STEVE INSKEEP, HOST:
Some other news now. A court fight is playing out in Texas this week, which could determine whether thousands of Texans can buy legal cannabis flowers and extracts. From member station KUT in Austin, Nathan Bernier reports.
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NATHAN BERNIER, BYLINE: The smell of cannabis greets people who walk into TerpHaus, a hemp store in south Austin. Co-owner Rees Newlin shows me around their small storefront.
REES NEWLIN: So this is our flower. We have indoor. We have top shelf. We also have prerolls.
BERNIER: The products sold at TerpHaus and 13,000 other registered retail locations across Texas are called hemp. Marijuana and hemp come from the same plant. The only difference in Texas law is hemp has low amounts of Delta-9 THC, the main psychoactive compound in cannabis. But hemp has many other ingredients, including something called THCA, which converts to Delta-9 when heated or smoked. And that's how stores in many states that ban recreational marijuana have been able to sell smokable forms of cannabis. But in Texas, that all changed a few weeks ago.
CASEY NEWLIN: I think the regulations, personally, were designed to kill this industry.
BERNIER: Casey Newlin is Rees' brother and also a co-owner of TerpHaus. The regulations he's talking about were adopted by the state's health department in March following an executive order by Governor Greg Abbott. The new rules clamped down on THCA, which effectively banned the sale of smokable hemp products, even though possessing them remains legal.
C NEWLIN: They basically took our highest-selling products off the shelves. I can tell you, our sales went to 5%. That's not even enough to cover our rent.
BERNIER: Earlier this month, Texas hemp businesses sued the state. They argued regulators went beyond their authority by changing what counts as legal hemp and by imposing sharply higher fees on businesses. A state court issued a temporary restraining order, allowing smokable products back on store shelves while keeping those higher fees in place. This week, the hemp industry is asking for something longer-lasting - a temporary injunction that would keep some of the new rules on hold while the lawsuit plays out, which could take years.
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UNIDENTIFIED JUDGE: The court will call D-1-GN-26-002511, Texas Hemp Business Council.
BERNIER: During court proceedings, attorneys for the state of Texas argued regulators did not rewrite the law. They said THCA levels have long been a part of how hemp is tested prior to harvesting. And so now they say regulators are just applying that total THC metric to consumable products. Zachary Berg is a lawyer with the Texas attorney general's office.
ZACHARY BERG: The definition of total THC used in the rules is consistent with the federal definition and consistent with the definition of other states such as Colorado.
BERNIER: Texas has the biggest hemp market in the country, according to Robin Goldstein. He directs research at the Cannabis Economics Group at UC Davis. Goldstein says businesses nationwide are selling products into Texas.
ROBIN GOLDSTEIN: If you suddenly cut off that revenue stream for them, a lot of the producers of these products, which are shipping across state lines and which are located all across the country, those are threatened by the Texas shutdown if that happens.
BERNIER: Goldstein says prohibiting the sale of smokable hemp products could put thousands of mom-and-pop retailers out of business in Texas and prompt many consumers to turn to the illegal market.
For NPR News, I'm Nathan Bernier in Austin.
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