UPDATE — August 3, 2026: On July 31, 2026, DSHS's reinstated 2021 controlled-substance schedule took effect. Delta-8, delta-10, THCP, and THCA flower are now Schedule I in Texas; only hemp delta-9 at or below 0.3% dry weight remains legal at hemp retail. Statements below that predate July 31 may no longer reflect current law. Full report: Texas Delta-8 and THCA Ban: 10 Things to Know.

If you operate in Texas’s fast-moving hemp-derived product market, 2026 started with a regulatory gut-check. The Texas Department of State Health Services (DSHS), through the Texas Health and Human Services Commission (HHSC) executive commissioner, published a sweeping set of proposed amendments to 25 Texas Administrative Code (TAC) Chapter 300 governing the manufacture, distribution, and retail sale of consumable hemp products.

The proposal aims to tighten consumer protection (recalls, labeling, packaging, age gating) while also changing the core chemistry rule that determines legality: how THC compliance is calculated. The draft also contemplates order-of-magnitude fee increases that could reshape who can afford to participate in the market.

This article summarizes what’s in the proposal, the comment/approval timeline, practical business impacts, and rapid mitigation strategies—especially around total THC testing and a likely smokable product crackdown. It also flags where businesses must align SOPs across agencies, contrasting DSHS’s proposal with TABC’s already-final retail rules for alcoholic beverage license holders.

Informational only, not legal advice.

What DSHS Proposed (and Why It Matters)

DSHS regulates “consumable hemp products” under Texas Health & Safety Code Chapter 443 and the implementing rules in 25 TAC Chapter 300. The proposed rule package published in the Texas Register (Dec. 26, 2025 issue) is the most significant rewrite since the market’s expansion and subsequent public safety scrutiny.

Two changes drive most of the commercial impact:

• Total‑THC compliance testing (THCa counted), which can make many high‑THCa products noncompliant even if delta‑9 THC is low at the time of testing.
• “Smokable” restrictions that, in practice, would eliminate large parts of the flower and inhalable segment.

The rest of the package (recall authority, packaging upgrades, warning statements, batch/ID systems, expanded definitions) creates compliance work—but it’s the chemistry definition and economics (fees) that may force immediate SKU decisions.

Primary source: the proposed text in the Texas Register: https://www.sos.state.tx.us/texreg/archive/December262025/Proposed%20Rules/25.HEALTH%20SERVICES.html

Key Change #1: Total THC Testing (THCa Included)

What’s being proposed

DSHS proposes adding definitions such as “tetrahydrocannabinol acid (THCA)”, “decarboxylation”, and “total THC” to the rule’s definition section (proposed amendments to §300.101).

The operational effect: compliance would be evaluated using a total‑THC approach that counts THCa potential (i.e., what converts to delta‑9 THC when heated) rather than focusing only on measured delta‑9 THC as-sold.

Why this is disruptive

A substantial share of Texas’s inhalable market is built around products that test below the delta‑9 threshold but contain significant THCa. Under a total‑THC standard, many of those products can cross the allowable limit—even if they were previously supported by lab COAs using delta‑9-only reporting.

What businesses should do now

• Re-audit COAs: Identify which SKUs are compliant only under delta‑9-only interpretations and would fail under total THC.
• Update lab instructions: Ensure your testing panels and reporting formats clearly specify THCa and total THC results (and measurement of uncertainty, where applicable).
• Contract language: Add representations/warranties from suppliers on total THC compliance (not just delta‑9 THC) and define the test methods and sampling plans.

Key Change #2: A De Facto Smokable Product Ban

What’s being proposed

The proposed rules expand and refine definitions including “smoking” and create new product categories such as “hemp-derived cannabinoid product”. Reporting from multiple outlets indicates the combined effect of the proposal (total‑THC plus “smoking” definitions) would effectively outlaw most smokable flower and similar inhalable formats sold in Texas.

Public reporting notes DSHS’s proposal could remove smokable products quickly once adopted, with some coverage suggesting implementation could occur as early as late January depending on final adoption timing.

Practical compliance consequences

If you sell inhalable products (flower, pre-rolls, certain concentrates or vapes), prepare for:

• Immediate SKU rationalization to remove high‑THCa items.
• Retail returns and reverse logistics if distributors require pullbacks.
• Marketing/merchandising changes to avoid product claims or in-store displays that imply “smoking” use when definitions tighten.

Rapid SKU migration options

If your revenue relies heavily on inhalables, risk management usually means migrating customers to product classes less exposed to THCa-driven total-THC calculations.

