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.”