HB 28

89R18934 CJD-F
		By: King
  H.B. No. 28
  A BILL TO BE ENTITLED
  AN ACT
  relating to the regulation of consumable hemp products and
  providing for the transfer of regulatory functions; requiring a
  registration; imposing fees; creating criminal offenses; providing
  an administrative penalty.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 443.001, Health and Safety Code, is
  amended by amending Subdivision (1) and adding Subdivision (8-a) to
  read as follows:
               (1)  "Consumable hemp product" means [food, a drug,] a
  device[,] or a cosmetic, as those terms are defined by Section
  431.002, that:
                     (A)  contains hemp or one or more hemp-derived
  cannabinoids; and
                     (B)  does not contain any amount of a cannabinoid
  other than cannabidiol, cannabigerol, or delta-9
  tetrahydrocannabinol [, including cannabidiol].
               (8-a)  "Minor" means a person under 21 years of age.
         SECTION 2.  Subchapter A, Chapter 443, Health and Safety
  Code, is amended by adding Section 443.0025 to read as follows:
         Sec. 443.0025.  LOW-THC CANNABIS.  This chapter does not
  apply to low-THC cannabis regulated under Chapter 487.
         SECTION 3.  Subchapter C, Chapter 443, Health and Safety
  Code, is amended by adding Section 443.1035 to read as follows:
         Sec. 443.1035.  LICENSING FEES.  (a) An applicant for a
  license under this subchapter shall pay an initial licensing fee to
  the department in the amount of $5,000 for each location where the
  applicant intends to process hemp or manufacture a consumable hemp
  product.
         (b)  Before the department may renew a license as provided by
  Section 443.104, a license holder shall pay a renewal fee to the
  department in the amount of $2,500 for each location where the
  applicant intends to process hemp or manufacture a consumable hemp
  product.
         SECTION 4.  Section 443.104(b), Health and Safety Code, is
  amended to read as follows:
         (b)  The department shall renew a license if the license
  holder:
               (1)  is not ineligible to hold the license under
  Section 443.102;
               (2)  has not violated this chapter or a rule adopted
  under this chapter;
               (3)  submits to the department any license renewal fee;
  and
               (4) [(3)]  does not owe any outstanding fees to the
  department.
         SECTION 5.  Subchapter C, Chapter 443, Health and Safety
  Code, is amended by adding Section 443.106 to read as follows:
         Sec. 443.106.  MANUFACTURE OF CONSUMABLE HEMP PRODUCTS.  (a) 
  A license holder may not manufacture a consumable hemp product that
  contains any amount of a synthesized cannabinoid.
         (b)  Consumable hemp products must be produced using current
  good manufacturing practices, as defined by executive commissioner
  rule.
         SECTION 6.  Sections 443.151(a), (b), and (d), Health and
  Safety Code, are amended to read as follows:
         (a)  A consumable hemp product must be tested as provided
  by[:
               [(1)]  Subsections (b), [and] (c), and [; or
               [(2)  Subsection] (d).
         (b)  Before a hemp plant is processed or otherwise used in
  the manufacture of a consumable hemp product, a sample representing
  the plant must be tested, as required by the executive
  commissioner, to determine:
               (1)  the concentration and identity of the [various]
  cannabinoids in the plant; and
               (2)  the presence or quantity of heavy metals,
  pesticides, microbial contamination, and any other substance
  prescribed by the department.
         (d)  Before [Except as otherwise provided by Subsection (e),
  before] a consumable hemp product is sold at retail or otherwise
  introduced into commerce in this state, a sample representing the
  hemp product must be tested:
               (1)  by a laboratory located in this state that is
  accredited by an accreditation body in accordance with
  International Organization for Standardization ISO/IEC 17025 or a
  comparable or successor standard to determine the identity and
  [delta-9 tetrahydrocannabinol] concentration of any cannabinoids
  contained in the product; and
               (2)  by an appropriate laboratory to determine that the
  product does not contain a substance described by Subsection (b)(2)
  [(b)] or (c) in a quantity prohibited for purposes of those
  subsections.
         SECTION 7.  Section 443.152(c), Health and Safety Code, is
  amended to read as follows:
         (c)  A license holder shall make available to a seller of a
  consumable hemp product processed or manufactured by the license
  holder the results of testing required by Section 443.151.  The
  results may accompany a shipment to the seller or be made available
  to the seller electronically.  If the results are not able to be
  made available, the seller may have the testing required under
  Section 443.151 performed on the product and shall make the results
  available to a consumer and the department.
