House Hemp Rewrite Would Establish Tax
on THC Products that Senate Voted to Ban
Capitol Inside
May 20, 2025
The Texas House was poised on Tuesday to debate the imposition of a new state tax on consumable THC products that Lieutenant Governor Dan Patrick was trying to ban when he hatched Senate Bill 3 and pushed it through the upper chamber more than two months ago.
The dramatically overhauled version of SB 3 that's set for a vote in the House floor today would establish a regulatory framework for a thriving hemp industry with licensing fees and a tax that would be less than levies that Colorado and New Mexico charge for similar products that are manufactured from the marijuana plant.
A move appeared to be afoot among conservatives for an amendment that would revert back to the blanket THC prohibition that the House committee scraped. Such a ban would shut down an entire industry and put countless thousands of Texans out of work as employees at an estimated 8,000 to 10,000 dispensaries across Texas.
But GOP State Rep. Tom Oliverson of Cypress and other House members say they might have the votes for amendment that would return to the Senate ban that Patrick has ranked as high third-highest priority for the 2025 regular session.
State Rep. Ken King - a Canadian Republican who's the House sponsor for SB 3 - asked the House to postpone consideration of the measure two times on Tuesday with 6 p.m. as the latest setting.
The House rewrite on SB 3 would create a tax of 2 cents for every 2.5 milligrams of Delta-9 THC that would be for sale at licensed retail dispensaries across the state in consumable forms like gummies and beverages as well. Sections on taxation cover a big chunk of the THC regulations plan that spans 140 pages in the measure that's scheduled for a showdown on the floor today. SB 3 was only 14 pages long when it emerged from the east wing in March.
The proposed levy that the House panel incorporated into SB 3 would force consumers to pay about $80 cents to $1 in state taxes on a typical package of hemp-based edibles with Delta-9 that costs $20 and contains 10 pieces with 10 milligrams of THC each. The tax on THC in Colorado is 15 percent of retail sales while the state of New Mexico takes a smaller cut at 12 percent. So consumers in those states pay $3 or less for THC products that are sold in the same basic sizes and proportions as those that Texas would regulate in the plan on the House floor in SB 3.
The restoration of the Patrick ban would be spurning of a majority in Texas voters who've supported the legalization of THC for recreational use in growing numbers. Cannabis is popular with Republican and Democratic voters alike.
The House bill would put the Texas Alcoholic Beverage Commission in charge of rulemaking, enforcement and the establishment of annual fees for a variety of licenses ranging from $500 for a hemp retailer permit to $5,000 for a brewer permit to $10,000 for "consumer delivery" permits. Mixed beverage permits or licenses to operate private clubs where THC products are available would run $2,650 under the language of the House proposal.
more to come ...
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