The Texas Alcoholic Beverage Commission has approved an emergency rule to ban liquor license holders from selling THC products to anyone under the age of 21, the agency’s first step toward fulfilling an executive order by Gov. Greg Abbott calling for stricter regulation of the products. The emergency rule, which requires retailers that sell alcohol to verify IDs, took effect Tuesday after being posted to the Texas Register. The agency does not intend to begin enforcement until Oct. 1, though, to give it enough time to relay the age limit to retailers. TABC license holders found to be violating the rule after Oct. 1 will face license revocation.
The commission approved the rule just hours after releasing its text to the public and less than two weeks after Abbott ordered TABC and the Texas Department of State Health Services to ban sales of THC “to minors” and to require verification of ID of all customers attempting to buy the products. The Tuesday morning meeting was the first public step toward fulfilling the governor’s directive by either agency.
There are about 60,000 TABC license holders, such as restaurants and liquor stores, that can’t sell THC to people under 21 under the new rule. However, the rule does not encompass the entire landscape of retailers that sell the products. It doesn’t apply to smoke shops, gas stations and online retailers that do not sell liquor and presumably do not have a liquor license.
TABC communications director Chris Porter said the Department of State Health Services will be tasked with drafting its own rule for the remaining retailers and enforcement may eventually be moved over to TABC. There are over 8,000 licensed hemp retailers under DSHS, which generate an estimated $5.5 billion in sales annually.
It could be months until TABC formally approves the 21 age limit and other regulations. TABC rules approved on an emergency basis are only in effect for up to 180 days, with the option to extend it a further 60 days. The formal rulemaking process includes further public meetings and testimony and is expected to begin at the commission’s next meeting Nov. 18, and the agency said it hopes to adopt the formal rules in January. The formal rules are expected to be “substantively similar” to the emergency rules, agency staff told commissioners. Conversations between TABC and the state health department to further determine regulatory duties for each agency are ongoing, Porter said.
TABC, which primarily regulates the sale of alcohol in the state, pointed to potential harms to minors as justification for the emergency rule.
“TABC has a statutory responsibility to ensure its license holders do not impede the general welfare, health, and safety of Texas communities,” TABC Executive Director Thomas Graham wrote in a statement Tuesday. “The commission’s actions today are a reasonable measure within its authority to help protect children across this state.”
The executive order came after the state Legislature spent the better part of the year debating a total ban or stricter regulations for the industry. A total ban approved by both the House of Representatives and the Senate was vetoed in June by Abbott. The governor then put THC regulation on the agenda for two consecutive special sessions over the summer, but lawmakers were unable to find a compromise before the end of the second session early this month.
Rather than call a third special session, Abbott issued his executive order, bypassing the Legislature. The decision has put Abbott at odds with Lt. Gov. Dan Patrick, who said the Senate will not accept anything short of a total ban.
After months of uncertainty over the possibility of a total ban, THC industry representatives largely celebrated Abbott’s order at the time, saying it would allow the industry to further establish itself as legitimate. Owners and managers of smoke shops said an age limit of 21 to purchase THC products is already being enforced by most retailers so the regulations are not expected to be disruptive.
Mark Bordas, executive director of the Texas Hemp Business Council called the rule a great start and said he expects TABC and the state health department to be able to work together to create a smooth regulatory process throughout the formal rulemaking period.
Betsy Jones, director of policy and strategy for Texans for Safe and Drug-Free Youth, noted her advocacy group had little time to review the rule proposal before the meeting and urged the agency to take careful consideration when reviewing how best to regulate hemp products in the state going forward. “We know there’s still problems with alcohol, so we don’t want to see the same problems starting to happen because we opened up access to something without thinking about these issues.
Several THC opponents testified against the rules as they were being drafted. Aubree Adams, director of advocacy for Citizens for a Safe and Healthy Texas, called on the agency to increase the age restriction to prohibit anyone under the age of 25 from buying THC products, arguing human brains need to be completely developed to reduce risk to people using cannabis products. She also noted that a large percentage of hemp products are purchased online, where TABC’s rule does not apply.
Christine Scruggs, an outspoken opponent to any recreational use of cannabis products, said her son struggled with THC dependency and suffered mental health effects from it before undergoing treatment. “I no longer believe that any safe age is OK for hemp or cannabis products. Any person could be affected,” Scruggs testified.
Abbott’s order called only for a ban of sales to minors, leaving the specific age that is set up to the agencies. However, the governor repeatedly called on lawmakers to prohibit THC products to those under 21 during the legislative sessions.
DSHS was tasked with reviewing current rules and possibly adding stricter labeling and testing requirements, improving recordkeeping to facilitate oversight and increasing licensing fees to support enforcement. The order also calls for DSHS and TABC to work with the Department of Public Safety to increase enforcement on existing rules.
Along with its rulemaking process, TABC, DSHS, the Texas A&M AgriLife Extension Service and other relevant agencies were tasked by Abbott with further studying how to create a comprehensive regulatory framework for the hemp industry. Abbott pointed to House Bill 309 from the second special session as the model for such a framework, which would need to be approved by the Legislature, Porter said.
Conversations are just beginning between various agencies to determine how that process will play out, Porter said. Authored by Rep. Briscoe Cain, R-Deer Park, the 149-page bill would have created a Texas Hemp Council to study and develop rules for THC products and establish hemp testing and licensing requirements. That would have included restrictions like banning the sale of hemp products within 1,000 feet of a church or school and on Sundays, similar to restrictions on liquor. It also outlawed manufacturers from selling smokeable flower hemp, something Abbott asked the Legislature to do in his call for the second special session that ended last week. Texas banned the sale of THC vape pens this month.
