Texas Data Privacy and Security Act Meets Hemp Retail: 2025 Enforcement Risks for Age‑Gated Loyalty and Geolocation Ads

The Texas Data Privacy and Security Act (TDPSA) is ushering in a new era for privacy compliance in 2025, with significant implications for hemp retailers operating digital loyalty programs, push notifications, and targeted advertising. As of January 1, 2025, the law’s requirements for opt-out requests, sensitive data consent, and geolocation tracking are in full effect—and enforcement activities are intensifying. Hemp businesses must urgently review and overhaul both their consumer-facing programs and backend data handling procedures to mitigate growing regulatory risk.

Understanding the TDPSA: Scope and Key Definitions

TDPSA applies broadly to businesses that:

• Conduct business in Texas or offer products/services to Texas residents;
• Process or sell any volume of personal data;
• Are not a “small business” under the U.S. Small Business Administration definition (though even exempted small businesses must obtain consent before selling sensitive personal data).

Sensitive personal data includes:

• Precise geolocation (within 1,750 feet);
• Racial/ethnic origin;
• Religious beliefs;
• Mental or physical health diagnosis;
• Sex life or sexual orientation;
• Citizenship or immigration status;
• Genetic/biometric data; and
• Personal data collected from a known child (under 13).

Texas’s exceptionally broad definition makes many common hemp retail practices subject to heightened obligations, especially with age-gated promotions and geo-targeted loyalty apps (source: Texas State Law Library; Termly).

How TDPSA Impacts Hemp Retail: Loyalty, Age-Gates, and Geolocation

Age-Gated Loyalty Programs: More Than Just Age Verification

While age gates (e.g., 21+ screeners) are the norm in hemp and cannabinoid retail, TDPSA requires a separate and explicit consent mechanism if you collect or process sensitive data (such as geolocation or health info) for loyalty programs or targeted offers. Simply confirming age is no longer enough—the reason your business collects and uses any sensitive data must be clear, with a distinct opt-in obtained before data processing begins.

Geofencing and Location-Based Ads: Consent and Opt-Out

If your app or website triggers promotional notifications or personalized offers based on precise customer location, this is now classified as processing sensitive personal data. Businesses must:

• Prompt users with a conspicuous consent banner before collecting geolocation data;
• Honor opt-out requests and browser-based Global Privacy Control (GPC) signals;
• Ensure the data minimization principle—only collect the geolocation data strictly necessary for the specified purpose.

Failure to obtain proper consent—especially if using third-party adtech SDKs for geotargeted campaigns—will be one of the principal enforcement vectors in 2025 (source: Lightbeam).

Loyalty Program Purchase Histories: Retention and Deletion

Tracking customer purchases for rewards means retaining personal data and often sensitive health or preference data (e.g., hemp-derived cannabinoids). TDPSA grants consumers explicit rights to access, correct, delete, or port their information, and businesses must:

• Respond to access/deletion requests within 45 days (extendable by another 45 days with notice);
• Document all processes for verifying requesters’ identities;
• Maintain clear, Texas-specific privacy notices explaining the type of information retained, purposes for retention, and retention periods.

Mandatory Privacy Notices and Consent Flows

TDPSA requires a clear, up-to-date privacy notice that includes:

• Categories/purposes for which personal data are processed;
• Whether data are shared or sold and to whom;
• Consumer rights (access, correction, deletion, opt-out);
• The process for submitting privacy requests;
• Contact information for the privacy officer or responsible party.

Example Texas-Specific Privacy Notice Language:

"Under the Texas Data Privacy and Security Act, Texas residents have the right to know, access, correct, delete, and opt out of the processing of their personal data, including precise geolocation information collected through our [app/website]. To exercise your rights, please email [privacy@yourcompany.com] or use our online request form. We honor browser-based Global Privacy Control (GPC) signals and opt-out requests."

Pro Tips:

• Separate your age gate from your TDPSA consent prompt—do not bundle them!
• Use layered notices: a brief pop-up for sensitive data (especially location), linking to a full privacy policy.
• Build opt-in and opt-out preference centers right into your rewards signup and account dashboard.

Data Minimization, Retention, and Deletion: Practical Guidance

Data Minimization: Only collect what is strictly necessary for your loyalty and promo programs. For instance, you likely don’t need ongoing access to a customer’s real-time geolocation—consider alternatives such as zip code or self-selected region.

Retention: Disclose how long you keep purchase histories. A best practice is to purge identifying data after a set period (e.g., 2 years), unless a longer period is needed for legal or compliance reasons.

Deletion Requests: Design workflows to acknowledge consumer access or deletion requests within 45 days. Automate requests where possible but ensure a reliable process for verifying identities to prevent fraud.

Vendor Due Diligence: CDPs and Adtech Partners

Many hemp and cannabinoid businesses use Customer Data Platforms (CDPs) or marketing vendors for loyalty management, personalized email, push notifications, and adtech. TDPSA demands special care in vendor contracts and oversight:

• Ensure vendors acting as data processors sign contracts that specify processing terms, permitted use cases, and the obligation to assist with consumer requests;
• Audit your vendors for data security and privacy compliance—require documentation of their processes and readiness for TDPSA access/deletion request fulfillment;
• Demand proof your vendors honor GPC signals and provide rapid reporting of any data incidents.

Enforcement Trends and Penalties in 2025

The Texas Attorney General’s office established a dedicated privacy enforcement team to oversee TDPSA compliance (GoodwinLaw). Key risks for hemp retailers in 2025 include:

• Failure to obtain or document proper consent for sensitive data (geolocation, age-gated transactions);
• Not honoring opt-out/GPC requests or mishandling access/deletion windows;
• Inadequate privacy notices or missing required disclosures;
• Using non-compliant third-party vendors or processors.

Violations may result in:
Civil penalties up to $7,500 per violation, cease-and-desist demands, and referral for civil lawsuits. Private rights of action may also be available under certain conditions.

Best Practices Checklist for Hemp Retailers

• Review your loyalty program, mobile app, and adtech flows for all sensitive data collection
• Separate age-gating screens from privacy consent prompts
• Implement clear, Texas-specific privacy notices and opt-out controls
• Honor all GPC and browser opt-out signals across your digital properties
• Develop internal processes to respond to privacy rights requests within 45 days
• Vet all vendors with controller-processor contracts and regular audits
• Train marketing and support teams to recognize privacy requests and escalate them properly

Protect your business and put consumers first—plan proactively as Texas privacy enforcement ramps up. For customized compliance checklists, consent flow templates, and privacy policy updates tailored to your hemp retail operation, visit CannabisRegulations.ai today.