         SECTION 8.  The heading to Section 443.2025, Health and
  Safety Code, is amended to read as follows:
         Sec. 443.2025.  REGISTRATION REQUIRED FOR RETAILERS OF
  CERTAIN CONSUMABLE HEMP PRODUCTS.
         SECTION 9.  Section 443.2025, Health and Safety Code, is
  amended by amending Subsections (b), (d), (f), and (g) and adding
  Subsections (h) and (i) to read as follows:
         (b)  A person may not sell consumable hemp products
  containing a cannabinoid [cannabidiol] at retail in this state
  unless the person registers with the department each location
  owned, operated, or controlled by the person at which those
  products are sold. A person is not required to register a location
  associated with an employee [or independent contractor] described
  by Subsection (d).
         (d)  A person is not required to register with the department
  under Subsection (b) if the person is[:
               [(1)]  an employee of a registrant[; or
               [(2)  an independent contractor of a registrant who
  sells the registrant's products at retail].
         (f)  The owner of a location at which consumable hemp
  products are sold shall annually pay to the department a
  registration fee in the amount of $2,000 for each location owned by
  the person at which those products are sold [The department by rule
  may adopt a registration fee schedule that establishes reasonable
  fee amounts for the registration of:
               [(1)  a single location at which consumable hemp
  products containing cannabidiol are sold; and
               [(2)  multiple locations at which consumable hemp
  products containing cannabidiol are sold under a single
  registration].
         (g)  The department shall adopt rules to:
               (1)  implement and administer this section; and
               (2)  require a person required to register under this
  section to provide to the department information regarding the type
  and concentration of each cannabinoid present in each consumable
  hemp product offered for sale by the person.
         (h)  The department shall provide to the Department of Public
  Safety the information provided to the department under Subsection
  (g)(2).
         (i)  A person may not sell consumable hemp products unless
  the person has provided to the department written consent from the
  person or the property owner, if the person is not the property
  owner, allowing the department, the Department of Public Safety,
  and any other state or local law enforcement agency to enter onto
  all premises where consumable hemp products are sold to conduct a
  physical inspection or to ensure compliance with this chapter and
  rules adopted under this chapter.
         SECTION 10.  Section 443.203, Health and Safety Code, is
  amended to read as follows:
         Sec. 443.203.  DECEPTIVE TRADE PRACTICE.  (a) A person who
  sells, offers for sale, or distributes a consumable hemp product
  [cannabinoid oil, including cannabidiol oil,] that the person
  claims is processed or manufactured in compliance with this chapter
  commits a false, misleading, or deceptive act or practice
  actionable under Subchapter E, Chapter 17, Business & Commerce
  Code, if the product [oil] is not processed or manufactured in
  accordance with this chapter.
         (b)  A person who sells, offers for sale, or distributes a
  consumable hemp product [cannabinoid oil] commits a false,
  misleading, or deceptive act or practice actionable under
  Subchapter E, Chapter 17, Business & Commerce Code, if [the oil]:
               (1)  the product contains harmful ingredients;
               (2)  the product is not produced in compliance with 7
  U.S.C. Chapter 38, Subchapter VII; [or]
               (3)  the product's packaging or advertising indicates
  that the product is for medical use; or
               (4)  the product has a delta-9 tetrahydrocannabinol
  concentration of more than 0.3 percent or contains more than 10
  milligrams of delta-9 tetrahydrocannabinol per serving of the
  product.
         SECTION 11.  Section 443.205, Health and Safety Code, is
  amended by amending Subsections (a) and (c) and adding Subsection
  (c-1) to read as follows:
         (a)  Before a consumable hemp product that contains or is
  marketed as containing [more than trace amounts of] cannabinoids
  may be distributed or sold, the product must:
               (1)  be labeled in the manner provided by this
  subchapter, including [section with] the following information:
                     (A) [(1)]  batch identification number;
                     (B) [(2)]  batch date;
                     (C) [(3)]  product name;
                     (D) [(4)]  a uniform resource locator (URL) that
  provides or links to a certificate of analysis for the product or
  each hemp-derived ingredient of the product;
                     (E) [(5)]  the name of the product's
  manufacturer;
                     (F)  the amount of cannabidiol, cannabigerol, or
  delta-9 tetrahydrocannabinol in each serving or unit of the
  product; and
                     (G) [(6)]  a certification that the delta-9
  tetrahydrocannabinol concentration of the product [or each
  hemp-derived ingredient of the product] is not more than 0.3
  percent and that each serving of the product contains not more than
  10 milligrams of delta-9 tetrahydrocannabinol;
               (2)  be prepackaged or placed at the time of sale in
  packaging or a container that is:
                     (A)  tamper-evident;
                     (B)  child-resistant; and
                     (C)  if the product contains multiple servings or
  consists of multiple products purchased in one transaction,
  resealable in a manner that allows the child-resistant mechanism to
  remain intact; and
               (3)  bear a warning label that reads as follows:
         "WARNING: Consumption of this product will result in a
  positive drug test.".
