Sale of Hemp Derived Products to Minors May Result in Loss of TABC License

Governor Abbott issued Executive Order GA-56, which prohibits retailers holding a Texas Alcoholic Beverage Permit from selling consumable hemp products to persons under the age of 21.  The order also requires that the purchaser’s age be verified by a government issued ID prior to completing the sale.  Sale of consumable hemp product to a minor, and failure to verify age of a purchaser are separate violations, each of which could result in cancellation.  Governor Abbott also directed TABC to promulgate rules which implement the Executive Order.

Governor Abbott’s Executive Order is intended to regulate hemp derived food and beverages sold at TABC licensed retailers.  The Executive Order does not allow sale of consumable hemp products containing more than .3% delta-9 tetrahydrocannabinol concentration (“Delta-9 THC”) by dry weight.  Nor does it change new law which banned the sale of THC vape pens.   See, Tex. Health & Safety Code § 161.0876 (b)(4). 

Any food or beverage product derived from a hemp, regardless whether it has any detectable amount of THC, is subject to the order.  See, i.e.  Tex. Health & Safety Code § 443.001 (1) and 431.002 (16), which defines consumable hemp product.

While the Executive Order does not qualify what satisfies the government issued ID requirement, or whether safe harbor applies, parallel legislation prohibiting sales to minors and ID verification requirements, provides some potential insight how TABC rules regulating consumable hemp product sales could look like, see Tex. Alco. Bev. Code § 106.03 (b) and Deshawn Jagwan Act.

Tex. Alco. Bev. Code § 106.03 (b) states in relevant part (emphasis added) –

A person who sells a minor an alcoholic beverage does not commit an offense if the minor falsely represents himself to be 21 years old or older by displaying an apparently valid proof of identification that contains a physical description and photograph consistent with the minor’s appearance, purports to establish that the minor is 21 years of age or older, and was issued by a governmental agency. The proof of identification may include a driver’s license or identification card issued by the Department of Public Safety, a passport, or a military identification card.

The above statute requires that the identification must be unexpired, and appears to have been issued by a governmental agency.  Cell phone pictures of a physical ID do not qualify.

The Deshawn Jagwan Act imposes additional burdens on off-premise consumption retailers such as liquor stores, convenience stores, gas stations, but some on-premise retailers which are allowed to sell wine and malt beverage products to go.  Please see our prior blog post regarding same for more details.  This includes mandatory use of electronic ID scanners, even if the purchaser appears to be 21 years of age or older.

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