Attorney Blog, Human Resources

Bill to Legalize Hemp Passed in Texas

Attorney Harrison Oldham

On Monday, June 10, 2019, Governor Greg Abbott signed a new law that officially separates marijuana and cannabidiol, or CBD products, in the State of Texas. While CBD products have been available in Texas for some time, those products that contained even trace amounts of THC were technically illegal. Now, as long as a CBD product contains less than .3 percent THC, and meet labeling and quality standards, they will be legal in Texas. The law went into effect immediately.

The Lone Star States’ move to legalize hemp followed the federal government’s decision to remove hemp from its list of controlled substances. Texas made the same move in April of 2019 by removing hemp from its list of “Schedule I” drugs, which includes substances such as LSD, heroin, and cocaine.  Unfortunately, removing hemp from the list of Schedule I drugs did not clear up questions surrounding its legality; the removal did not legalize hemp.

To add to the confusion, many people do not realize that marijuana and hemp are two different varieties of the cannabis plan.  Pure CBD oil derived from hemp contains only trace amounts of THC. Hemp is grown from specific cannabis varieties that naturally possess higher levels of CBD, but until last week, state law still defined hemp and marijuana as the same substance and outlawed the possession or growth of either variety of plant.

With the passage of this new legislation, farmers in Texas will also be able to grow hemp as an industrial crop, and have procedures for sampling, inspecting, and testing the resulting products. Should Texas farmers follow in the footsteps of farmers in other states, then the recently de-regulated hemp crop is set for massive growth.

In general, hemp production has recently skyrocketed across the United States. Earlier this year it was reported that the largest hemp producing state is Montana, with 22,000 acres licensed to grow the crop. Montana is followed closely by Colorado, with just over 21,000.

However, several other states are jumping into this potential new cash crop. For instance, Oregon established a hemp program in 2014 after the federal government passed the 2014 Farm Bill. At the time, Oregon had recorded 13 growers utilizing 105 acres. In 2015, just one year later, Oregon recorded 1,342 grower and 46,219 acres of hemp.  Similarly, in 2018, the State of Washington was growing 140 acres of hemp product purely on Tribal lands. However, after expanding the program, as of this year, the farmers in the state have already signed up to plant more than 6,000 acres of hemp.

With the passage of the new legislation, Agriculture Commission Sid Miller said that “Texas will be a leader in hemp production.” Only time will tell is he is correct, but the passage of this bill puts the Lone Star State on the right track.

However, one question that is presently unclear is how this new legalization will impact Texas employers. As stated above, the 2018 Farm Bill removed hemp-derived products from its Schedule I status. In the bill, “hemp” is defined as the plant Cannabis sativa L. and any part of that plant, with a THC concentration of not more than 0.3 percent. The characteristic of having low THC is the key difference to distinguish industrial hemp from marijuana. CBD derived from THC-containing marijuana (more than .3%) is still unlawful according to federal law.

Now that certain CBD products are legal in Texas, it is unclear how exactly CBD use will impact the workplace. Prior to the Farm Bill, employers could terminate employees for positive drug screens based on CBD’s classification under federal law, and most drug test panels test for THC, not CBD. However, CBD products may contain levels of THC that lead to a positive drug test, making it difficult to determine if a positive drug screen is the result lawful CBD use or if it is CBD use in tandem with marijuana usage. Given the many uncertainties with drug testing, employers should take care when addressing issues related to CBD. In addition, employers enforcing zero-tolerance drug policies should be prepared for future challenges to such policies.

About Harrison Oldham

Harrison grew up in Mansfield, Texas. He attended Texas A&M University for his bachelor’s degree, where he met his wonderful wife, Kelsey. After graduating magna cum laude from Texas A&M, he attended SMU Dedman School of Law, graduating with honors in 2012. Today, Harrison and his wife live in Dallas, Texas with their son, Teddy.

Since graduating from SMU Law, Harrison has worked exclusively in the field of business law. He has spent time in private practice and in-house, working with clients of every size; from single person startups to Fortune 250 companies. Today his practice focuses on serving the diverse needs of businesses and individuals throughout Texas.

You can learn more about him by visiting his website, at: http://lonestarbusinesslaw.com/.

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