As with many states, Texas and the cannabis plant have a long, complex history – from the first citywide cannabis ban adopted in El Paso in 1915, to the enactment of state laws in 1931 that made possession of any amount of cannabis illegal statewide, to imposing in 1955 sentences of up to life imprisonment for cannabis possession by repeat offenders.
In this two-part article, we provide an overview of the cannabis-related legislation and regulations applicable to Texas cannabis operators and consumers. In Part I, we discuss the State’s regulations for limited medical cannabis use and consumption. In Part II, we will cover Texas’s hemp program.
Recent movements across the nation to decriminalize cannabis have been gaining steam. Perhaps, as a sign of the times, Texas enacted the Compassionate Use Act (the “Act”) in 2015, thereby creating a medical cannabis use program for Texas permanent residents known as the Compassionate Use/Low-THC Cannabis Program (the “Program”). Initially, to the dismay of many, only patients diagnosed with intractable epilepsy were eligible for the Program, and, even then, only after obtaining two qualified physicians’ opinions that cannabis may be an effective treatment for the patient. Although ever-cautious, Texas legislators took heed to those asking for broader application, and, in 2019, expanded the Act to incorporate additional medical conditions, and clarified and simplified certain requirements, which included, among other things, the need to obtain the opinion of only one qualified physician.
Generally, the Act covers patient eligibility, physician qualifications, low-THC cannabis and medical use requirements, and licensing of dispensing organizations. The Act further establishes an online database containing such patient, physician, prescription and dispensing organization information known as the Compassionate-Use Registry of Texas (“CURT”), and charges the Department of Public Safety (the “Department”) with administration and maintenance of the Program. The Act further prohibits counties and local governments from enacting, adopting, or enforcing a rule, ordinance, order, resolution, or other regulation that prohibits the cultivation, production, dispensing, or possession of low-THC cannabis as authorized by the Act.
Patients and Treatment
Although cannabis remains a controlled substance under federal laws, the Act exempts the medical use by eligible Texas patients of “low-THC cannabis” from penalties associated with the unlawful possession, use and delivery of cannabis. To qualify as medical use, the patient must ingest (not smoke) the low-THC cannabis in only the prescribed amount. Current eligible medical conditions include seizure disorders, multiple sclerosis, spasticity, amyotrophic lateral sclerosis, autism, terminal cancer, and any incurable neurodegenerative disease.
The Doctor Is In
In order to prescribe low-THC cannabis, a physician must be duly licensed and certified by approved specialty boards in a specialty relevant to the treatment of the patient’s particular medical condition, and must dedicate a significant portion of his/her clinical practice to the evaluation and treatment of the patient’s particular medical condition. As part of issuing or renewing a prescription, a physician must register in CURT as the patient’s prescriber. Registered physicians must immediately inform the Department of any change in their qualifications to prescribe low-THC cannabis.
Under many other states’ compassionate use programs, physicians provide a “recommendation” for cannabis, rather than a prescription. The distinction in terminology is important because under federal law, cannabis cannot be lawfully prescribed by a physician or used by a patient. Understandably, physicians are wary of violating federal law even if their actions are allowed under state law. In a move aimed at increasing physician participation, the Texas legislature clarified in the 2019 amendments that the term “prescription”, as relates to medical use of low-THC cannabis under the Act and the Program, means an entry in CURT.
The prescription entry in CURT must include the physician’s name, patient’s name, date of birth and last four digits of the patient’s social security number, prescribed dosage, means of administration ordered, and the total amount of low-THC cannabis required to fill a patient’s prescription. The physician must certify the patient’s qualifying medical condition and, in the physician’s determination, that the risk of the medical use of low-THC cannabis is reasonable in light of the potential benefit to the patient. Finally, the physician must maintain a patient treatment plan that indicates the dosage, means of administration and planned duration of treatment using low-THC cannabis, and plans for monitoring patient symptoms and indicators of tolerance or reaction to low-THC cannabis.
