The House committee on Agriculture & Livestock met on April 8 to take up a number of bills. This report covers discussions on HB 3948 (King, Tracy O.). Part one of the hearing can be found here and part two can be found here.

                                                                                                                                          

This report is intended to give you an overview and highlight of the discussions on the various topics the committee took up. It is not a verbatim transcript of the hearing but is based upon what was audible or understandable to the observer and the desire to get details out as quickly as possible with few errors or omissions.

 

Vote Outs

HB 3442 (Anderson) (7-0)

  • New committee substitute
  • Allows complainants to receive a copy of a response from a license holder and a chance to rebut that response

HB 3688 (Anderson) (8-0)

HB 3132 (Smithee) (8-0)

HB 2840 (Longoria) (8-0)

HB 2841 (Longoria) (9-0)

HB 1371 (Guerra) (9-0)

 

 

HB 3948 (King, Tracy O.) (CS) – Relating to the production and regulation of hemp and consumable hemp products; providing administrative penalties; imposing and authorizing fees; creating a criminal offense

  • 2019 HB 1325 created TX Hemp program; allowed Texas farmers to participate in the hemp market legally
  • HB 3948 intended to update TX Hemp program; extending amount of time license holder has to harvest to match FDA rules (now 30 days), specify requirements for higher education hemp research programs, expanding seed certification, create consumable hemp account
  • Added penalties for those growing hemp without proper license
  • CS; strikes section 10, 11, 18, 19 and part of section 12 which would have been harmful to hemp industry
    • Removed additional penalties
    • Removed language setting maximum THC content that is more restrictive than federal
    • Removed out-of-state requirements
    • Removed processing standards
  • Rosenthal – Does this mean I cannot grow marijuana?
    • Not legally

 

Benjamin Meggs, Bayou City Hemp Company, Texas Hemp Coalition – for

  • Past year been learning curve
  • Unique position; sees market from farmer side and retail side
  • Without retail sales not much demand for farmers; numbers are down
  • Industry still projects large growth; without a free market in TX this will not be possible
  • Bill allows TX farmers to fall in line with federal guidelines
  • Current regulations say hemp crops testing over 0.3% THC must be destroyed; this should change
  • Bill allows for real time testing and processing; helps avoid destroying crop
  • Cole – what problem is it solving?
    • It keeps market open so we can change with federal guidelines without being in legislative session
  • Burns – growing season and federal season do not match up, is that correct? And this would allow us to adapt?
    • Yes

 

Jesse Kerns, New Bloom Labs, TX Hemp Coalition – for

  • 3rd party analytical lab; ensures that hemp is consumer safe
  • Bill aligns the state with federal rulings; supportive of new agriculture business in TX
  • Change to 30-day harvest window very important

 

Aaron Owens, Tejas Hemp, TX Hemp Coalition – for

  • Organically produces plants
  • Do not get to monetize product immediately; up to farmers to get product on the market
  • Extending harvest window from 20-30 days in compliance with USDA rules extremely important
  • Certification of seeds and plants (cuttings, transplants) very important
  • Concept of raising THC limit from 0.3 to 1% not in this bill but coming down the line soon
  • CS is what is best for farmers and industry as a whole

 

Elias Jackson, Vyripharm Biopharmaceuticals – for  

  • Creating registration process for CBD products important; should be included in a trace track certification program
  • Illegal players like CA have created a grey market; TX can step in to become the gold standard
  • Producers need to be able to protect themselves and the products
  • Bill needs to be amended to add certification program for public health and safety, transparency, control over market
  • Currently no system in place to share data on what is in substances; do not need outside players destroying industry in Texas
  • Rosenthal – basically, you are proposing a national standard?
    • Absolutely
    • Companies testing now are doing a great job, we are just lacking a certification program which I think is unethical
  • Rosenthal – so people testing now are not doing anything wrong, but there is no standard in place?
    • Absolutely; can have all the best intentions but without establishing certification we aren’t protecting growers/consumers
  • Rosenthal – so certification would be for testing and not growers?
    • Would enable law enforcement to step in against bad players
    • Consumers can have confidence in products
    • Certification program would lead overall industry to look at Texas, make TX number 1
  • Rosenthal – does regulating and testing add a layer of cost that other states do not pay?
    • Goal is not to overregulate, just to add small level of certification
    • May be a small increase, but getting rid of bad players would increase revenues and cost would eventually go down
    • Have to get together to make sure producers and manufacturers aren’t being levied a higher cost
  • Rosenthal – DSHS would be in charge?
    • Yes; Would ensure uniformity across the market
  • Would let us control the pipeline, put us in control of the industry

