Texas Hemp Fight Gains Fourth Lawsuit as House Delays Federal Cap

GULF & INTERIOR SOUTH, Sept. 3, 2026: Texas hemp businesses filed a fourth lawsuit against the state's Department of State Health Services on August 27, arguing the agency is enforcing an undefined "trace amount" standard for hemp-derived THC that was never adopted through proper rulemaking. The suit, filed in the 459th Judicial District Court of Travis County on behalf of SS Distro USA LLC, Topps Distro LLC doing business as KingPin Kush, Jason Moreno doing business as My City Hemp, and Trevor Kocaoglan, names DSHS, Interim Commissioner Imelda Garcia and Division Director Glenn Hargett as defendants.

Attorney David Sergi, who also represents plaintiffs in a separate federal case against the state, argued at an August 28 temporary restraining order hearing that DSHS added the "trace amount" language after its July 31 reclassification of delta-8, delta-10, THCP and THCA flower as Schedule I substances without defining what the term means, even though the Texas Supreme Court's May ruling preserved the legality of trace THC amounts under state law. Judge Maya Guerra Gamble had not ruled as of this report; the Texas Attorney General's Office did not appear at the hearing on DSHS's behalf, saying it lacked time to coordinate. A temporary injunction hearing is expected in September.

The new filing is the fourth active piece of Texas hemp litigation, joining a Western District federal case filed August 19 by four retailers alleging DSHS's reclassification cost the industry more than 36,000 jobs, the state-court THBC v. DSHS case now on interlocutory appeal before the Fifteenth Court of Appeals with no oral argument yet scheduled, and a Galveston federal case whose emergency restraining order was denied August 9 and whose injunction request still has no hearing date. DSHS's March 31 total-THC testing rule and licensing fees remain enforceable throughout. State Sen. Charles Perry has said he still intends to refile a hemp ban bill for the 2027 session.

In Washington, the U.S. House voted 370-48 on September 1 to delay the federal hemp restrictions' effective date from November 12 to December 11, sending the measure to President Trump, who is expected to sign it after the White House endorsed the Senate's version in an August 3 policy statement. Kentucky Gov. Andy Beshear addressed the fight ahead of the vote, telling reporters the state needs "a balance" that protects children from products like delta-8 without eliminating the industry outright. "The current [federal policy] would decimate the hemp industry. I do not support it. Give states the ability to fully and fairly regulate it," Beshear said, according to WUKY. Sen. Rand Paul and Rep. Thomas Massie were described as supportive of a compromise approach, though details of any compromise were not reported this week.

Louisiana's hemp beverage industry notched a business milestone even as its regulatory picture held steady: Crescent Canna, the New Orleans maker of Crescent 9 THC Seltzer, debuted at No. 407 on the 2026 Inc. 5000 and says NielsenIQ data now ranks it the top-selling THC beverage brand by both volume and dollar sales in tracked grocery, liquor and convenience channels, with distribution in more than 8,500 locations across roughly 20 states through chains including Rouses Markets, Total Wine & More, Winn-Dixie and Circle K.

Tennessee, Alabama, Mississippi, Arkansas and Oklahoma reported no new hemp beverage legislation, rulemaking or litigation this week. Watch for a ruling on the Travis County restraining order and September's temporary injunction hearing, the President's signature locking in the December 11 date, and whether the compromise Paul and Massie are said to favor takes shape as an actual bill.