Common migration approaches (operational, not product advice):

• Shift emphasis to ingestible categories where formulations can be tuned more precisely per serving and batch (e.g., gummies, beverages) and where packaging can better support warning/age gating.
• Create “Texas-compliant” versions of top sellers with conservative total‑THC targets and additional batch testing.
• Plan a staged sunset of inhalable SKUs: stop reordering inputs, run down safe inventory, and pre-authorize returns/credits with upstream partners.

Key Change #3: Proposed Fee Increases (Reported up to ~10,000%+)

What’s being proposed

News coverage of the DSHS proposal highlights very large fee increases—often framed as 10,000% to 13,000% depending on the license/registration category.

Reported examples include:

• Manufacturer license increasing from $250 to $25,000 annually per facility.
• Retail registration increasing from roughly $150 per location to as much as $20,000 per location annually.

These figures have been widely reported by Texas media outlets summarizing the proposed rules and agency documents.

Sources (media summaries):

• Texas Tribune coverage of proposed fee hikes: https://www.texastribune.org/2026/01/09/texas-hemp-thc-cannabis-licensing-fee-marijuana-increase/
• Austin American-Statesman reporting (syndicated excerpts): https://www.statesman.com/news/article/texas-hemp-rules-weed-ban-smokable-cannabis-21290208.php
• Community Impact summary: https://communityimpact.com/austin/south-central-austin/texas-legislature/2026/01/13/texas-proposes-10000-fee-increase-for-hemp-derived-thc-retailers/

Budgeting for fee hikes: how to model it

For multi-location retailers, fee hikes function like a location tax and can change expansion math overnight.

Consider building three budgets:

• Base case: current fees (for continuity).
• Proposed case: use the published proposal’s fee schedule once confirmed.
• Stress case: assume higher renewal fees, added inspection costs, additional testing frequency, and increased packaging costs.

Key decision levers:

• Close or consolidate low-performing locations before renewal cycles.
• Renegotiate landlord terms in marginal stores.
• Shift to e-commerce where lawful and operationally feasible, while ensuring age verification and shipping controls meet Texas requirements.

Key Change #4: Packaging, Labeling, and Recall Muscle

Packaging and labeling tightening

DSHS’s proposal—along with related agency communications—signals a shift toward more explicit consumer protection controls:

• Child-resistant packaging expectations
• Stronger warning labels
• A more formalized batch identification structure (the proposal adds definitions like batch date and batch ID number and removes “lot number” as a defined term)

For baseline labeling requirements and how DSHS approaches label elements, see DSHS’s labeling guidance page: https://www.dshs.texas.gov/consumable-hemp-program-labeling

Recall readiness becomes non-optional

Multiple reports note the proposal includes mandatory recall concepts and more explicit enforcement mechanisms around unsafe/noncompliant products.

Operationally, recall readiness means you should be able to answer, within hours:

• Which stores received batch X?
• Which dates was it sold?
• How many units remain in inventory?
• Which customers can be notified (where permitted)?

If your inventory system can’t isolate by batch ID, prioritize that upgrade immediately.

Key Change #5: Age 21 and ID Checks (Now a Baseline Expectation)

Texas moved toward a 21+ framework via emergency actions in late 2025. DSHS’s Consumable Hemp Program page notes emergency rules adopted on Oct. 2, 2025 to prohibit sales to customers under 21 and require valid government-issued ID verification prior to purchase.

Source: https://www.dshs.texas.gov/consumable-hemp-program

Even if the 2026 proposal evolves, businesses should treat 21+ with ID verification as a settled compliance baseline.

Timeline: Comment Period, Hearings, and Adoption Signals

When the proposal appeared

The proposed rules were published in the Texas Register on Dec. 26, 2025.

Source (proposal publication): https://www.sos.state.tx.us/texreg/archive/December262025/Proposed%20Rules/25.HEALTH%20SERVICES.html

Public comment window

Industry groups tracking the docket reported that written public comment remained open through Jan. 26, 2026.

Source (industry call-to-action citing the deadline): https://texashempbusinesscouncil.com/public-comment-for-dshs-hemp-rules-is-still-open-your-voice-matters-take-action-now/

Potential effective date considerations

Media coverage suggested the rules could take effect quickly after finalization, with some reporting referencing late-January timing as a possibility depending on the state’s rulemaking steps and filing.

Business takeaway: don’t plan around “later.” Plan around fast adoption and phased enforcement as distinct possibilities.

Business Impact: Who Gets Hit Hardest

Retailers (especially multi-location)

• Fee exposure scales per location.
• Higher risk of noncompliant inventory if distributors dump responsibility downstream.
• Need consistent age verification and COA validation procedures across all cashiers and channels.

