By: Cain H.B. No. 5643       A BILL TO BE ENTITLED   AN ACT   relating to the production, sale, distribution, delivery, and   regulation of hemp; creating a criminal offense; imposing a tax.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 443.001, Health and Safety Code, is   amended by adding Subsections (12) and (13) to read as follows:          (12)  "Hemp plant material" has the meaning assigned by   Section 121.001, Agriculture Code, and any stalks, stems, flowers,   or parts of hemp that does not exceed 0.3 percent delta-9   tetrahydrocannabinol by dry weight at the time of harvest, as   demonstrated by a certificate of analysis issued within the   previous twelve months by an independent testing laboratory.          (13)  "Independent Testing Laboratory" means a laboratory   that:                (a)  holds an ISO 17025 accreditation or is registered   with the federal Drug Enforcement Administration in accordance with   21 C.F.R. Section 1301.13;                (b)  does not have a direct or indirect interest in the   entity whose product is being tested; and                (c)  does not have a direct or indirect interest in a   facility that cultivates, processes, distributes, dispenses, or   sells consumable hemp products in this state or any other   jurisdiction.          SECTION 2.  Subchapter A, Chapter 443, Health and Safety   Code, is amended by adding Sections 443.005 and 443.006 to read as   follows:          Sec. 443.005.  CONSUMABLE HEMP PRODUCTS ACCOUNT. (a) The   consumable hemp products account is an account in the general   revenue fund administered by the department.          (b)  The account consists of:                (1)  appropriations of money to the account by the   legislature;                (2)  public or private gifts, grants, or donations,   including federal funds, received for the account;                (3)  fees collected under this chapter or under Chapter   431 as it applies to consumable hemp products;                (4)  interest and income earned on the investment of   money in the account;                (5)  penalties for violations of this chapter as it   applies to consumable hemp products; and                (6)  funds from any other source deposited in the   account; and                (7)  funds from the excise tax described in Section   443.006 of this Section at a rate of five percent on hemp consumable   products.          (c)  The department may accept appropriations and gifts,   grants, or donations from any source to administer and enforce this   chapter as it applies to consumable hemp products. Money received   under this subsection shall be deposited in the account.          (d)  Money in the account may be appropriated to the   department for the administration and enforcement of this chapter   as it applies to consumable hemp products and for juvenile mental   health programs, drug abuse prevention education, and for funding   of the Dementia Prevention Research Institute of Texas.          Section. 443.006.  TAX IMPOSED ON CONSUMABLE HEMP PRODUCTS.   An excise tax at the rate of five percent shall be imposed on the   retail sale of a consumable hemp product. The tax is in addition to   any tax imposed under any other provision of federal, state, or   local law.          SECTION 3.  Section 443.103, Health and Safety Code, is   amended to read as follows:          Sec. 443.103.  APPLICATION; ISSUANCE. An individual or   establishment may apply for a license under this subchapter by   submitting an application to the department on a form and in the   manner prescribed by the department. The application [must be   accompanied by] shall include:                (1)  the physical address [a legal description] of each   location where the applicant intends to process hemp or manufacture   consumable hemp products [and the global positioning system   coordinates for the perimeter of each location];                (2)  written consent from the applicant or the property   owner if the applicant 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 the [all] premises   during normal business hours [where hemp is processed or consumable   hemp products are manufactured] to conduct a physical inspection or   to ensure compliance with this chapter and rules adopted under this   chapter;                (3)  any reasonable fees to cover the cost of the   processing of the application; [required by the department to be   submitted with the application;] and                (4)  any other relevant information required by   department rule.          SECTION 4.  Subchapter C, Chapter 443, Health and Safety   Code, is amended by adding Section 443.106 to read as follows:          Sec. 443.106.  EXPEDITED LICENSING PROCESS. The department   by rule may provide an expedited licensing process for the renewal   of a license in good standing or the purchaser of a business by a   qualifying party of a currently licensed business.          SECTION 5.  