Could Sen. Ted Cruz Save Texas Hemp?

Today on CityCast Austin, when lawmakers made a deal to reopen the federal government, they set off a one-year-long ticking time bomb for the Texas hemp industry, and I'm here with a guest to find out if it can be stopped. It's Tuesday, November 18th. I'm Eva Ruth Moravec in for Nikki Devon, and this is what Austin's talking about. Hello, I'm here today with Heather Fasio, the director of the Texas Cannabis Policy Center. Welcome back, Heather. Thank you so much. Glad to be with you again. So we're right on the heels of a new deal over the federal government shutdown. They are now all back to work, and this deal came with a little bit of a surprise for those in the consumable hemp industry. So bring us up to speed. Well, while there certainly is a lot of relief that Congress is back and getting done what most of the American people expect from them, unfortunately, there was a very sneaky provision that was this slid right into this really big budget bill that prohibits hemp as we know it and effectively shuts down the industry with a clock ticking for a one-year headway time. And we are... Disappointed to see this happen. It was a long, hard-fought year in Texas at the state level with prohibitionists trying to shut down the hemp industry. And now we've seen that happen at the federal level. And so while there certainly is a big red flag and alarm throughout the industry and advocacy networks, we have one year to convince Congress to roll this back that instead of prohibiting these products, we should be regulating them for responsible adult use. We all know there are better ways to regulate this stuff, keeping it away from kids with age restrictions and marketing standards, just like what we do. saw Governor Greg Abbott do with his executive order. But instead, Congress is taking a different approach, and we hope that we're going to be able to roll that back before it gets implemented one year from now. So, yeah, definitely glad that things are back to normal somewhat. But, I mean, was this a surprise for y'all? Like, I mean, I know that we had in Texas, basically all of our lawmakers voted the way that would be expected of their party, right? We had Senators John Cornyn and Ted Cruz were both supportive of the deal. We had our Democrats, Greg Kassar and Lloyd Doggett in the Congress opposing it. What had y'all heard from lawmakers before this and was it a surprise to y'all?

Well, we knew this was happening behind the scenes and that there had been a lot of work going on to really rein in the hemp industry. But it was a surprise to see it snuck in at the last minute into this huge funding bill. And one thing that's important to note is that in the Senate, there was an effort to amend it to pull out that hemp provision. It was led by Senator Rand Paul, Republican from Kentucky, the son of former Texas Congress. Congressman Ron Paul, and he made really great arguments for why that provision really shouldn't move forward, the jobs that were going to be impacted, the impact of recriminalization. And surprisingly, well, maybe surprisingly, Ted Cruz, our senator here. supported Rand Paul's amendment and effort to pull that provision. Yes. And so, you know, over the years, Ted Cruz has been consistent in saying that this should be a state's rights issue. We shouldn't be prohibiting it at the federal level. Let's let each state be the laboratory of democracy that it was intended to be in this country. And he was consistent with that principle in his vote. And that was really nice to see, even though it wasn't enough to pull the provision. Wow. So, you know, again, it wasn't an entire surprise that there were efforts underway. But the fact that it was included in this bill was a surprise. And the industry and advocacy networks had to mobilize to get calls and emails into the U.S. Capitol. That's really interesting about Ted Cruz. I guess it kind of speaks to his like libertarian mindset sometimes of like having the federal government be smaller. But and then he ultimately, I guess, voted for the deal that was presented, you know, even without that change. But I'm curious about where the push came from, where like what were people saying about why this should be part of the shutdown? I don't know that there were specific reasons on why it should be included in this particular bill. I think that it was it was a kind of an opportunity that happened and Mitch McConnell decided to go ahead and get it done while he could. And so, you know, it's disappointing. no doubt about it, but we know that we have work to do. Lawmakers do not fully understand the impact that this kind of policy change is going to make. Otherwise, certainly they wouldn't have voted how they did. Not only is this going to have a devastating impact on the industry and the entrepreneurs who have invested so much into operating legitimate businesses that are providing safe and legal products to consumers who are using them responsibly. That is what we see. happening across the country. Of course, there are bad actors in every industry, and the only way to drive them out and hold them accountable is through effective regulation. And that's the approach that we should be taking. Another devastating impact is going to be to our criminal justice system and the lives that are going to be derailed by recriminalizing these products. When we started doing this work,

10 years ago, we were arresting between 60 and 70,000 people every year in Texas. After hemp was legalized, those numbers have dropped dramatically. That is in part because local governments don't want to be enforcing these policies. It's a waste of criminal justice resources. And they don't want to derail the lives of people who are using these products responsibly. Yeah, it seems like they also have the jurisdiction locally to make those decisions. Like in Austin, we saw, you know, there was a de-emphasis on, you know, making those kinds of arrests, too. So it seems like the lower you get, I mean, the more, you know, independence to make those decisions we were supposed to be having, it seemed. Yeah, that's right. And Texas is on track to regulate these products. You know, we saw the prohibition bill vetoed by Governor Greg Abbott. He issued an executive order. And thankfully, making some decisive action to put in some better regulations and actually enforce the regulations that are on the books. So we were headed down this path. And I certainly hope that we continue down that path in spite of what the federal government does. Because we have 40 medical cannabis. states that defy federal law, including Texas. There are 24 states that defy federal law for recreational or adult use of cannabis. And we are able to establish these programs and regulated effectively within the state. That would shut down interstate commerce. But if we wanted to, we could move forward with regulating these products in a way that's right for Texas.