Manufacturers and brand owners

• Reformulation and re-testing costs rise.
• Packaging redesign and warning language updates create immediate write-offs of existing packaging inventory.
• Greater recall obligations increase insurance and quality costs.

Distributors/wholesalers

• COA review becomes a gatekeeping function.
• Stronger inbound QA: quarantine, retain samples, validate batch IDs, confirm compliant “total THC” math.

Compliance Playbook: 30–60 Day Action Plan

1) Build a “Total THC Exposure List”

For each SKU, capture:

• Current COA values for delta‑9 THC and THCa
• Calculated total THC (per your lab method)
• Category (inhalable vs ingestible vs topical)
• Top accounts / store velocity

Then classify:

• Green: comfortably compliant under total-THC.
• Yellow: could fail depending on lab variance or decarb assumptions.
• Red: likely noncompliant if total‑THC standard is adopted.

2) Write a single COA intake SOP that works for both DSHS and TABC contexts

Even if DSHS is the primary regulator for consumable hemp products, many retailers fall under other agencies too.

Your SOP should specify:

• Which cannabinoids must appear on COA (including THCa)
• Batch ID matching rules (COA ↔ label ↔ inventory)
• COA authenticity checks (lab info, QR code, direct lab portal verification)
• Hold/release logic and who can override it

3) Fix packaging and traceability before you need it

• Move from “lot number” culture to batch ID discipline
• Ensure your POS/inventory can receive and sell by batch
• Standardize label templates with placeholders for batch/date and warning statements

4) Prepare for returns, quarantines, and pullbacks

Draft templates now:

• Retail pull notice
• Distributor return authorization form
• Quarantine signage and storage SOP
• Customer-facing script for age checks and discontinued items

5) Budget for new fees and compliance overhead

Even before fee schedules are finalized:

• Create a “regulatory reserve” line item
• Model per-location fee impact on EBITDA
• Consider consolidation: fewer locations, higher compliance maturity

Avoiding Conflicting SOPs: DSHS vs TABC Retail Rules

Texas’s consumable hemp market now operates under a multi-agency environment. A key development: TABC finalized its rules affecting alcoholic beverage license holders that also sell consumable hemp products.

According to reporting, TABC’s finalized rules include:

• No sales to people under 21
• ID checks for sales
• Broad applicability to tens of thousands of TABC license holders (convenience stores, restaurants, liquor stores)

Source (TABC finalization reporting): https://www.texastribune.org/2026/01/20/texas-tabc-hemp-rules-finalized/

Practical takeaway

If you’re a retailer that holds a TABC permit/license and sells consumable hemp products, you need a unified compliance system:

• Train once, audit once, document once.
• Keep a single age-gate policy that meets or exceeds the strictest requirement.
• Maintain one COA intake workflow and one incident/complaint workflow.

Otherwise, conflicting SOPs create the most common failure mode in regulated retail: staff follow the “wrong binder” on the wrong shift.

What to Watch Next

Over the next several weeks, Texas businesses should monitor:

• Whether DSHS/HHSC modifies total THC definitions, decarb calculations, or measurement-of-uncertainty language before adoption.
• The final fee schedule and whether it phases in.
• How DSHS and TABC coordinate enforcement under any memorandum of understanding referenced in public reporting.

Start with the DSHS program hub for updates and official notices: https://www.dshs.texas.gov/consumable-hemp-program

And review the proposed rule text directly (don’t rely only on summaries): https://www.sos.state.tx.us/texreg/archive/December262025/Proposed%20Rules/25.HEALTH%20SERVICES.html

Bottom Line: Business Moves That Reduce Risk Fast

• Assume total‑THC math will be the new standard and re-qualify your entire catalog accordingly.
• Prepare for inhalable disruption: reduce exposure, plan discontinuations, and migrate customers toward compliant categories.
• Harden recall readiness with batch ID traceability across receiving, storage, and point-of-sale.
• Budget now for major fee increases and compliance overhead.
• Unify SOPs to satisfy both DSHS expectations and TABC’s finalized retail requirements—especially around 21+ sales and ID checks.

Stay Ahead with CannabisRegulations.ai

Rule proposals move quickly, and Texas is now a state where cannabis compliance, licensing economics, and agency overlap can change your operating model in a single quarter. If you want help translating proposed and final rules into store-ready SOPs, COA checklists, recall workflows, and license/renewal calendars, use https://cannabisregulations.ai/ to monitor updates and build a compliance program that scales.