Hemp Businesses Sue Texas Over Schedule I THC Ban

A coalition of hemp businesses and a retired police officer filed a federal lawsuit on August 1, 2026, in the U.S. District Court for the Southern District of Texas to block a new regulation by the Texas Department of State Health Services. The rule reclassifies non-delta-9 tetrahydrocannabinols—including delta-8, delta-10, THCP, and THCA flower—as Schedule I controlled substances, making possession a state jail felony punishable by up to two years in prison and $10,000 in fines.

Plaintiffs, including Lifted Liquids, Inc. and The Happy Cactus Apothecary LLC, argue the rule violates the 2018 Farm Bill and the U.S. Constitution's Due Process, Supremacy, and Commerce clauses. The administrative change follows a May Texas Supreme Court decision that ended a previous injunction and occurred after Governor Greg Abbott vetoed similar legislation. Under the current rule, only delta-9 THC products with less than 0.3% THC by dry weight remain legal.

Law enforcement in Jefferson County stated that prosecutions will depend on laboratory testing to determine the specific THC strength and type of seized products. Business owners report these regulatory shifts are forcing closures and potential mass layoffs.