In Texas, thousands of convenience stores, grocery shops, and even some nail salons owned by Vietnamese Americans have quietly turned CBD and hemp-THC products into a supplemental revenue stream over the past few years. Now, that very revenue source has become a legal puzzle with no clear way out, as a new state regulation that just took effect is being partially blocked by the courts.
The regulation issued by the Texas Department of Health and Human Services, effective March 31, 2026, changes how THC content is calculated to include THCA, a compound that converts into an intoxicating substance when burned or heated. Previously, the 2019 law only counted Delta-9 THC. The new rules also mandate child-resistant packaging, batch testing, and more detailed record-keeping. What troubles small business owners most is not the packaging technicalities, but the cost: the annual licensing fee for hemp production facilities has increased from $258 to $10,000 per year—a level that the chairman of the Texas Hemp Council Business Association notes is actually higher than the $3,000 fee that distilleries pay every two years.
However, the hemp industry is not staying quiet. A business coalition has sued two state agencies, arguing that the administrative body lacks the authority to redefine language established by lawmakers in the 2019 law. A judge in Travis County blocked enforcement of part of the regulation in early May. As a result, retailers now face a situation where they must prepare to comply with the new law while uncertain whether that law will actually survive legal challenge—a gray area rather than a clear mandate.
Shop owners must prepare to comply with the new law while uncertain whether that law will actually survive legal challenge.
How This Differs from a Standard Ban
It is important to distinguish between two things happening in parallel. First, a tightened administrative regulation on hemp that took effect in March, which is currently being litigated. Second, a bill that would have completely banned hemp products for consumption, which Governor Greg Abbott vetoed in 2025, pushing lawmakers toward regulation rather than outright prohibition. Yet the pressure for a complete ban has not disappeared: at a Texas Senate hearing on July 7, 2026, Senator Charles Perry announced he will propose legislation to ban hemp products for consumption in the next legislative session, citing concerns about child safety and mental health.
Concern about children is not merely speculation. The Texas Department of Family and Protective Services reported that the number of newborns testing positive for THC at birth increased from 1,559 to 1,896 cases between fiscal years 2024 and 2025. The state poison control center also documented a sharp rise in cannabis-related calls during the 2019-2024 period. This data will likely be the main argument used by those advocating for a complete ban during the next legislative session.
Who Is Affected and to What Extent
For Vietnamese-American shop owners, the level of risk depends on what products they sell. THC-infused beverages and food products are generally not directly affected by restrictions on smokable products, as long as they meet new packaging and testing requirements. However, THCA flower products and smoking accessories face the heaviest impact. With more than 9,100 registered hemp retail outlets statewide, with just 93 facilities in Austin alone, the industry is large enough that a licensing fee increase or new ban could push many small shops out of the market, even those that view hemp as merely a supplemental revenue source rather than their core business.
Meanwhile, this is not Texas's first deep intervention into what people can buy and sell: another regulation effective in April bans the use of SNAP benefits to purchase candy and sugary drinks, showing a broader state trend toward tightening consumer regulations through executive action rather than waiting for the legislature. For Vietnamese-American grocery store owners who must update their point-of-sale systems for SNAP compliance while also monitoring the hemp lawsuit, the burden of regulatory compliance is mounting.
Key Developments to Watch
Three important milestones: the outcome of the Travis County lawsuit, whether Congress passes a federal ban on intoxicating hemp products in November, and whether Senator Perry actually brings a complete ban bill to a vote in the next legislative session. Shop owners should stay in contact with an attorney or industry association to track legal developments rather than relying on guesswork, because right now it remains unclear which regulations are still in effect and which have been suspended by the courts.