         (c)  The label required by Subsection (a) must appear on the
  outer packaging of each unit of the product intended for individual
  retail sale.  [If that unit includes inner and outer packaging, the
  label may appear on any of that packaging.]
         (c-1)  If a container contains multiple servings of a
  consumable hemp product, each serving must be individually packaged
  within the container.
         SECTION 12.  Subchapter E, Chapter 443, Health and Safety
  Code, is amended by adding Sections 443.2055 and 443.2056 to read as
  follows:
         Sec. 443.2055.  OFFENSE: MARKETING OF CONSUMABLE HEMP
  PRODUCT OR PACKAGING IN MANNER ATTRACTIVE TO MINORS.  (a) A person
  commits an offense if the person markets, advertises, sells, or
  causes to be sold a consumable hemp product containing a
  hemp-derived cannabinoid that:
               (1)  is in the shape of a human, animal, fruit, or
  cartoon or in another shape that is attractive to children; or
               (2)  is in packaging or a container that:
                     (A)  is in the shape of a human, animal, fruit, or
  cartoon or in another shape that is attractive to children;
                     (B)  depicts an image of a human, animal, fruit,
  or cartoon or another image that is attractive to children;
                     (C)  imitates or mimics trademarks or trade dress
  of products that are or have been primarily marketed to minors;
                     (D)  includes a symbol that is primarily used to
  market products to minors;
                     (E)  includes an image of a celebrity;
                     (F)  includes an image that resembles a food
  product, including candy or juice; or
                     (G)  includes an image that resembles a hemp
  flower.
         (b)  In this section, a cartoon includes a depiction of an
  object, person, animal, creature, or any similar caricature that:
               (1)  uses comically exaggerated features and
  attributes;
               (2)  assigns human characteristics to animals, plants,
  or other objects; or
               (3)  has unnatural or extra-human abilities, such as
  imperviousness to pain or injury, x-ray vision, tunneling at very
  high speeds, or transformation.
         (c)  An offense under this section is a state jail felony.
         Sec. 443.2056.  OFFENSE: MISLEADING CONSUMABLE HEMP
  PACKAGING.  (a) A person commits an offense if the person sells or
  offers for sale a consumable hemp product that contains or is
  marketed as containing hemp-derived cannabinoids in a package that
  depicts any statement, artwork, or design that would likely mislead
  a person to believe:
               (1)  the package does not contain a hemp-derived
  cannabinoid; or
               (2)  the product is intended for medical use, including
  by depicting a green cross.
         (b)  An offense under this section is a Class A misdemeanor.
         SECTION 13.  Section 443.206, Health and Safety Code, is
  amended to read as follows:
         Sec. 443.206.  RETAIL SALE OF OUT-OF-STATE CONSUMABLE HEMP
  PRODUCTS.  Retail sales of consumable hemp products processed or
  manufactured outside of this state may be made in this state when
  the products were processed or manufactured in another state or
  jurisdiction if the products:
               (1)  were manufactured or processed in compliance with:
                     (A) [(1)]  that state's [state] or jurisdiction's
  plan approved by the United States Department of Agriculture under
  7 U.S.C. Section 1639p;
                     (B) [(2)]  a plan established under 7 U.S.C.
  Section 1639q if that plan applies to the state or jurisdiction; or
                     (C) [(3)]  the laws of that state or jurisdiction
  if the products are tested in accordance with, or in a manner
  similar to, Section 443.151;
               (2)  do not contain a concentration of delta-9
  tetrahydrocannabinol in excess of 0.3 percent; and
               (3)  do not contain an amount of delta-9
  tetrahydrocannabinol in excess of 10 milligrams in each serving.
         SECTION 14.  Subchapter E, Chapter 443, Health and Safety
  Code, is amended by adding Section 443.208 to read as follows:
         Sec. 443.208.  MAXIMUM AMOUNT OF DELTA-9
  TETRAHYDROCANNABINOL.  (a) A license holder may not manufacture and
  a person required to register under Section 443.2025 may not sell,
  give, or cause to be sold or given a consumable hemp product that
  contains more than 10 milligrams of delta-9 tetrahydrocannabinol in
  a container.
