Cannabis Situation in Texas after Hemp Law Confusion


Jan. 15 2020, Updated 12:12 p.m. ET

Texas attempted to legalize hemp last year. However, there was a lot of confusion about whether the state legalized or decriminalized cannabis. Texans don’t understand the current cannabis situation in the state. Many people wonder if cannabis is legal in Texas. As a result, there have been a lot of arrests. The current situation shouldn’t have happened. However, the state doesn’t the right equipment or measures to determine if a person possesses hemp or marijuana. Let’s take a look at the current situation in Texas.

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Current cannabis situation in Texas

Since it’s impossible to differentiate between hemp and marijuana in Texas, city officials are now stepping up to decriminalize possession of a small amount of marijuana in the state. The Texas Tribune reported on January 10 that the Austin City Council would be voting on a proposal this month about whether to purchase equipment or decriminalize marijuana.

Texas law enforcement has been struggling since lawmakers passed the hemp law last year. There’s only a slight difference between hemp and marijuana. Marijuana has a THC (tetrahydrocannabinol) level of 0.3% or more, while hemp’s THC concentration is less than 0.3%. As a result, the state needs expensive equipment. The cannabis situation in Texas is confusing. Officials are trying to find a resolution without making matters worse.

Basically, council officials don’t think that it’s fair to make arrests for possession of low-level marijuana. The state doesn’t recognize low-level marijuana as legal hemp or cannabis. Austin City Council member Greg Casar thinks that buying equipment to differentiate between hemp and marijuana would waste the state’s resources.

However, making arrests without lab reports describing it as “marijuana” also isn’t justifiable. Casar said, “Marijuana charges can derail people’s lives.” He also said, “You can lose your eligibility for student financial aid. People have lost their jobs. People can even get deported. And so this is about taking care of people.”

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Hemp business

Since the US legalized hemp by passing the US Farm Bill, many cannabis companies have tried to expand their hemp and CBD business in the US. The CBD business has tremendous potential in the US despite facing certain doubts from the FDA.

Canopy Growth (NYSE:CGC) (TSE:WEED) acquired a hemp business, AgriNextUSA, last year to expand its hemp operations in the US. The company’s ex-CEO, Bruce Linton, stated during the announcement that the US market is Canopy Growth’s next target to grow into a revenue-generating company. Due to federal restrictions, Canopy Growth can’t launch its edibles and beverage products, which are in high demand in the US. Aurora Cannabis (NYSE:ACB) has also focused on diversifying into the hemp business by acquiring Hempco Food and Fiber last year.

Along with Cannabis 2.0 expansion, diversification in the US CBD market could help cannabis companies recover some of their losses from last year. Cannabis stocks will likely rebound this year. OrganiGram (NASDAQ:OGI) just posted impressive results. The company reported a positive EBITDA of 4.9 million Canadian dollars in the first quarter of fiscal 2020. Aphria (NYSE:APHA) also had positive profitability with 1.9 million Canadian dollars in EBITDA in the second quarter of fiscal 2020.

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Challenge to legalize cannabis in Texas

In my opinion, it’s challenging to legalize cannabis in a conservative state like Texas. Previously, I discussed how strict cannabis laws are in Texas. The state treats marijuana like any other drug. As a result, the penalties associated with marijuana are also severe. Residents have taken matters in their own hands in other states. Florida voters set up campaigns and collected signatures to get marijuana legalization on the 2020 ballot. The voters could have succeeded but new laws created delays in obtaining signatures. However, lawmakers are trying to pass bills to legalized cannabis in the state. So, Florida could see marijuana legalization in 2020. Governor Cuomo also promised to legalize cannabis in New York in 2020. Residents in Pennsylvania and South Dakota are also trying to get marijuana legalized.

So, Texans could try to step up and take the initiative to push lawmakers to take action. However, I think that it will be hard to legalize marijuana in a state where Republican leadership strictly opposes it. Many other states could try to get cannabis legalized this year.

My thoughts on marijuana legalization

I agree that cannabis has many medical benefits. However, there are some issues like overdosing, side effects, and determining the correct dosage. In order to understand marijuana’s pros and cons, we need high-quality research. Even the Trump administration agrees that more research is necessary. However, the Trump administration doesn’t seem to understand that quality research requires funding, which is only possible with federal legalization. For example, Texas can’t afford the equipment to differentiate between marijuana and hemp. Funding is essential for marijuana research.

The US should also look at how other countries benefit from cannabis legalization. Mexico, Thailand, and other countries have joined the marijuana movement. Cannabis is an evolving industry that will have ups and downs. However, looking at the rising demand, the sector can contribute to a country’s economy. Investors will also benefit if cannabis stocks rebound this year with Cannabis 2.0 growth.


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