Ted Cruz was one of two Republican senators to vote in favor of a failed amendment that would have removed the restrictions from the funding bill.
Even Trump, who the White House said was supportive of the restrictions in the funding bill, in September endorsed Medicare coverage of CBD — a cannabidiol substance derived from the cannabis plant that would also likely be federally banned by the new restrictions.
As cannabis and hemp-derived products have become more common throughout the country, Texas Cannabis Policy director Heather Fazio said much of the taboo around their use has fallen away, allowing for the issue to become more bipartisan. The debate at the federal level comes at a moment where the industry is maturing and ready to wade into the world of political lobbying, Fazio said.
“We’ve come to a place, at least in Texas, where THC is a legal commodity that responsible adults are enjoying, and it came about in a way that was much different than many of us would have expected,” Fazio said. “Now, to have this big wall that we hit at the federal level, thank goodness for the one year lead time we have because I think we’re going to have some significant lobbying efforts step up. For the industry, we need to treat this like a political movement.”
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The NHL took the first step toward expansion in Texas earlier this week, agreeing to terms with billionaire Dan Friedkin and his family to explore the feasibility of putting a franchise in Houston or Austin.
Far enough from the Dallas Stars, who relocated from Minnesota in 1993, a new team would not interfere with their territorial rights. And the league has shown no fear of adding one team at a time, so No. 33 does not have to come with No. 34.
“Symmetry I don’t think should necessarily govern expansion,” Commissioner Gary Bettman said Tuesday. “You expand if you think it makes sense and enhances what the league has.”
What is behind the NHL’s interest in Texas
Money is the obvious answer. Bettman said the total investment of the project would be some $3.5 billion, which would include expansion fees paid to established owners along with the cost of building a new arena.
The Houston Rockets’ arena downtown is publicly owned but controlled by team owner Tilman Fertitta’s Clutch City Sports and Entertainment group. The home of the American Hockey League’s Texas Stars, in the Austin suburb of Cedar Park, has a capacity of 8,000 that is a little over half the size of the NHL’s smallest current rink (Winnipeg).
“I would be surprised if the NHL would be OK with an expansion team that does not have a new arena,” said Brian Mills, an associate professor at the University of Texas who teaches courses on sports economics and strategy. “The revenue potential with the luxury boxes and the way that they set those up and the money that they like to extract from the local cities is way too large to pass up.”
They are also huge markets. Houston at nearly 2.4 million is the fourth-most-populated U.S. city; Austin at just over 1 million is in the top 12.
“Obviously it makes sense if you’re a sports league to have a franchise in the nation’s fifth-largest metro area and one that is growing rapidly,” said Holy Cross professor Victor Matheson, an expert in sports economics. “Houston obviously makes sense in general as a destination for any league.”
Austin is smaller but has doubled its population since the mid-1990s and has seen an infusion of people over the past five years. Only eight of the NHL’s existing markets are bigger.
“It’s becoming more and more of a tech city, so I wouldn’t be surprised if there’s more hockey fans here than there used to be,” Mills said. “I would imagine there’s some market for the NHL here in Austin, particularly more than when it was a sleepy, small town capital of Texas 30 years ago.”
History of hockey in Houston and Austin
When hockey was picking up in popularity in the 1960s and ‘70s and the NHL went from six teams to 18, the rival World Hockey Association was founded and Houston got a franchise when the one in Dayton, Ohio, failed to get off the ground.
The Aeros’ inaugural season was in 1972-78, and they were best known for “Mr. Hockey” Gordie Howe playing for them along with sons Mark and Marty. They won four Avco World Trophies as WHA champions before folding.
An AHL team using the same name existed in Houston from 1994-2013. The Texas Stars have played in Austin since ’09.
“There’s some interest of hockey,” University of Houston economics professor Steven G. Craig said. “Houston is full of immigrants from around the country and around the world. And Austin is sort of similar in the sense of a pretty heterogeneous population.”
Pros and cons of a Houston or Austin NHL franchise
Growing the sport in another so-called non-traditional spot is a big benefit. Smashing successes in places like Las Vegas and Tampa, Florida, show what hockey can do across the Sun Belt when strong ownership is involved.
“Southern cities have been doing pretty well now these days in the NHL: the Lightning and the Panthers,” Mills said of the two teams in Florida. “You’ve got some pretty good hockey teams after some pretty miserable failures with some earlier expansion to the South.”
Abandoning the second try in Atlanta (the Thrashers from 2000-11) was more a failure of ownership than the market. The same could be said in Arizona, where a revolving door of owners led to arena miscues and eventually the Coyotes being sold and moved to Salt Lake City in 2024 to become the Utah Mammoth.
