Four Texas hemp retailers sued the state in federal court, alleging the THC ban cost the industry more than 36,000 jobs and shields the state's medical marijuana program from competition, as two earlier cases over the ban remain unresolved.
GULF & INTERIOR SOUTH, Aug. 27, 2026: Four Texas hemp retailers filed a new federal lawsuit August 19 against the Texas Department of State Health Services, arguing the agency's reclassification of hemp-derived THC products as illegal amounts to unconstitutional executive overreach and has already cost the industry more than 36,000 jobs.
The suit, filed in the U.S. District Court for the Western District of Texas with David Sergi as lead counsel, claims retail sales have dropped by more than half and billions of dollars in revenue have been lost since DSHS's enforcement action, leaving inventory stranded statewide. It also alleges DSHS's approach unlawfully protects the state-licensed Texas Compassionate Use Program from competition by shutting down the broader hemp market around it. The plaintiffs are seeking a temporary restraining order and a preliminary injunction; no ruling had been issued as of this report.
The new case is separate from two others already pending against the state. THBC v. DSHS, now before the Fifteenth Court of Appeals on interlocutory appeal, has seen no update since the Texas Hemp Business Council said in an August 7-8 status posting that it planned to file its response brief August 14; there is still no independent confirmation that filing occurred, and no reply brief or ruling has surfaced. A separate federal case filed in Galveston earlier in August, over the state's July 31 Schedule I reclassification of delta-8 and similar products, also remains without a scheduled hearing on its preliminary-injunction request. DSHS's March 31 rules, including a total-THC testing standard and increased licensing fees, remain enforceable throughout.
Elsewhere in the region, Kentucky's hemp industry is waiting on the U.S. House to return from recess August 31 before Sen. Rand Paul's push to let states opt out of the incoming federal cannabinoid cap can advance further. Louisiana, Tennessee, Alabama, Mississippi, Arkansas and Oklahoma produced no new hemp-beverage legislation, rulemaking, enforcement action or confirmed company news this week.
Watch for whether the new Western District case draws an early ruling on the restraining order request, whether the Fifteenth Court of Appeals docket confirms THBC's brief was filed, and whether Sen. Charles Perry's promised 2027 consumable-hemp ban bill is formally filed.
Forma works embedded on hemp and THC beverage formulation and commercial scale-up, from compliant dosing and label claims through co-packer qualification. This wire is a byproduct of the same regulatory tracking that informs that work.
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