CURT: More than a Prescription
CURT is a secure, online database administered and maintained by the Department, and houses information provided and populated by physicians and licensed dispensing organizations (discussed further below). CURT is designed to prevent more than one qualified physician from registering as the prescriber for a single patient, and to keep a running record of the amount of low-THC cannabis dispensed to the patient and the dispensing organization. In addition to entering patient prescriptions into CURT, registered physicians also input safety and efficacy data derived from the patient’s treatment.
Law enforcement agencies and dispensing organizations have access to CURT for purposes of verifying whether a patient has been prescribed low-THC cannabis and whether the patient’s prescriptions have been filled. Additionally, law enforcement may call the Department to verify a patient, whether such patient’s prescription has been filled, or a dispensing organization employee’s status. It should be noted that “law enforcement” is not defined within the applicable statutes, rules or regulations governing the Program and is therefore subject to broad interpretation.
Dispensing Organizations: Regulated Relief
Only licensed dispensing organizations (“Licensees”) may cultivate, process and dispense low-THC cannabis for a qualifying patient’s prescription. The enacting legislation for the Program required the Department to issue at least three dispensing organization licenses on or before September 1, 2017. As of December 15, 2017, the Department has issued licenses to Fluent (formerly Cansortium Texas), Compassionate Cultivation and Surterra Texas, and is not currently accepting new applications. Each Licensee determines how best to achieve statewide access and availability for patients, which is often a combination of prescription delivery or over-the-counter fillings . As a counterpart to access and availability, the Department sets statewide production limits of low-THC cannabis, and each Licensee may produce up to its proportionate share based upon the current number of Licensees. That said, the Department has declined to regulate cost pricing for low-THC cannabis, which is instead market-based and determined by each Licensee for each product.
In order to lawfully dispense low-THC cannabis, the Licensee must verify (1) the person presenting the prescription is listed as a patient in CURT, (2) the total amount of low-THC cannabis required to fill the prescription is consistent with information set forth in CURT, and (3) the prescription was not previously filled by a dispensing organization as indicated in CURT. Upon filling the prescription, the Licensee must immediately record the form and quantity of low-THC cannabis dispensed and the date and time of dispensation in CURT. Licensees are not permitted to fill any prescription or recommendation for low-THC cannabis written in a different state.
Cannabis cultivation, production, dispensing and possession in Texas remains strictly limited and regulated. Research or development beyond that which is necessary for the cultivation or production of low-THC cannabis continues to be prohibited. As such, testing laboratories are not permitted and are not eligible for separate licensure, and only Licensees may test (presumably for quality control purposes) low-THC cannabis products. Licensees and each of Licensee’s directors, managers, and employees may not permit or fail to prevent the diversion of any controlled substance. Additionally, only low-THC cannabis may be dispensed or sold; by-products must be destroyed. Waste materials containing low-THC cannabis or raw materials (including byproducts) used in or created by the production or cultivation of low-THC cannabis must be rendered “irretrievable” as defined in applicable federal regulations.
Operate at Your Own Risk
The Department tightly regulates virtually all aspects of the Licensee’s operations. Street maps and floor plans of each location of the Licensee’s facilities are kept in the Department’s file. If the Licensee intends to extract active ingredients from raw materials at its premises, the Department requires a myriad of supplemental systems (e.g., hazardous exhaust system, gas detection system, vent failure system alarms, mechanical ventilation, and emergency power backup system), some of which must be certified by a Texas licensed professional engineer.
From an operational standpoint, the Department’s reach includes personnel and controlled substance regulations, some of which overlap. For example, Licensees must implement a drug-free workplace policy and maintain files (including an acknowledgment of such policy) on all personnel, and must retain additional detailed personnel records. Additionally, the Department broadly regulates premises maintenance, and sanitation and hygiene practices to avoid product contamination and promote food-grade processing areas. Licensees are further subject to extensive consumer protections (including limiting pesticides and disease, and setting forth plans to establish a recall). Licensees must also comply with Department-promulgated minimum security standards, and are subject to stringent and broad-ranging record keeping requirements.
The Department sets forth detailed protocols relating to the Licensee’s inventory control system. The Licensee’s perpetual inventory control system must be both robust enough to identify and track its stock of low-THC cannabis from the time raw materials are propagated from seed or cutting, to the time it is delivered to either another Licensee or patient, and agile enough to promptly identify a discrepancy and immediately interact with CURT. The Department also requires monthly physical inventory checks, and audits in the event of a discrepancy.
