By: Perry, et al. S.B. No. 3     A BILL TO BE ENTITLED   AN ACT   relating to the regulation of consumable hemp products and the   hemp-derived cannabinoids contained in those products; 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 contains hemp or one or more hemp-derived   cannabinoids, including cannabidiol or cannabigerol.                (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 $10,000 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 $10,000 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.  RESTRICTION ON MANUFACTURE OF CERTAIN   CONSUMABLE HEMP PRODUCTS. A license holder may not manufacture a   consumable hemp product that contains any amount of a cannabinoid   other than cannabidiol or cannabigerol.          SECTION 6.  Section 443.151, Health and Safety Code, is   amended by amending Subsections (a), (b), and (d) and adding   Subsections (d-1) and (d-2) 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 that is:                      (A)  located in this state;                      (B)  registered with the United States Drug   Enforcement Administration; and                      (C)  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.          (d-1)  The testing required under Subsection (d) must use   post-decarboxylation, high-performance liquid chromatography, or a   similar method that includes the conversion of   tetrahydrocannabolic acid into tetrahydrocannabinol to determine   the total tetrahydrocannabinol concentration in a tested product.          (d-2)  A person that tests a consumable hemp product under   Subsection (d) shall report the test results to the department in   the form and manner required by the department.          SECTION 7.  Sections 443.152(a) and (c), Health and Safety   Code, are amended to read as follows:          (a)  A consumable hemp product that contains any amount of a   cannabinoid other than cannabidiol or cannabigerol [has a delta-9   tetrahydrocannabinol concentration of more than 0.3 percent] may   not be sold at retail or otherwise introduced into commerce in this   state.          (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.  Sections 443.202(b) and (c), Health and Safety   Code, are amended to read as follows:          (b)  Notwithstanding any other law, a person may not sell,   offer for sale, possess, distribute, or transport a cannabinoid   oil[, including cannabidiol oil,] in this state:                (1)  if the oil contains any material extracted or   derived from the plant Cannabis sativa L., other than from hemp   produced in compliance with 7 U.S.C. Chapter 38, Subchapter VII;   and                (2)  unless a sample representing the oil has been   tested by a laboratory that is accredited by an independent   accreditation body in accordance with International Organization   for Standardization ISO/IEC 17025 or a comparable or successor   standard and found to not contain any amount of a cannabinoid other   than cannabidiol or cannabigerol [have a delta-9   tetrahydrocannabinol concentration of not more than 0.3 percent].          (c)  The department [and the Department of Public Safety]   shall establish a process for the [random] testing of cannabinoid   oil[, including cannabidiol oil,] at various retail and other   establishments that sell, offer for sale, distribute, or use the   oil to ensure that the oil:                (1)  does not contain harmful ingredients;                (2)  is produced in compliance with 7 U.S.C. Chapter   38, Subchapter VII; and                (3)  does not contain any amount of a cannabinoid other   than cannabidiol or cannabigerol [has a delta-9   tetrahydrocannabinol concentration of not more than 0.3 percent].          SECTION 9.  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 10.  Section 443.2025, Health and Safety Code, is   amended by amending Subsections (b), (d), and (f) 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 $20,000 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].          (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 11.  Subchapter E, Chapter 443, Health and Safety   Code, is amended by adding Section 443.2026 to read as follows:          Sec. 443.2026.  CONSUMABLE HEMP PRODUCT REGISTRATION. (a)     A consumable hemp product may not be offered for sale in this state   unless the manufacturer of the product, before selling the product   to a retailer:                 (1)  submits an application for the consumable hemp   product to be registered with the department; and                (2)  receives approval that the product is compliant   with this chapter, registered, and approved for sale in this state.          (b)  The department shall issue a unique product   registration number to each consumable hemp product approved by the   department.          (c)  A manufacturer applying to register a consumable hemp   product under this section shall pay an application fee to the   department in the amount of $500 for each consumable hemp product.          (d)  The department shall maintain an updated product   registration list on the department's public Internet website,   which must include front and back identifying pictures of each   registered product.          (e)  Each consumable hemp product, including the container   and package, if applicable, must be labeled with:                 (1)  a QR code that links:                      (A)  to the department's product registration   list under Subsection (d); and                      (B)  to the identifying picture of the product   provided on registration of the product with the department under   Subsection (d) for the purpose of confirming registration of the   product and allowing verification of the product by law   enforcement; and                (2)  the following message placed adjacent to the   required QR code on the label: "SCAN QR CODE BEFORE PURCHASE".          (f)  The department may not approve for sale a consumable   hemp product that:                (1)  contains any artificial or synthetic   cannabinoids; or                (2)  contains or is mixed with any alcohol, tobacco,   nicotine, kratom, kava, mushrooms, or a derivative of any of those   items.          (g)  A person commits an offense if the person distributes,   delivers, sells, purchases, possesses, or uses a consumable hemp   product that is not registered with the department as provided by   this section.          (h)  An offense under this section is a Class B misdemeanor.          (i)  A person is presumed to know a consumable hemp product   is prohibited under this chapter if the product is not listed on the   department's Internet website as required by Subsection (d) or does   not have a valid QR code under Subsection (e).          (j)  The executive commissioner shall adopt rules to   implement and administer this section.          SECTION 12.  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 contains any amount of a cannabinoid   other than cannabidiol or cannabigerol; or                (4)  the product's packaging or advertising indicates   that the product is for medical use [has a delta-9   tetrahydrocannabinol concentration of more than 0.3 percent].          SECTION 13.  Section 443.204, Health and Safety Code, is   amended to read as follows:          Sec. 443.204.  RULES RELATED TO SALE OF CONSUMABLE HEMP   PRODUCTS.  Rules adopted by the executive commissioner regulating   the sale of consumable hemp products must to the extent allowable by   federal law reflect the following principles:                (1)  hemp-derived [cannabinoids, including]   cannabidiol and cannabigerol[,] are not considered controlled   substances or adulterants;                (2)  products containing [one or more] hemp-derived   [cannabinoids, such as] cannabidiol or cannabigerol[,] intended   for ingestion are considered foods, not controlled substances or   adulterated products; and                (3)  consumable hemp products must be packaged and   labeled in the manner provided by Section 443.205[; and                [(4)  the processing or manufacturing of a consumable   hemp product for smoking is prohibited].          SECTION 14.  Sections 443.205(a) and (c), Health and Safety   Code, are amended 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 be:                (1)  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 or cannabigerol in   each serving or unit of the product; and                      (G) [(6)]  a certification that there is no   detectable amount of any cannabinoid other than cannabidiol or   cannabigerol in the product; and                (2)  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 [the delta-9 tetrahydrocannabinol concentration of   the product or each hemp-derived ingredient of the product is not   more than 0.3 percent].          (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.]          SECTION 15.  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 an edible 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; or                      (F)  includes an image that resembles a food   product, including candy or juice.          (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 Class A misdemeanor.          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 16.  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 any amount of a cannabinoid other   than cannabidiol or cannabigerol; and                (3)  are packaged and labeled in the manner provided by   this subchapter.          SECTION 17.  Chapter 443, Health and Safety Code, is amended   by adding Subchapters F and G 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 contains any amount of a cannabinoid   other than cannabidiol or cannabigerol.          (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   contains any amount of a cannabinoid other than cannabidiol or   cannabigerol.          (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.  (a)  A person commits an   offense if the person manufactures, distributes, sells, or offers   for sale a consumable hemp product for smoking.          (b)  An offense under this section is a Class B 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 Class B misdemeanor.          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: MANUFACTURING OR SELLING WITHOUT   LICENSE OR REGISTRATION. (a) A person commits an offense if the   person:                (1)  processes hemp or manufactures a consumable hemp   product without a license issued under Subchapter C; or                (2)  sells at retail or offers for sale at retail a   consumable hemp product without registering as a retailer under   Section 443.2025.          (b)  An offense under this section is a felony of the third   degree.   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 $10,000 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.          SECTION 18.  The following provisions of the Health and   Safety Code are repealed:                (1)  Section 443.151(e);                (2)  Section 443.201; and                (3)  Sections 443.202(a) and 443.2025(a) and (c).          SECTION 19.  Not later than December 1, 2025, the executive   commissioner of the Health and Human Services Commission shall   adopt the rules required by Section 443.2026, Health and Safety   Code, as added by this Act.          SECTION 20.  (a)  Except as otherwise provided by Subsection   (b) of this section, 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.          (b)  A person selling consumable hemp products on the   effective date of this Act is not required to register a product   under Section 443.2026, Health and Safety Code, as added by this   Act, before January 1, 2026.          SECTION 21.  This Act takes effect September 1, 2025.