I think one thing I'd love to get into is like you hear a lot about the loophole that this was intended to close. And was it, how long ago did Congress, you know, change legality around hemp? And I also want to be clear about like hemp is not the same as marijuana and that those two substances are, you know, governed differently and are classified differently. Is that right? Exactly right. In 2018, Congress passed the Farm Bill that descheduled all cannabinoids except for THC Delta 9, which is a particular kind of THC. All other molecules, though, are allowable. And so that's what created a very clear delineation between hemp, which is under 0.3% THC delta 9. And everything above that, is classified as marijuana. Now, I don't think that that is a reasonable way to distinguish. It really probably should have been consumable and non-consumable cannabis. But this is the path that they took. And when you create law that is so specific to certain molecules, the industry is going to walk that line of legality. Right. And that's exactly what they've done. You know, it's been said that the federal farm bill of 2018 and subsequent state policy in 2019 did not create a loophole. It created a marketplace. It created a clear path for what is legal and what is not legal at the federal level. And that's where businesses have been operating for six years in Texas, legitimately, with a lot of good people providing high quality product. Right. So by being so specific about that 0.3% and what the compound was, it meant, okay, well, anything that's not that is legal or there could be an argument for it being legal and that business just exploded. And I mean, we heard a lot about this quote unquote loophole also in the recent. state legislative session where I know you were very, very active in this, there was supposed to be a total ban on all consumable hemp products in Texas and it didn't get through the first time. There were special sessions. Eventually, the result was Greg Abbott came out with this order, executive order, limiting age and also. In a different bill, we ended up with no more disposable vapes, which was another way that people were purchasing these products. So I have a question for you about that because the state push was very much on Texas Lieutenant Governor Dan Patrick's mind, right? We heard he threw. bags of items to the press in a meeting. I mean, there was like, he was almost theatrical. He was going to these places and recording himself, you know, seeing what he could get away with. And I'm curious if he was involved in this federal push and how, because he praised it as soon as it happened. We know that Dan Patrick also has the ear of President Donald Trump. So what do you think was going on behind the scenes with him?

Well, no doubt that Lieutenant Governor Dan Patrick led a very adamant. fear campaign for a year in advance of the last legislative session, using fear and misinformation and coercion, really, to get the legislation passed that he wanted. Ultimately, Governor Greg Abbott vetoed the prohibition bill, thankfully. And so while I haven't seen a direct tie to what's going on between him and the federal government, I have no doubt that he has been involved to some degree. And he's getting what he wanted. at the federal level. So we'll see how this continues to play out. And if ultimately THC products are taken off the shelves in Texas, we'll know in a year from now, maybe sooner if our policy through rulemaking clearly establishes a legal pathway for THC exceeding. the legal definitions. But there's still a lot of question marks on how is this going to be enforced? And what is the legislature going to do in 2007 as a result of these federal changes? Yeah. The timing is a little suspicious. So specifically, going back to the 0.3%, what does this new ban? prohibit. How does that change, you know, what was legal before and after? So as we discussed, the line distinguishing between hemp and marijuana is relating to a single molecule. It's a tetrahedricanabinol, THC, Delta 9. And as you and some of the audience may have heard of Delta 8, Delta 10, THCAA, these are alternative THC molecules that technically are not restricted in the same way the Delta 9 THC is regulated and controlled. The change that's happening here is that they are going to lump all THC together. So they're talking about a 0.3% total THC limit, and that's a significant departure from what we have been living with for the last six years. And so in addition to changing that to a total THC standard, they also put in place a THC total per package, restricting it to 0.4 milligrams of... of THC, total THC per package. This is unreasonably low. In fact, it's arguable about whether or not even full spectrum CBD products that don't cause impairment could actually reach that threshold or fall into a legal category. So they're effectively banning these products.

