Five Reasons Why Texas Could Be “The Great Hemp State”

By Shawn Hauser, Partner; Courtney Barnes, Associate Attorney; Caitlin Wightman, Law Clerk

Jul 30, 2019

The passage of the 2018 Farm Bill opened the gates for a promising US hemp economy and a long-overdue cash crop for farmers by legalizing hemp as an agricultural commodity and establishing a federal regulatory framework for domestic hemp production. With this historical end of prohibition and rare opportunity for a new cash crop, most states are eagerly re-tooling their limited 2014 Farm Bill hemp research pilot programs into robust state regulatory regimes, thus treating hemp like other crops.

States can now have primary regulatory control over hemp production within their jurisdictions by submitting a plan that meets certain criteria to the United States Department of Agriculture (USDA) for approval.

Even though Texas is one of a handful of states to not allow hemp production under the limited 2014 Farm Bill, it now has the potential to be big: Texas-style big. On June 10, 2019, Texas Governor Greg Abbott signed House Bill 1325 into law, establishing a hemp farming program and positioning the Lone Star State to become one of the top hemp producers and researchers in the US, and potentially internationally.

Here are five reasons why Texas could be “the great hemp state”:

1. Slow-and-Steady Wins the Race

Though it may seem that Texas is behind the curve when it comes to hemp production, the state will likely benefit from being a late adopter. The 2014 Farm Bill provided the authorization and framework for states to experiment with hemp production, but lacked any federal regulation or guidance as to what a successful hemp program should look like. As a result, the first movers in other states spent a considerable amount of time working out the kinks in hemp policy, understanding the plant, developing infrastructure to grow and process it, and laying the groundwork for farmers to smoothly transition into the federal regulatory regime.

While other states determined the best approach for regulating hemp through trial, error, and refinement, Texas legislators were able to create a regulatory program incorporating best practices and the hard lessons learned by other states. A diligent and collaborative legislative process, incorporating these lessons and requirements under the great leadership of Representative Tracy King and Senator Charles Perry, resulted in the hemp bill getting unanimous support in the House and Senate. Also, because the 2018 Farm Bill was already in effect when the Texas bill was drafted in 2019, legislators could be sure that the bill incorporated all the 2018 Farm Bill minimum requirements from the start. Given the size of the state and its huge agricultural economy, Texas may reap benefits from implementing in line with the federal regulations.

2. Quality Control and Consumer Safety

While the U.S. Food and Drug Administration (FDA) is grappling with how to create a uniform federal regulatory structure for hemp-derived cannabidiol (CBD) products in foods and dietary supplements, the Texas legislature proactively drafted a business-friendly law with consumer safety at the core. HB 1325 regulates the production, labeling, and sale of hemp products intended for human consumption, providing law enforcement with the tools necessary to identify bad actors. Subject to rulemaking, HB 1325 also requires robust safety and quality testing at various stages of the supply chain and imposes hemp-specific labeling requirements for consumable products sold in the state. These policies were created to ensure consumer confidence in Texas-made hemp products.

3. Size, Climate and Geography Advantages

Millions of acres of farmland and a great farming climate make the Lonestar State well-poised to dominate the nation’s hemp economy. Some farmers in Texas actually grew hemp up until the late 1930s, when it was outlawed due to fears over marijuana prohibition! Encompassing 268,697 square miles, Texas is one of the largest states in land area in the nation, second only to Alaska. Additionally, Texas is home to over 130 million acres of farmland, and more farms operate in Texas than any other state in the nation. In fact, Texas has more farms than first and second runners-up, Missouri and Iowa, combined. Texas also boasts more women and minority farm operations than any other state, and 1 in every 7 workers is in an agriculture-related job.

Hemp requires less water and only half of the per-plant land area of cotton – Texas’ number-one agricultural crop. Texas’ geographical advantages being bordered by Mexico and international waterways, facilitates ease of trade and export. Once hemp production is allowed in Mexico, Texas will be in a prime location to take a leadership role in the international hemp economy.

4. Research

Texas’ unparalleled agricultural research universities will help bring the state to the forefront of the hemp industry, positioning the state as a leader in hemp research and intellectual property development. Texas A&M AgriLife Research, the state’s premier research agency in agriculture, has 13 research centers throughout the state and already established a hemp advisory board. Texas Tech University is home to the International Center for Agricultural Competitiveness, Fiber and Biopolymer Research Institute and Thornton Agricultural Finance Institute, among other agricultural research centers.

These universities have the experience, knowledge, and infrastructure at scale to pioneer hemp research on plant genetics and technology and the other tens of thousands of potential uses of the plant. While other states have made incredible progress in this space, the size, capabilities, and sophistication of Texas’ research institutions have the potential to make Texas the nation’s hemp research and innovation capital.  

5. Infrastructure

Because Texas has more farms than any other state in the nation, it also has a thriving agricultural community and a very supportive state agriculture department. Not to mention, it leads the nation in the value of farm real estate. Texas already enters the market positioned to lead with its agricultural experience and leadership, as it currently leads the nation in cattle, hay, sheep, goats, and mohair production. With significant industry support, a massive existing farming economy, and a cooperative state government, Texas will avoid some of the growing pains associated with producing and regulating a new crop. This support system will also help new farmers interested in growing hemp get the information and resources they need to get started.

Texas also has an unparalleled manufacturing infrastructure that can be adapted to support the hemp industry. According to the Office of the Texas Comptroller, Texas manufacturing accounted for 10 percent of U.S. manufacturing GDP in 2016. And while much of the textile manufacturing in the United States has moved overseas, some areas of Texas, such as El Paso, still maintain a large presence of textile and apparel manufacturers. With the increase in consumer demand for more environmentally sustainable and ethically produced products and the concern that the US manufacturing infrastructure isn’t in place to support increasing hemp production levels, manufacturing in Texas could increase with the production of new hemp products and a clear need for manufacturing infrastructure to support the new industry.

For these reasons and more, the state is poised to make a Texas-style entrance into the U.S. hemp economy and add hemp to the list of crops for which the state leads the nation in production. Texas’s law introduces a new crop to a large community of seasoned farmers and researchers and ensures that consumers from all over the country can trust hemp products grown and produced in Texas. The state’s already-thriving agriculture community, infrastructure, and research institutions will support this promising new industry and help hemp production get off the ground quickly. Texas may be one of the last states to get rid of outdated laws on hemp, but they are certainly positioned to do it right.