The Houston Chronicle
Gov. Greg Abbott has a choice when it comes to banning hemp-derived delta-8 and delta-9 THC products: listen to hundreds of thousands of Texans who enjoy them or a handful of powerful Republican lobbyists working for marijuana investors.
Abbott is in the crossfire of a cannabis civil war. Medical marijuana and retail hemp companies are fighting over who can legally get people high. The standoff is typical Texas politics, with the medical marijuana companies hiring former aides to Abbott and Lt. Gov Dan Patrick to lobby for them, and the hemp industry relying on public pressure.
The Texas Legislature authorized medical marijuana in 2017 for a tiny number of patients. Three medical cannabis companies have spent millions complying with the Texas Compassionate Use Program to legally sell products with THC, the ingredient in marijuana that makes you high. They expected exclusivity. Since then, lawmakers have steadily expanded TCUP to treat more conditions, adding people with chronic pain this year.
In 2021, cannabis-focused venture capital firm AFI Capital Partners led a $21 million Series B investment in Texas Original Compassionate Cultivation. The company supplied 77% of the medical cannabis consumed in 2022, the latest full-year data available in an annual Texas Department of Public Safety TCUP analysis.
The investment had horrible timing. In 2019, federal and state lawmakers legalized hemp, a type of cannabis with low levels of THC. Hemp entrepreneurs figured out how to concentrate the THC, and today, the hemp industry sells many products containing enough THC to get you stoned.
Demand for medical cannabis dropped by half in 2021, DPS records show. Given a choice between getting a prescription from a doctor and finding a dispensary, most medical cannabis users switched to delta-8, delta-9 or THCA available from the corner store.
Last year, 53,000 workers grew, manufactured or sold THC edibles made from hemp, generating $5.5 billion in annual sales at 4,468 locations. Medical cannabis companies don’t report sales numbers, but they operated only 26 pickup locations and served only 29,057 patients with THC products, according to Department of Public Safety statistics.
Retail THC edibles are immensely popular, with hundreds of people testifying at the Legislature in favor of them. The Texas Hemp Business Council collected 135,000 signatures to keep them legal. But the other side is not giving up without a fight.
Abbott must decide whether to restore the medical cannabis monopoly or honor a new poll that shows most Republican primary voters want to keep retail THC products legal.
If Abbott signs Senate Bill 3, which would ban all hemp-derived THC products in Texas starting in September, he will anger the millions of Texans who support marijuana legalization. If he vetoes it, he will betray Patrick and the Republican machine in Austin, potentially making enemies ahead of his reelection campaign. He could also leave the bill unsigned, allowing it to become law.
After Texas Original’s sales started dropping, AFI Capital managing director Nico Richardson took over as CEO. I had an appointment to interview Richardson, but he canceled. His team did not respond to a request to reschedule, but Richardson has repeatedly called for a ban on hemp-based THC products.
In 2023, Texas Original hired lobbyist Logan Spence, Patrick’s former chief of staff. Ethics requirements for lobbyists in Texas do not require exact reporting, but Texas Original has paid Spence at least $208,700 and possibly more than $417,000 as of Dec. 31, regulatory filings collated by Transparency USA show.
The state’s second-largest medical cannabis company, Goodblend, is owned mainly by Florida-based Surterra
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