Impeachment No Match for Prohibition
on THC in Terms of State Funds Waste
Capitol Inside
March 24, 2025
Lieutenant Governor Dan Patrick spent 18 months calling over and over for Texas House leaders to reveal the price tag for the impeachment of Attorney General Ken Paxton. Patrick seemed shocked and disgusted but not surprised when the State Auditor's office reported on Friday that the House spent more than $5 million on the prosecution of the state's top lawyer in 2023.
"What a complete waste of money!" Patrick declared in a statement that he post on X. “Now that taxpayers have the facts about how former Speaker Dade Phelan frivolously wasted taxpayer funds for an ill-fated political gambit, we can put this shameful epoch of our state’s history behind us."
Few inside the Austin beltway will quibble with the Senate leader's assessment on the frittering of public funds on an impeachment that never appeared to have any chance for success in the Texas Senate with Patrick as the trial judge.
But the amount of money that Texas lawmakers will have thrown away with the shuttering of a THC industry they unleashed unwittingly six years ago would be astronomically higher than the tab that the House ran up on the Paxton impeachment.
State Auditor Lisa Collier found that the House poured more than $5.1 million into the Paxton prosecution on corruption charges after reviewing records that Speaker Dustin Burrows boxed up for Patrick earlier this month. That's a drop in the bucket compared to the future revenues that the state would be forfeiting if it shutters an $8 billion cannabis business that was conceived with an inadvertent assist from the lieutenant governor in 2019 when the Legislature legalized hemp for commercial purposes here.
Patrick contends that cannabis profiteers seized on a loophole in the hemp bill. But the industry that the Republican-controlled Legislature spawned with the hemp bill mushroomed immediately without the need for government subsidies, lobby teams or favors. GOP State Senator Charles Perry - a Lubbock Republican who the SB 3 chief sponsor - said more than 8,000 THC dispensaries have popped up in Texas since he guided the hemp measure to Governor Greg Abbott's desk six years ago.
Lawmakers can expect most if not all of those small Texas businesses to close if the THC ban in Senate Bill 3 becomes law and
restricts their sales to CBD and CBG and makes it more expensive to be licensed by the state. But officials have yet to estimate how many people would lose jobs or other adverse economic impacts that SB 3 would bring about as the first case of a state in the U.S. shutting down a prosperous industry whose conception it had facilitated a few years earlier.
The fiscal note on SB 3 shows that the measure would cost the state an estimated $27 billion during the budget cycle that begins in September. The Legislative Budget Board analysis projects that Texas cities would lose nearly $5 million over the next two years while counties take a hit of nearly $2 million if SB 3 becomes law in the form it cleared the Senate last week on a bipartisan vote.
But the LBB review didn't calculate hypotheticals on the loss of potential future revenues based on taxes and fees that lawmakers have passed up for six years while cannabis shops spread like wildfire across the Lone Star State.
Do the math. $8 billion times the state 6.025 percent sales tax is $500 million. That's
100,000 times more than the funds that the House flushed away on the Paxton impeachment. The impeachment will go down as one of the all-time examples of waste in Texas government.
But the killing of the Texas THC trade could cost the state and cities $660 million when the 2 cent share of the sales tax for cities is throw into the mix.
Texas would join Alaska, Iowa and Delaware as the only states where products with THC known as Delta-9 would be illegal if the SB 3 becomes law.
But the House may eschew the historically regressive approach with legislation that GOP State Rep. Ken King of Canadian is sponsoring in a catch-up move that would establish a regulatory structure with operating license fees that are more reasonably priced, oversight and other needs that lawmakers failed to anticipate with the hemp bill.
The King plan in House Bill 28 would bar the sale of THC products made from marijuana while allowing retailers to continue to make Delta-9, CBD and CBG products available for customers. Delta-9 made from hemp produces an effect similar to cannabis consumables in states where marijuana is legal and heavily regulated and taxed.
King is one of the lower chamber's most powerful members as the State Affairs Committee chairman. SB 3 originated in the State Affairs Committee in the Capitol's east wing.
The odds for a House vote to ban all THC products may be extremely poor based on the dramatic differences between the competing bills.
The lieutenant governor removed the roadblock on hemp after learning that it would help veterans who are suffering from PTSD and other maladies stemming from their service.
The same veterans would be high on the list of losers as a result if Texas lawmakers do a turnabout of 180-degrees on THC. Alcohol dealers would be among the biggest winners in such an event as a consequence of the competition they fear.
But Patrick said he knew what the State Auditor review of the Paxton impeachment expenses would show.
“The State Auditor’s report is exactly as expected," Patrick said in a statement. "Former Speaker Phelan was hiding $4,436,498 in expenditures from taxpayers. He caused taxpayers to lose $5,110,038 in total costs. What a complete waste of money! The House’s total was more than 10 times the Senate’s expenditures.
“Now that taxpayers have the facts about how former Speaker Dade Phelan frivolously wasted taxpayer funds for an ill-fated political gambit, we can put this shameful epoch of our state’s history behind us," the lieutenant governor added. "I thank Speaker Burrows for releasing the House’s records and for his commitment to transparency.”
Phelan - for the record - had indicated that the House spent at least $4 million on the impeachment. The State Auditor found that expenses for outside attorneys, investigators and other support services accounted for 86 percent of the total.
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