 

Skip Leake, PrimeMyBody – for

  • Supports the bill

 

Zachary Maxwell, Texas Hemp Growers – for

  • Most concerns have been addressed through CS
  • Already non-profits offering certification programs; prefer state stays out of it to keep costs lower
  • TDA charging $75 fee for transporting hemp, goes against word of state law
  • Rosenthal – should we mandate a certification through the state?
    • No, I do not think so
  • Rosenthal – if we do not, some will use third parties and some will not?
    • Yes
  • Rosenthal – how do we ensure that there are standards set for certification?
    • Think it should be up to the individual
    • Have to do full panel testing anyway, might be able to share that information through a police database
    • All for sharing information, do not support requirement of state mandated certification
  • Rosenthal – seems like a lot of this stuff is already sold without information being made available to public?
    • That can be reported to DSHS and there are consequences for mislabeling
  • Rosenthal – just think if we do not have a set of standards there could be a problem
    • Starting to see national third-party non-profit orgs
    • Testing labs are technically required to meet accreditations already
    • Not a lawless industry; bad actors often get called out by industry already
  • Anderson – are you for increasing THC from 0.3 to 1%? is it a major difference?
    • Yes; bill in action from Paul, would help eliminate destroying crops
    • 3% is not based on anything, no documentation or industry association to say that is “the number”
  • Rosenthal – any knowledge of THC levels in recreational products sold in other state levels?
    • In states like Colorado, it is normally around 20% but can go up to 25-26%
    • Amendment to states medical program that would raise their limit to 5%
  • Rosenthal – do you know if that is backed by Texas Medical Association?
    • I do not

 

Sheila Hemphill, Texas Hemp Industries Association – for

  • Witnessed some overreach in DSHS rules that prohibited the type of sale of these types of products
  • Inhalation is a delivery method for CBD treatment; sales tax should go towards Texas, not other states who sell these products

 

Susan Hays, Wild Hempettes of Dallas – for

  • Has numerous hemp clients across the supply chain; Wild Hempettes produce and supply smokable hemp products
  • Would like to remove language that would ban the manufacturing/processing of hemp for smoking
  • Hemp is a legal product, the government cannot ban a legal product
  • Are a lot of products being sold online; need regulations/safety standards
  • Best price a farmer can get for high quality smokable flower is $100 per lb
  • For the Texas Hemp Program to be viable, cannot have regulations greater than federal

 

Jesse Williams, Self – for

  • Need to see independent third-party testing to ensure items are what the producers claim they are
  • Do not need to certify these businesses, but they should follow DSHS rule
  • Need an audit system to be deployed by DSHS, TDA, and DPS for those who have an online retail space and storefront in the state
    • Notes there was a case in Houston where a business was given a falsified certificate
  • Online retailers often sell counterfeit product; need to those who have an online retail space and a physical storefront in the state
  • Ban on smokable hemp is arbitrary and places undue burden
  • Are existing tests police officers could use to determine high/low THC levels; need to be able to go after bad actors

 

Coleman Hemphill, Texas Hemp Industries Association – for

  • Bill conforms best elements of USDA’s final rule
  • Should add to the definition of hemp: no more than 0.3% or less delta 9 and no more than the federal limit for negligence (1% total THC)
  • If the definition is changed, majority of harvest will be in compliance
  • TDA is registering out of state suppliers that have allowed as high as 30% levels
  • Testing should be done in the state, state now have the most competitive low prices for it
  • Has been growing fees for transportation of products; should not have to pay TDA for protection of those products when they could be tested in house
  • One of the highest land value uses is from consumable hemp products is those that can be vaped; state has determined they are non-intoxicating products
  • Aim to protect farmers by leaning on federal language and to ensure public safety

 

Shaun Salvaje, Self – for

  • Is a beginning farmer in this industry; bill is an opportunity for Texas farmers to lead an expensive industry

T. O King, in closing

  • Bill aims to find the middle ground in order to pass

HB 3948 left pending