House Rewrite Would Impose Sales Taxes
on THC Products that Senate Wants to Ban
Capitol Inside
May 1, 2025
A Texas House committee ripped the teeth from the Senate's proposed ban on THC on Wednesday night when it approved a watered-down version of Senate Bill 3 complete with a state tax on the sale of gummies, beverages and other products that are made from hemp and marketed as Delta-9.
The State Affairs Committee voted unanimously to replace the blanket prohibition that the Senate endorsed with a dramatic rewrite of the legislation that Lieutenant Governor Dan Patrick ranked as his third most pressing priority facing Texas lawmakers in the regular session in 2025.
The House plan seeks to play catch on an industry that Governor Greg Abbott and the Republican-controlled Legislature effectively created in 2019 with the legalization of products made from hemp. The House substitute for the Senate THC ban would regulate a rapidly-growing industry that features more than 8,000 retail dispensaries where tens of thousands of Texans are employees.
The House plan would keep the current Texas law that outlaws THC products derived from the marijuana plant. But the House overhaul of SB 3 would give the state the ability to capitalize on the popularity of cannabis with a proposed tax of 2 percent for every 2.5 milligrams of hemp-based THC that a customer purchases.
Most THC edibles are sold in packages with 10 pieces that contain 10 milligrams of Delta-9 or the less potent Delta-8. So consumers would be forking over an additional 80 cents for a box of gummies or chocolate that would continue to be for sale here if the House remake of SB 3 became law.
The retail price could be higher for beverages that are made with legal THC in Texas with a line in the House substitute that would require licensed dealers to pay the same tax on shipments that alcoholic beverage retailers face.
Cannabis drinks would be more expensive than edibles infused with Delta-9.
There's no estimate at this point on the infusion of new revenues that Texas government would reap with such a levy in place. But it would be worth billions of dollars for the state in the next few years based on earlier estimates. Lawmakers could earmark hemp THC taxes for the general revenue fund or dedicate some or all of them to a specific purpose like health care or law enforcement.
The House plan would create new license requirements and fees for the commercial sale at dispensaries that are small businesses in almost every case.
The Senate sponsor - GOP State Rep. Charles Perry of Lubbock - and Patrick have claimed that hemp dispensaries had been peddling poison to children for all practical purposes during the past six years. Perry, who chairs the Water, Agriculture & Rural Affairs Committee, would have cause for guilt from this if the claim were true as the author of the hemp bill as well.
But none of the senators who support an all-encompassing prohibition on all THC products has produced any evidence to support the allegation that they've used to push a complete ban.
The House rewrite of SB 3 is loaded with potential land mines that a conference committee would have to navigate if the committee substitute clears the lower chamber with the revisions and the Senate rejected them. Or the Senate could send the THC regulatory measure in the form that arrived from the House with a vote that would send it to Abbott's desk.
Patrick has indicated that such a plan could be dead on arrival in the east wing of the Capitol. But he could keep an open mind about a compromise to regulate a thriving industry that's been a productive addition to the Texas economy while operating legally without the need for government subsidies.
State Rep. Ken King - a Canadian Republican who chairs the State Affairs Committee - filed the THC measure as a separate bill that was similar to the version that the panel passed last night on a 15-0 vote.
more to come ...
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