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.