A 33rd team also means 20-23 more NHL players and hopefuls in the minors. The changing landscape of hockey development at the junior and college levels has the potential to churn more talent through the pipeline in North America than ever before, along with players coming from Europe.
“You do have a pretty big pool of players,” Matheson said. “I’m not particularly worried about diluting the talent there because I think there’s a lot of skill.”
What’s next and where the 34th team may be
After this six-month exploratory phase is complete, recent history suggests a season-ticket drive would be one of the subsequent steps. Ticket drives validated interest that led to the Vegas Golden Knights and Seattle Kraken.
The Board of Governors would need to approve moving forward in the process. No vote has yet been held, though the executive committee supported exploring Houston and Austin.
And while the NHL is comfortable with unbalanced Eastern and Western conferences, getting to 34 teams seems inevitable if it goes to 33. Bettman said the board on Tuesday was updated on situations in Atlanta and Arizona, and it would be no surprise if one of those places got another crack at it.
ere’s everything you need to know about one of the most recognizable trophies in North American sports — The Stanley Cup.
This coverage is made possible through Votebeat, a nonpartisan news organization covering local election administration and voting access. Sign up for Votebeat Texas’ free newsletters here.
Texas lawmakers on Tuesday asked the Texas Secretary of State’s Office for assurances that issues with the state’s voter registration and election management system would be fixed before the November midterm election.
“Those fixes have to be done, because if we go into a November election and we don’t, we can’t claim that we have integrity in the voter roll,” said state Sen. Paul Bettencourt, a Republican from Harris County, during a Senate State Affairs Committee hearing that addressed voter registration and voter list maintenance issues.
Bettencourt said he’s heard complaints about the system, known as TEAM, from election officials in Travis, Austin, and Jackson counties, among others.
Christina Adkins, the elections division director at the secretary of state’s office, said the agency is “dedicating every possible resource that we have within our office to resolving these issues.”
“There is nothing more important in our office than this project,” Adkins said.
TEAM was redesigned and redeveloped by the state and relaunched last summer. Election officials say they have struggled with it since then, and though some functionality issues have been resolved, others continue to come up.
For example, election officials have reported that processes such as voter registration status lookups and precinct assignments frequently don’t work properly. In addition, the system often malfunctions when attempting to produce reports of registered voters and voters who have requested a mail ballot, forcing some election officials to produce their own spreadsheets to keep track.
The problems, election officials say, have added financial and staffing strains on counties already strapped for resources.
The system was developed by Civix, a Louisiana-based vendor. The majority of the state’s 254 counties rely on TEAM to plan elections and maintain their voter rolls. Even counties that instead use software from a state-approved private vendor to manage their voter rolls are required by state law to sync their data with TEAM daily, and are required to use TEAM to verify a voter’s identity and their eligibility to cast a ballot.
Groups representing election officials across Texas have asked the agency to halt the TEAM update rollout and address issues that they said “directly impact key parts of the election and jury process.” The groups first outlined their complaints in a letter to Texas Secretary of State Jane Nelson in October, and sent another one in February.
Earlier this month, Nelson announced she’d be stepping down as of July 17. Gov. Greg Abbott has yet to appoint her successor.
Secretary of state, vendor working together on fixes
According to public records, the state’s contract with Civix is for $17 million. The secretary of state’s office told Votebeat last year that the money for it came from a mix of state dollars and federal funds allocated under the 2002 Help America Vote Act, earmarked for improving election administration.
Bettencourt raised questions about Civix’s work during the hearing. “When I get half a dozen counties with their hair on fire, and some counties are small, and some of them are big, that means that the vendor is behind on actually delivering fixes to the system,” Bettencourt said.
He directly asked Adkins whether Civix was up for the task. “Yes, sir,” she responded, adding her office is working with the vendor on fixes. Civix did not immediately respond to a request for comment.
Civix, Adkins said, also manages voter registration systems for other states, including Louisiana and Iowa, but Texas is the vendor’s biggest election management and voter registration software customer.
The Texas Secretary of State’s Office has said it anticipated technical issues with this “once-in-a-decade upgrade,” though it pointed to some unexpected challenges that have exacerbated the issues.
The agency specified that it didn’t anticipate the updated system having to handle significant amounts of data from large counties that abruptly stopped using a vendor that had financial problems. It also noted that redrawn boundaries following last year’s unexpected midcycle redistricting created additional complications that prevented counties from mailing out voter registration certificates on time.
Disclosure: Texas Secretary of State has been a financial supporter of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune’s journalism. Find a complete list of them here.
Natalia Contreras is a reporter for Votebeat in partnership with the Texas Tribune. She is based in Corpus Christi. Contact Natalia at ncontreras@votebeat.org.
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