by creating such restrictive standards for the industry to operate under. And, you know, what does this mean, though? What does it mean for consumers in Texas? It means that the veterans who have been advocating for using these products to help them off of pharmaceutical drugs are going to be turning to the black market. It means that people who otherwise don't want to participate in the Compassion of Use program. And just in case you don't know what that means, that's the state's medical marijuana program. Right. It's restrictive. It's expensive. gun rights are in jeopardy, child custody is in jeopardy, all of these things that we still need to fix in our program, all of people that don't qualify are now going to be criminalized and sent to the illicit market where there most certainly is no, there are no standards for safety, no age restrictions, there's no accountability. We are not safer under prohibition. The only way to ensure accountability, public health, public safety is through effective regulation. Right. And I remember in the discussion over the session, the fiscal note that was attached to the prohibition bill was really, really big in that the state of Texas was going to be losing like hundreds of millions of dollars in sales tax revenue if these stores were all shut down, if these products could no longer be sold. And it does seem like... You know, the one thing that I've seen a ton of growth in is the beverage industry, the THC seltzers, the I don't even know what specific compound they are, but I know that they are not alcoholic and they are made from some sort of hemp somewhere. So, I mean, tell me about like how that. business has kind of grown in Texas and what we're expecting, I mean, if this does stand in a year, how could that financial burden hit us as well? Flower is still the primarily preferred product from consumers. Most people just enjoy the natural flour as it grows out of the earth, nothing that's processed. But there is a significant and growing, to your point, market share for those who want to use beverages or edibles, you know, lots of people's moms are using gummies to get to sleep at night. You know, these products have become very popular amongst people who don't. fit the typical stereotype of those who use cannabis? They're not stoners. They're not hippies. They're not, yeah, dazed and confused or cheech and chonging it up. Right. That's exactly right. And so these products would mostly be... off the shelves, and people would be turning back to sleeping pills, turning back to alcohol, perhaps. Although alcohol sales have been plummeting for years, and now people are seeing very clearly that consumers are choosing THC products over alcohol. And there's a big split in the alcohol industry, and this is actually a very interesting component of all of this, is that we have seen alcohol associations lobbying to prohibit THC products.

Meanwhile, though, other organizations within the alcohol industry say, hey, what's the big deal? We want to be able to sell these. If consumers want them and there are quality products on the market, we want to be able to sell them. So there's a division within the alcohol industry, but they've definitely been very vocal at the state and the federal level. In the meantime, you know, we do have this executive order from Governor Greg Abbott. There are certain things that are already kind of in the process of being banned or are now banned as a result of that in Texas. With this federal ban kind of, you know, it's existing now, but we have a year until it's implemented. What are businesses... Thinking, like, how are they able? I mean, I know that they've had just had so many ups and downs in the past couple of years about what they can do and not do and being rated and these different regulations. So what's your advice to them for this next year while everything is just a mess? Indeed, a mess. That is the best way to describe all of this. And I just, I really feel for all of these businesses, these entrepreneurs who have been operating legitimately and this year has been so hard for them all year long at the state level, the ups and the downs, not knowing whether or not you're going to be able to do business in six months from now, you're going to have to find a new livelihood way to feed your family if your business gets shut down. And now. We thought we had, well, we did win that at the state level. And now here to see this come at the federal level, it's just devastating for so many of these good people who have been operating. And it's hard to know exactly what to tell them other than we need to unify and fight back on this. We need to make sure that every single lawmaker is held to account for their vote on this. There's an election coming. And we have to make sure that we are pressuring all of these people. so that they fully understand the ramifications of their decisions. You know, we need to get better organized as an industry. We need to have political action committees raising and spending money in elections. This is how every industry operates, and hemp and cannabis should be no different. This is how politics works in America. You raise money, you help to support your friends and allies, and you work toward effective policy. And, you know, what we want to see, of course, is accountability. We want to be safe and we want to be free. And that shouldn't be too much to ask in the United States of America. And is the fight for you, for y'all, you know, as an industry overall, more on the federal level right now or state or is it both?