Failure to comply with the duties of a licensed dispensing organization subjects the Licensee to suspension or revocation of such license. Dispensing organizations may not conduct regulated activities (including possession of any raw material or byproducts) if the respective license or registration is not in good standing. Following suspension or revocation of the license, the Department may seize or place under seal all low-THC cannabis and drug paraphernalia owned or possessed by the dispensing organization. When a revocation order becomes final, all low-THC cannabis and drug paraphernalia may be forfeited to the State.
On the Horizon
While recreational use of cannabis in Texas continues to be illegal, recent years have brought some relief to Texans diagnosed with certain debilitating medical conditions in the form of low-THC cannabis, but only with strict adherence to stringent regulations. Proponents wishing to further expand the Program would like to add other medical conditions such as post-traumatic stress disorder, which was recommended but ultimately omitted in the 2019 amendments, and an elevation in permitted THC levels, as the current 0.5% THC level is just barely above the 0.3% THC allowed by the federal government (and as of 2019, Texas government) relating to hemp production. Whether proponents succeed in their efforts remains to be seen, as the complicated relationship between Texas and cannabis continues to evolve.
 Tex. Health and Safety Code, Chapter 487, with applicable amendments to §§ 481.062(a)(6), 481.111(e) and (f); addition of Texas Occupations Code Chapter 169 and §551.004(a)(5).
 THC stands for tetrahydrocannabinol, a crystalline compound that is the main active ingredient of cannabis.
 Act, S.B. 339, 84th Leg. (2015).
 Act, H.B. 3703, 86th Leg. (2019).
 Under the Act, “low-THC cannabis” means any part of the cannabis plant not containing more than 0.5% THC by weight and not less than 10% by weight of cannabidiol. (Tex. Occupations Code, § 169.001(3); 37 Tex. Admin. Code § 12.7(q).)
 Tex. Health and Safety Code, § 487.201.
 Tex. Occupations Code § 169.001(4).
 Tex. Occupations Code §§ 169.001, 169.003; “incurable neurodegenerative disease” is more specifically set forth in 25 Tex. Admin. Code § 1.61.
 Tex. Occupations Code § 169.002.
 Tex. Occupations Code § 169.004.
 37 Tex. Admin. Code § 12.43(b).
 Act, H.B. 3703, 86th Leg., § 2 (2019).
 Tex. Occupations Code § 169.004.
 Tex. Occupations Code § 169.003.
 Texas Occupations Code § 169.005.
 Texas Health & Safety Code § 487.054.
 Tex. Health & Safety Code § 487.001(3).
 Act, S.B. 339, 84th Leg. (2015).
 More generally, the Department seems reluctant to license additional dispensing organizations, noting that the number of licenses approved was determined by analyzing other states’ medical use programs, the number of patients in Texas with qualifying medical conditions, and statutory requirements (e.g., at least 3 licenses but no more than necessary to ensure reasonable statewide access and availability by patients filling their prescriptions).
 37 Tex. Admin. Code § 12.61.
 Texas Health & Safety Code § 487.107; 37 Tex. Admin. Code § 12.42(b).
 37 Tex. Admin. Code § 12.2(v).
 37 Tex. Admin. Code § 12.2(h).
 37 Tex. Admin. Code § 12.2(w).
 37 Tex. Admin. Code § 12.9(b); 21 C.F.R. 1300.
 37 Tex. Admin. Code § 12.7(g)-(h), (j).
 37 Tex. Admin. Code § 12.2(d).
 37 Tex. Admin. Code § 12.4.
 37 Tex. Admin. Code §§ 12.2(n), 12.7(a).
 37 Tex. Admin. Code § 12.9.
 37 Tex. Admin. Code §§ 12.31-32.
 37 Tex. Admin. Code § 12.4.
 37 Tex. Admin. Code § 12.8.
 37 Tex. Admin. Code § 12.8(g)-(i).
 37 Tex. Admin. Code § 12.2(f).
 Tex. Health and Safety Code § 487.108(c).