Sale of Consumable Hemp Products (“CHP”) at a premise licensed by the Texas Alcoholic Beverage Commission (“TABC”) requires the appropriate authorization from the Texas Department of Health and Human Services. See, Tex. Health & Safety Code §§ 443.101, 443.2025, and 25 Tex. Admin Code Chapter 300. Retail Hemp Registration Permit costs $5,150 per year, and CHP License is $10,300 per year. Sale of hemp seed derived products, as opposed to THC (tetrahydrocannabinol) and CBD (cannabidiol) infused products, do not require DSHS authorization, see, 25 Tex. Admin. Code § 300.101 (11). (The most common CHP TABC licensed retailer sell are THC seltzers, which would require a DSHS Retail Hemp Registration Permit.)
TABC licensed permittees that engage in the sale of CHPs without the appropriate authorization could be subject to suspension or cancellation of the liquor permit, see, Tex. Alco. Bev. Code § 11.61 (b)(7) , 16 Tex. Admin Code § 34.3 (c)(17) and 25 Tex. Admin. Code § 300.601, and denial of renewal permit, see, Tex. Alco. Bev. Code § 11.46 (a)(8).
Sellers of CHPs at TABC licensed premise are not only prohibited from selling to minors, see 16 Tex. Admin. Code § 35.5, but are also required to check for valid, unexpired governmental identification from each customer, regardless of the age of the customer, see, 16 Tex. Admin Code § 35.6. Each of these violations are separate offenses. A permittee who sells a CHP to a minor without checking ID, would be found liable of committing two offenses.
Although the agency has moved away from seeking the death penalty for the above type of violations, see our prior October 2, 2025 blog post, the penalties are still very severe. Standard penalty for failing to check ID is 30 days for first offense, 14 days for a second offense, 30 days for a third offense, and cancellation for a fourth offense. Standard penalty of selling to a minor 30 days for a first offense, 60 days for a second offense, and cancellation for a third offense. There is no opportunity to pay a civil penalty, which means the suspension has to be served out. (Whether suspension only penalties will run concurrently or consecutively is an open question.)
As of March 31, 2026, sale of smokable CHPs, e.g. buds and flowers containing tetrahydrocannabinolic acid (“THCA”), are illegal in the State of Texas due to a recent DSHS rule change. See, 25 Tex. Admin. Code § 300.101 (45). DSHS now includes THCA in calculating the total delta-9 tetrahydrocannabinol concentration (“Delta-9 THC”) for purposes of determining whether a CHP is lawful to sell. This results in an effective ban because the inclusion of THCA ostensibly raises Delta 9 THC levels over the lawful .3 THC threshold. (Sale of vape pens derived from the cannabis plant, even if it has no THC is still banned. See, Tex. Health & Safety Code § 161.0876 (b)(4)). It is unclear at this point what mechanisms the agency may use to pursue violations. Nonetheless, we suspect that the agency may prefer to pursue sale of non conforming CHPs as a place or manner violation under Tex. Alco. Bev. Code § 11.61 (b)(7) and 25 Tex. Admin. Code § 300.602 (1), as opposed to unlawful sale of narcotics on the licensed premises, see, Tex. Alco. Bev. Code § 104.01 (a)(9) and Tex. Health and Safety Code §§ 481.002 (26), 481.120 – .121. DSHS regulations do not modify the definition of hemp under Tex. Agricultural Code § 121.001 (which relies on Delta 9 THC without consideration of THCA). Consequently, this creates a proof issue on an essential element, i.e. whether the substance in question has a concentration of more than .3 THC to qualify as marijuana under Chapter 481 of the Texas Health and Safety Code.
Potential consequence of selling smokable CHPs could be unlawful sale of narcotics on the licensed premises, see, Tex. Alco. Bev. Code § 104.01 (a)(9) and Tex. Health and Safety Code §§ 481.002 (26), 481.120 – .121 , which carries standard penalty of 25-35 days of suspension for the first offense, and cancellation for the second offense, see, 16 Tex. Admin. Code § 34.2. TABC could also try to pursuing same as a generic place or manner violation, see, Tex. Alco. Bev. Code § 11.61 (b)(7). This is because DSHS rules do not modify the statutory definition
It is worth noting that new federal regulations coming into effect November 12, 2026 may effectively ban majority of CHPs. See, Continuing Appropriations, Agriculture, Legislative Branch, Military Construction and Veterans Affairs, and Extensions Act, 2026 (Pub. L. No. 119-37) (the “Act”). Section 781 of the Act modifies the statutory definition of hemp under 7 USC § 1639o (1), similar to the DSHS rule by including THCA in the calculation of the .3 THC threshold, but also goes a step further by limiting total THC concentration to .4 mg per container. Many THC Seltzers on the market are 5 mg to 10 mg per container.
Permittees, and their agents, servants and employees engaged in the sale of CHPs are strongly encouraged to carefully scrutinize any I.D. presented, i.e. physical unexpired document issued by a state or federal government agency, and consider refusing temporary paper IDs, digital IDs, and vertical IDs. Use of electronic ID scanners, which are already required for some license holders is also strongly encouraged. All it takes is one employee to make a simple mistake of failing to check ID of any customer regardless of age, accepting invalid ID such as an expired license or cell phone photo, or misreading an ID such as vertical ID.
If you are the permittee of a TABC licensed premises currently involved in the sale of CHPs or contemplating doing so in the future, please consider speaking with an experienced alcoholic beverage and cannabis licensing attorney. CHP is a complex and fluid area of law. Getting it wrong could result in serious TABC licensing consequences.