Section 443.151, Health and Safety Code, is   repealed and replaced in its entirety as follows:          Sec. 443.151.  TESTING REQUIRED. (a) To ensure consumer   safety, consumable hemp must be tested as provided by this section.          (b)  Before a consumable hemp product may be distributed or   sold as a final product, including hemp plant material, a sample   representing the final product must be tested, as required by the   executive commissioner, to determine:                (1)  the concentration of various cannabinoids,   including delta-9 tetrahydrocannabinol;                (2)  the presence or quantity of heavy metals,   pesticides, microbial contaminants, mycotoxins, harmful   microorganisms and pathogens, and residual solvents;                (3)  the presence of any synthetic cannabinoids meaning   a substance included in Penalty Group 2-A under Section 481.1031 of   the Health and Safety Code; and any other substance prescribed by   the department.          (c)  All cannabinoid testing required under this Chapter   must be performed by a laboratory 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 delta-9 tetrahydrocannabinol   concentration of the product.          SECTION 6.  Section 443.152, Health and Safety Code, is   amended by adding Subsection (d) to read as follows:          (d)  The executive commissioner by rule may exclude a   substance from the testing required under Section 443.151 that is   generally recognized as having no risk of contaminating a finished   consumable hemp product, including a microorganism or other   substance that is inevitably destroyed or removed while processing   or manufacturing the product.          SECTION 7.  Section 443.201, Health and Safety Code, is   amended by adding Subsections (c), (d), and (e) to read as follows:          (c)  A person may transport and deliver a consumable hemp   product in compliance with this chapter to a lawful purchaser of the   product. A person may also transport or deliver raw hemp extract   intended to be remediated into a final form product. The person   transporting the consumable hemp product or raw hemp extract shall   maintain documentation during transport to demonstrate the   transaction complies with this chapter. The person transporting   and the consumable hemp product is not required to:                (1)  obtain a license under Section 443.101, unless the   person processes or manufactures the product delivered; or                (2)  register under Section 443.2025, unless the person   sells the product delivered.          (d)  A person may not manufacture or sell a non-compliant   consumable hemp product in this state.          (e)  To the extent this Section conflicts with Chapter 481,   the Texas Controlled Substances Act, Chapter 481 shall prevail.          SECTION 8.  Section 443.2025, Health and Safety Code, is   amended by amending Subsections (b), (d), and (f) and adding   Subsection (d-1) to read as follows:          (b)  A person that sells [may not sell] or distributes   consumable hemp products [containing cannabidiol at retail] in this   state, other than products generally recognized as safe by the   United States Food and Drug Administration, shall register with the   department [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 to consumers [at retail].          (d-1)  unless such employee or independent contractor works   for a person located outside of the state who is not a registrant   and sells or distributes products covered by Subsection (b) in this   state.          (f)  The registration shall [department by rule may adopt a   registration fee schedule that establishes reasonable fee amounts   for the registration of]:                (1)  identify the responsible party to direct   correspondence [a single location at which consumable hemp products   [containing cannabidiol are sold]; and                (2)  be subject to a nominally reasonable fee [multiple   locations at which consumable hemp products [containing   cannabidiol] are sold under a single registration].          SECTION 9.  Section 443.204, Health and Safety Code, is   amended by adding Subsection (b) to read as follows:          Sec. 443.204.  RULES RELATED TO SALE OF CONSUMABLE HEMP   PRODUCTS. (a) Rules adopted by the executive commissioner   regulating the sale of consumable hemp products must, to the extent   allowable by law, reflect the following principles:                (1)  hemp-derived cannabinoids, including cannabidiol   and raw hemp extract intended to be remediated into a finished good,   are not considered controlled substances or adulterants;                (2)  products containing one or more hemp-derived   cannabinoids, such as cannabidiol, 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.          (b)  Not later than the 90th day after a change to this   chapter takes effect, the department shall adopt rules to resolve   any conflicts arising from the change. Until such rules are   adopted, the department shall enforce the provisions of this   chapter to the fullest extent possible without exceeding its   authority or conflicting with federal law or other controlling   legal requirements.          SECTION 10.  Section 443.205, Health and Safety Code, is   amended to read as follows:          SEC. 443.205  CONSUMER SAFETY [PACKAGING AND LABELING]   REQUIREMENTS. (a) before a finished [Before a] consumable hemp   product, including hemp plant material, may be distributed or sold,   it [that contains or is marketed as containing more than trace   amounts of cannabinoids may be distributed or sold, the product]   must be labeled in the manner provided under this section and with   the following information:                (1)  a statement of identify or product name.labeled   in the manner provided by this subchapter, including [section with]   the following information:                (2) [(1)]  batch or lot identification number;                (3) [(2)]  Net contents [batch date];                (4) [(3)]  ingredients contained in the product,   including hemp-derived cannabinoids [product name];                (5) [(4)]  major food allergens as identified by the   U.S. Food, Drug, and Cosmetic Act [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];                (6) [(5)]  the name of the product's manufacturer;[and]                (7) [(6)]  a [certification]certificate of analysis   that the delta-9 tetrahydrocannabinol concentration of the product   [or], each hemp-derived ingredient of the product, or the hemp   plant material, is not more than 0.3 percent by dry weight; and                (8)  contact information of the manufacturer or   licensed party.                (9)  Packaged in a container that is:                      (a)  tamper evident; and                      (b)  child resistant          (b)  The label required by Subsection (a) may be in the form   of:                (1)  a uniform resource locator (URL) [for the   manufacturer's Internet website] that provides or links to a   certificate of analysis for the product [the information required   by that subsection]; and                (2)  a QR code or other bar code that may be scanned and   that leads to the information required by that subsection.          (c)  The label required by Subsection (a) must appear on each   unit of the product intended for individual retail sale. If the   unit includes inner and outer packaging, the label may appear on any   of that packaging.          (d)  This section does not apply to sterilized seeds   incapable of beginning germination.          (e)  Before a consumable hemp product may be sold to a   consumer, the product must be either prepackaged or placed at the   time of sale in packaging or a container that is tamper-evident and   child resistant. If the product contains multiple servings or   consists of multiple products purchased in one transaction, the   package or container must be resealable in a manner that allows the   child-resistant mechanism to remain intact.          SECTION 11.  Subchapter E, Chapter 443, Health and Safety   Code, is amended by adding Sections 443.2055, 443.2056, 443.208,   443.209, 443.210, and 443.211 to read as follows:          Sec. 443.2055.  CONSUMABLE HEMP PRODUCT AND PACKAGING   ATTRACTIVE TO MINORS. (a) Edible consumable hemp products that   contain or are marketed as containing hemp-derived cannabinoids may   not be in the shape of a human, animal, fruit, or toy or in another   shape known to be marketed to minors.          (b)  Packaging of a consumable hemp product may not include:                (1)  cartoons, being any drawing or depiction of an   object, person, animal, creature or any similar caricature that   uses comically-exaggerated features; and                (2)  attributes human characteristics to animals,   plants, toys or other objects; or                (3)  attributes unnatural or extra-human abilities,   such as imperviousness to pain or injury, X-ray vision, tunneling   at very high speeds, or human transformation (i.e.) superheroes; or                (4)  images of children.          Sec. 443.2056.  MISLEADING PACKAGING PROHIBITED. (a) The   packaging and labeling of consumable hemp products that contain or   are marketed as containing hemp-derived cannabinoids shall not:                (1)  depict any statement, artwork, or design that   falsely suggests the product does not contain hemp-derived   cannabinoids;                (2)  closely resemble a copyrighted, trademarked, or   widely recognized non-hemp product in a way that could cause   confusion.          Sec. 443.208.  SALE OF CONSUMABLE HEMP PRODUCTS TO PERSONS   YOUNGER THAN 21 YEARS OF AGE PROHIBITED; 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 an individual   under 21 years of age.          (b)  An employee of an establishment that sells a consumable   hemp product in violation of Subsection (a), is individually liable   and may be prosecuted for the offense, regardless of whether the   owner or operator of the establishment is also held liable. This   section does not preclude prosecution of the owner or operator of   the establishment if the violation occurred with their knowledge or   due to their failure to exercise reasonable supervision and control   over employees.          (c)  An offense under this section is a Class C 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)  It is an exception to the application of Subsection (a)   that the person to whom the consumable hemp product was sold is at   least 18 years of age and presented at the time of purchase a valid   military identification card of the United States military forces   or the state military forces.          (g)  A person who owns, manages, or operates an Internet   website that contains an e-commerce platform on which consumable   hemp products, including hemp plant material, that contain or are   marketed as containing hemp-derived cannabinoids are sold at retail   or offered for retail sale must:                (1)  require a consumer accessing the e-commerce   platform to state affirmatively that the person is at least 21 years   of age; and                (2)  verify a consumer's age prior to completing a   purchase on the e-commerce platform by:                      (A)  using a reliable online age verification   service; or                      (B)  obtaining and examining a copy of a valid   government-issued identification.          Sec. 443.209.  SALE OF CERTAIN CONSUMABLE HEMP PRODUCTS TO   PERSONS YOUNGER THAN 21 YEARS OF AGE. (a) The department by rule   shall adopt a list of hemp-derived cannabinoids that are exempt   from the requirements of Sections 443.205(a)(9), 443.205(e),   443.2055, and 443.208.          (b)  The list adopted under Subsection (a):                (1)  must include cannabidiol and cannabigerol; and                (2)  may include cannabinoid quantity thresholds.          (c)  Notwithstanding Subsection (a), Sections   443.205(a)(9), 443.2055, and 443.208 apply to any consumable hemp   product that contains:                (1)  a hemp-derived cannabinoid not included on the   list adopted under Subsection (a); or                (2)  a quantity of a hemp-derived cannabinoid that   exceeds any applicable threshold established under Subsection   (b)(2).          Sec. 443.210.  APPLICABILITY OF PENALTIES TO CERTAIN   RETAILERS. Notwithstanding another provision of this subchapter, a   retailer of consumable hemp products is not liable for a penalty   under this subchapter if the retailer proves by a preponderance of   the evidence that the violation was unintentional and due to the   retailer's good faith reliance on a representation made by a   manufacturer, processor, or distributor of consumable hemp   products.          Sec. 443.211.  Notwithstanding any other law, a retailer may   possess, transport, or sell a consumable hemp product that becomes   part of the retailer's inventory before rules required to implement   the changes in law made by this Act become effective unless the   product:                (1)  is unsafe for consumption based on the presence or   quantity of heavy metals, pesticides, harmful microorganisms, or   residual solvents; or                (2)  has a delta-9 tetrahydrocannabinol concentration   that exceeds 0.3% delta-9 tetrahydrocannabinol by dry weight.          SECTION 12.  Subchapter C, Chapter 122, Agriculture Code,   Section 122.102 is amended by adding Subsection(c) to read as   follows:          (c)  Except as provided by subdivision (d) and   notwithstanding any other law, The department may not issue a   license under this subchapter to produce hemp on real property   owned by any of the following:                (1)  a governmental entity of China, Iran, North Korea,   or Russia;                (2)  a company or other entity that is:                      (A)  headquartered in China, Iran, North Korea, or   Russia;                      (B)  directly or indirectly under the control of   the government of China, Iran, North Korea, or Russia; or                      (C)  owned by or under the control of one or more   individuals who are citizens of China, Iran, North Korea, or   Russia;                (3)  a company or other entity that is owned by or under   the control of a company or entity described by Subdivision (2); or                (4)  an individual who is a citizen of China, Iran,   North Korea, or Russia.          (d)  This subsection does not apply to an individual who is a   citizen or lawful permanent resident of the United States,   including an individual who is a citizen of a foreign country.          SECTION 13.  This Act takes effect immediately if it   receives a vote of two-thirds of all the members elected to each   house, as provided by Section 39, Article III, Texas Constitution.   If this Act does not receive the vote necessary for immediate   effect, this Act takes effect September 1, 2025