Licensing and Planning in Texas

Texas is an influential state for various reasons, and it holds a very conservative drug policy. Texas is pretty hard on cannabis. However, Texas enacted the Compassionate Use Act in 2015, legalizing the use of certain types of oils extracted from low THC cannabis strains for patients who have chronic epilepsy. The Department of Public Safety handled applications for the establishment of vertically integrated medical marijuana enterprises and accepted several of them in early 2017. Three dispensing organizations, selected from a total of 43 applicants, received licenses to cultivate, process, and dispense medical cannabis by the end of 2017.

The State of Texas’ Cannabis Market

Texas has approved lightly-infused THC oil for medical purposes.
Texas has approved lightly-infused THC oil for medical purposes.

Texas’ current medical cannabis market is exceptionally small. As of January 2018, just 11 physicians had registered to offer services within the program, but no one had qualified to obtain medical cannabis. Under the program, physicians are only allowed to “prescribe” medical cannabis instead of “recommending” it to patients. In addition, two neurologists must verify that traditional treatments have yielded futile results before the designated patient can be considered for a medical cannabis prescription.

According to Knox Medical, only about 150,000 epileptic people in Texas would be eligible for CBD. If the State’s treatment program is changed to emulate what several other states have done by allowing a wider range of medical cannabis strains and additional qualifying conditions such as inflammation and chronic pain, there is great potential for substantial growth.

Advocates are hoping to enact broader Texas medical cannabis laws that could come during the 2019 legislative session. These are signs that this populous state of about 28.3 million people is ready to adopt policies that would readily accommodate different medical cannabis patients. If the rules are loosened to meet the needs of patients, demand will grow as more patients will begin to join. And if Texas legalizes recreational cannabis, the market could be as large as $3 billion.

Licensing Requirements

Although Texas is not issuing medical cannabis licenses at this time, it is in your best interest to get an insight of the requirement for opening a dispensary in Texas. According to the 37 Tex Admin Code 1, Chap 12, the medical cannabis program fees are as follows:

  • The license fee for a dispensing organization for a two year period is $488,520
  • The license application fee for a dispensing organization is $7,356
  • The registration fee for both renewals and the original registration is $530
  • The biennial renewal fee of a license is $318,511

While Texas currently has stringent cannabis cultivation laws, it is possible that opportunities for operating cannabis-related businesses will expand as the state moves toward more relaxed cannabis laws.