         (b)  A person required to register under Section 443.2025 may
  not sell, give, or cause to be sold or given consumable hemp
  products with a total of more than 10 milligrams of delta-9
  tetrahydrocannabinol per transaction.
         SECTION 15.  Chapter 443, Health and Safety Code, is amended
  by adding Subchapters F, G, and H to read as follows:
  SUBCHAPTER F.  CRIMINAL OFFENSES
         Sec. 443.251.  OFFENSE: MANUFACTURE, DELIVERY, OR
  POSSESSION WITH INTENT TO DELIVER OF CERTAIN CONSUMABLE HEMP
  PRODUCTS.  (a) A person commits an offense if the person knowingly
  manufactures, delivers, or possesses with intent to deliver a
  consumable hemp product that:
               (1)  has a delta-9 tetrahydrocannabinol concentration
  of more than 0.3 percent; or
               (2)  contains more than 10 milligrams of delta-9
  tetrahydrocannabinol in a container or more than 10 milligrams of
  delta-9 tetrahydrocannabinol in each serving.
         (b)  An offense under this section is a felony of the third
  degree.
         (c)  If conduct constituting an offense under this section
  also constitutes an offense under another law, the actor may be
  prosecuted under this section, the other law, or both.
         Sec. 443.252.  OFFENSE: POSSESSION OF CERTAIN CONSUMABLE
  HEMP PRODUCTS.  (a) A person commits an offense if the person
  knowingly or intentionally possesses a consumable hemp product
  that:
               (1)  has a delta-9 tetrahydrocannabinol concentration
  of more than 0.3 percent; or
               (2)  contains more than 10 milligrams of delta-9
  tetrahydrocannabinol in a container or more than 10 milligrams of
  delta-9 tetrahydrocannabinol in each serving.
         (b)  An offense under this section is a Class A misdemeanor.
         (c)  If conduct constituting an offense under this section
  also constitutes an offense under another law, the actor may be
  prosecuted under this section, the other law, or both.
         Sec. 443.253.  OFFENSE: SALE OR DISTRIBUTION OF CERTAIN
  CONSUMABLE HEMP PRODUCTS TO PERSONS YOUNGER THAN 21 YEARS OF AGE;
  PROOF OF AGE REQUIRED.  (a) A person commits an offense if the
  person, with criminal negligence, sells a consumable hemp product
  that contains or is marketed as containing hemp-derived
  cannabinoids to a person who is younger than 21 years of age.
         (b)  An employee of the owner of a store in which consumable
  hemp products that contain or are marketed as containing
  hemp-derived cannabinoids are sold at retail is criminally
  responsible and subject to prosecution for an offense under this
  section that occurs in connection with a sale by the employee.
         (c)  An offense under this section is a Class A misdemeanor.
         (d)  It is a defense to prosecution under Subsection (a) that
  the person to whom the consumable hemp product was sold presented to
  the defendant apparently valid proof of identification.
         (e)  A proof of identification satisfies the requirements of
  Subsection (d) if it contains a physical description and photograph
  consistent with the person's appearance, purports to establish that
  the person is 21 years of age or older, and was issued by a
  governmental agency.  The proof of identification may include a
  driver's license issued by this state or another state, a passport,
  or an identification card issued by a state or the federal
  government.
         (f)  The owner of a store in which consumable hemp products
  that contain or are marketed as containing hemp-derived
  cannabinoids are sold, or an employee of the owner, may not display
  consumable hemp products for sale adjacent to products that are
  legal for children to consume.
         Sec. 443.254.  OFFENSE: MANUFACTURE, DISTRIBUTION, OR SALE
  OF CONSUMABLE HEMP PRODUCTS FOR SMOKING OR INHALING.  (a) A person
  commits an offense if the person manufactures, distributes, sells,
  or offers for sale a consumable hemp product for smoking or
  inhaling.
         (b)  An offense under this section is a Class A misdemeanor.
         Sec. 443.2545.  OFFENSE:  MANUFACTURE, DISTRIBUTION, OR SALE
  OF EDIBLE CONSUMABLE HEMP PRODUCTS.  (a)  A person commits an
  offense if the person manufactures, distributes, sells, or offers
  for sale a consumable hemp product that is intended for eating,
  including foods, gummies, and candies.
         (b)  An offense under this section is a Class A misdemeanor.