It's definitely both. You know, we're in the middle of the rulemaking process through the Department of State Health Services. They're the folks that primarily regulate consumable hemp products. Now, that's going to be changing because as a part of this rulemaking process, there's going to be what they call a memorandum of understanding, an MOU between DHS and TABC, the Texas Alcoholic Beverage Commission, handing off the responsibilities of enforcement. to this different agency. And, you know, there are definitely good arguments to make for why we shouldn't be doing it through alcohol. Alcohol is very different than cannabis. But they do already regulate an age-restricted product. They have boots on the ground. They do inspections. So they have the tools in place to regulate this product. And I think that that ship has sailed, and that is what's going to happen here. And so we're in the process of doing this at the state level. have to make sure that we're building relationships with regulators so that those rules make sense. We're starting to see all of that happen. We don't have a time frame, though. Governor Greg Abbott gave clear instructions on the 21 and up restriction, which has already been done through emergency rulemaking. But now we have this longer drawn-out rulemaking process that's going to tell us a lot about our own total THC limits and the way that it's enforced here in Texas. And now we have this lounding layer of challenge with the federal government as well. So this is kind of a red flag alert to everyone who cares about this, whether you're a consumer or a taxpayer who doesn't want your money wasted, arresting and prosecuting people for these products that can be used responsibly. Mm-hmm. Do you think that Ted Cruz, given his previous stances on this, will be helpful in undoing this in the future? I sure hope that he will. There have been multiple proposals and, you know, to just simply deschedule cannabis entirely. The States Act is a Republican-led piece of legislation that I'd love to see him signed on to because that would help to, you know, bring it out. Take cannabis out of the Controlled Substances Act, so it's not a scheduled substance. Alcohol is not scheduled. Tobacco's not scheduled. Cannabis should be either. Are mushrooms? I'm just curious. Cilocybin is scheduled, yes. Okay. I'm not sure what level is. Yeah. But, you know, also with all the research going on, the benefit of that natural medicine and substance, too, needs to be reconsidered. Right. And it is, it sort of does seem like the new. potential frontier for where things are going too. Well, and thankfully we're having these conversations because for so long, this medicine has been off limits. And now we're starting to see research happening, loosening up of the legality so that people can benefit from it. And we can learn more. I mean, even cannabis has not been researched nearly enough. We have a lot to learn. And cannabis isn't for everybody. We need to better understand that. Things like hypermesis syndrome. Some people, and it looks like it's a genetic thing, but it causes cyclical and unscored.

controllable vomiting and nausea for some people. they should stay away from it entirely because their body is always going to react that way. But why does it react that way? And are there some treatments that we can use to help people to get better quicker? Although, you know, with hypermesis syndrome, you stop using it and you feel better. So it's really, that's one of the kind of the least of my concerns when it comes to it because it's not a lasting impact. But we need to know more about that. We need to understand how for some people it can trigger. psychosis and schizophrenia if they're predisposed to it. Again, you shouldn't use it if you have those predispositions or a family history, but we also need to learn more about it so that we can treat that and help people to make the best decisions for themselves. Yeah, and just know what's going on in the human body and why. One last, like, technical question about this. I'm just curious if in the city of Austin, you know, where we have deprioritized arrests of certain amounts of marijuana, is anything going to change based on this? I mean, I realize we're still a year out from any potential effect of this new ban, but. Could that change? Like, because federal law would trump any local policy? Like, what could the city of Austin do under this ban? You know, Austin was an example of one city that moved forward with an official ordinance, basically decriminalizing locally. There was a lawsuit from the state attorney general saying this specific in the law that you cannot change drug laws locally. There are other things you can do locally. This isn't one of them. And he won that lawsuit, unfortunately. And so what the city of Austin had that ordinance is no longer in place, but what they can still. do is simply prioritize their resources. They always have that discretion. And that's what we've been doing here in Austin and we'll continue to do, I think, regardless of what the federal law is, local law enforcement, local cities, making a decision that we're not going to have an official policy on this, but we are going to encourage that we, that we deprioritize these arrests because there are victims of real crime that deserve justice. And every arrest for cannabis takes that law enforcement officer off the streets, not only while they're doing the booking process, but then when they go to court, the district attorney has yet another cannabis case on his desk, rather than focusing on domestic violence, focusing on prosecuting someone for cannabis possession. It's outside of the values that we have as Austinites as Texans. That's what we've heard overwhelmingly. 80% of Texans agree that we should regulate.

rather than prohibit these substances. So I think we'll continue to see non-enforcement or deprioritization at the local level. And hopefully at the state level, we see effective regulation and enforcement allowing these products for responsible adult use. Gotcha. So locally, it'll look more informal maybe just as like we're prioritizing certain other things or, you know, maybe where we're putting our resources kind of thing. That's right. Well, great to talk to you again, Heather. Thank you for clearing this up for me and for our listeners. We hope that you can get some rest and stop having to read so many different pieces of legislation soon. My goodness, it's been a heck of a year. And I just want to let everybody know that we're hosting a policy conference at UT Austin's Thompson Conference Center at the end of January. You can find more information at Texas Cannabisconference.org. Early bird registration is open now. We're welcoming new and returning sponsors. And this is going to be a very... lively event with debate on all sides of the issue. We don't shy away from debating and not even debating, having conversations with those who maybe were on the other side of this issue, bringing them to the table so we can address our common concerns and maybe work on finding some more common ground. So definitely inviting everybody to join us in Austin at the end of January for the Texas Cannabis Policy Conference. Heather, thank you so much for being with me today and we'll see you again. Thank you so much.

That's all for today here on CityCast Austin. You can find a link to the Texas Cannabis Policy Center's website in our show notes. And if you enjoyed the show, why not tell a friend, rate the show, leave us a review and subscribe to our Hey Austin newsletter. And if you really love CityCast Austin, help support us by becoming a neighbor today at membership.citycast.fm. We'll be back tomorrow morning with more news from around the city. Bye.