Rhiannon Dee Yard, MBA,
Founder & CEO, Green Gaia Innovations, LLC, DBA: Hemp Gaia
Introduction
Texas has made significant strides in embracing the hemp industry, particularly after the federal legalization of hemp through the 2018 Farm Bill. However, despite allowing the sale and purchase of smokable hemp flower within the state, Texas has placed a perplexing and economically detrimental restriction on the manufacturing and processing of smokable consumable hemp products. This law, which prohibits the manufacturing and white labeling of such products within Texas while allowing them to be brought in from other states, is not only counterproductive but also imposes unnecessary financial and regulatory burdens on local businesses.
The Inconsistencies and Economic Impact
The current Texas law creates a paradoxical situation where hemp farmers and processors within the state are forced to send their raw materials out of state for processing and manufacturing. This results in several key issues:
- Increased Costs and Financial Hardship: The requirement to send hemp out of state for manufacturing significantly increases production costs. Texas businesses must bear the expense of transportation, out-of-state manufacturing fees, and then the cost of bringing the finished products back into Texas for sale. These added costs are ultimately passed on to consumers, making Texas-produced hemp products less competitive in the marketplace. For small and medium-sized businesses, this financial burden can be particularly crippling, limiting their ability to scale and grow.
- Loss of Local Economic Opportunities: By prohibiting in-state manufacturing, Texas is essentially outsourcing jobs and economic opportunities to other states. The hemp industry has the potential to create a significant number of jobs in manufacturing, processing, packaging, and distribution. However, these opportunities are being lost to states with more favorable manufacturing laws. Allowing in-state manufacturing would not only create jobs but also stimulate local economies through increased business activity and tax revenue.
- Regulatory Challenges and Lack of Control: Sending hemp products out of state for manufacturing complicates regulatory oversight. Texas regulators have limited control over the manufacturing processes used in other states, which could lead to inconsistencies in product quality and safety. By allowing in-state manufacturing, Texas could implement stricter quality controls and ensure that all products meet the same high standards for safety and compliance. This would not only protect consumers but also enhance the reputation of Texas-produced hemp products.
- Environmental Impact: The requirement to transport hemp across state lines for processing also has an environmental impact. The additional transportation increases the carbon footprint of Texas hemp products, which is at odds with the sustainability goals of many hemp businesses and consumers. Allowing in-state manufacturing would reduce the need for long-distance transportation, making the hemp industry more environmentally friendly.
The Case for Reform
The prohibition on in-state manufacturing of smokable consumable hemp products is an outdated and counterproductive regulation that fails to recognize the economic potential of the hemp industry in Texas. Reforming this law to allow in-state manufacturing would:
- Reduce Costs: Texas businesses would no longer have to incur the additional expenses associated with out-of-state manufacturing, allowing them to offer more competitively priced products.
- Create Jobs: In-state manufacturing would create new employment opportunities across the entire hemp supply chain, from farming to finished product.
- Enhance Regulatory Oversight: Texas could maintain stricter control over the quality and safety of hemp products, ensuring that all products sold in the state meet rigorous standards.
- Promote Sustainability: Reducing the need for cross-state transportation would lower the environmental impact of hemp production, aligning with the sustainability goals of the industry.
Conclusion
The current restrictions on in-state manufacturing of smokable consumable hemp products are not only economically damaging but also place Texas at a disadvantage in the rapidly growing hemp industry. By allowing in-state manufacturing, Texas could unlock significant economic opportunities, improve regulatory oversight, and enhance the sustainability of its hemp industry. It is time for Texas to reform this outdated law and fully embrace the potential of its hemp industry.
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