         Sec. 443.255.  OFFENSE: SALE OR DELIVERY OF CERTAIN
  CONSUMABLE HEMP PRODUCTS NEAR SCHOOL.  (a)  In this section,
  "school" and "premises" have the meanings assigned by Section
  481.134.
         (b)  A person commits an offense if the person sells, offers
  for sale, or delivers a consumable hemp product containing a
  hemp-derived cannabinoid in, on, or within 1,000 feet of the
  premises of a school.
         (c)  An offense under this section is a state jail felony.
         Sec. 443.256.  OFFENSE: PROVISION OF CERTAIN CONSUMABLE HEMP
  PRODUCT BY COURIER, DELIVERY, OR MAIL SERVICE.  (a)  A person
  commits an offense if the person provides a consumable hemp product
  containing a hemp-derived cannabinoid by courier, delivery, or mail
  service.
         (b)  An offense under this section is a Class A misdemeanor.
         Sec. 443.257.  OFFENSE: FALSE LABORATORY REPORT.  (a)  A
  person commits an offense if the person, with the intent to deceive,
  forges, falsifies, or alters the results of a laboratory test
  authorized or required by this chapter.
         (b)  An offense under this section is a felony of the third
  degree.
         Sec. 443.258.  OFFENSE: GROWING OR SELLING HEMP FLOWER.  (a)  
  A person commits an offense if the person grows hemp flower or sells
  or offers for sale hemp flower in a manner that is not approved by
  executive commissioner rule.
         (b)  An offense under this section is a Class C misdemeanor.
  SUBCHAPTER G.  ADMINISTRATIVE ENFORCEMENT
         Sec. 443.301.  ENFORCEMENT BY DEPARTMENT.  (a) The
  department shall receive and investigate complaints concerning
  violations of this chapter by:
               (1)  a license holder under Subchapter C; or
               (2)  a registrant under Section 443.2025.
         (b)  The department may revoke, suspend, or refuse to renew a
  license or registration for a violation of this chapter or a rule
  adopted under this chapter.
         (c)  The department may impose an administrative penalty in
  an amount not to exceed $20,000 against a license holder or
  registrant for each violation of this chapter or a rule adopted
  under this chapter.
         (d)  A proceeding under this section is a contested case
  under Chapter 2001, Government Code.
  SUBCHAPTER H.  MEMORANDUM OF UNDERSTANDING
         Sec. 443.351.  MEMORANDUM OF UNDERSTANDING FOR TRANSFER OF
  REGULATORY FUNCTIONS.  The department shall enter into a
  memorandum of understanding with the Texas Alcoholic Beverage
  Commission regarding:
               (1)  the transfer of certain regulatory functions for
  consumable hemp products from the department to the Texas Alcoholic
  Beverage Commission;
               (2)  changing the licensing structure for consumable
  hemp products to a three-tiered structure that includes
  manufacturers, wholesalers, and retailers;
               (3)  the locations at which consumable hemp products
  may be sold, including locations for the on-premises consumption of
  consumable hemp products;
               (4)  the regulation of locations described by
  Subdivision (3), including any signage required for informing
  consumers;
               (5)  the amount of fees to charge permittees or
  licensees;
               (6)  the funding mechanism for a consumable hemp
  regulatory scheme, including the taxation of consumable hemp and
  the disposition of those taxes;
               (7)  the regulation of synthetic cannabinoids;
               (8)  regulating the retail sale of hemp flower;
               (9)  the creation of open container laws for consumable
  hemp products;
               (10)  the certification of testing facilities;
               (11)  regulating the mixing of consumable hemp products
  with alcohol or caffeine; and
               (12)  the packaging and labeling of consumable hemp
  products.
         SECTION 16.  The following provisions of the Health and
  Safety Code are repealed:
               (1)  Section 443.151(e);
               (2)  Section 443.201;
               (3)  Sections 443.202(a) and 443.2025(a) and (c); and
               (4)  Section 443.204.
         SECTION 17.  As soon as practicable after the effective date
  of this Act, the Department of State Health Services shall adopt the
  rules required by Section 443.2025(g), Health and Safety Code, as
  amended by this Act.
         SECTION 18.  The changes in law made by this Act apply to the
  manufacture, sale, delivery, or possession of a consumable hemp
  product that occurs on or after the effective date of this Act.  The
  manufacture, sale, delivery, or possession of a consumable hemp
  product that occurs before the effective date of this Act is
  governed by the law in effect on the date the manufacture, sale,
  delivery, or possession occurred, and the former law is continued
  in effect for that purpose.
         SECTION 19.  This Act takes effect January 1, 2026.