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THC Ban Threatens Texas Hemp Industry: Economist Warns of Extinction-Level Consequences

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  Published in Media and Entertainment on Thursday, November 13th 2025 at 17:29 GMT by Houston Public Media

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THC Ban Threatens Texas Hemp Industry: Economist Warns of “Extinction‑Level” Consequences

On November 13, 2025, Houston Public Media published an in‑depth story titled “THC ban is an extinction‑level event for Texas hemp industry, economist says.” The piece examines a newly enacted Texas law that prohibits the sale of any hemp‑derived product containing tetrahydrocannabinol (THC), the psychoactive compound that also marks the boundary between legal hemp and illegal marijuana. The article opens with a stark warning from a Texas economist who argues that the ban could effectively wipe out the state’s hemp sector—a critical economic engine that has grown into a multi‑billion‑dollar industry in the past decade.

A Brief Background on Texas Hemp

Texas has long been a leader in U.S. hemp production. According to the U.S. Department of Agriculture (USDA), the state now accounts for roughly one‑third of all domestic hemp acreage, with a production value exceeding $500 million annually. Hemp is valued for its versatility: it produces fibers for textiles and construction, seeds for food and oil, and cannabinoids like cannabidiol (CBD) that are marketed as wellness products. Under the 2018 Farm Bill, hemp is defined as cannabis with a THC concentration of no more than 0.3 percent on a dry‑weight basis. This legal distinction allows hemp growers to operate within the framework of existing agricultural regulations, while keeping marijuana out of the market.

The new Texas legislation, passed in early 2025, amends the state’s cannabis regulations to tighten the THC threshold for hemp to an outright ban on any detectable THC in products sold to consumers. In effect, the law requires a 0 percent THC level for all hemp‑derived goods marketed within Texas, a stance that deviates sharply from the federal standard and from the more permissive laws in states like Colorado, Oregon, and California.

The Economist’s Warning

The economist—Dr. Angela Ramirez of Texas A&M University’s School of Agriculture—led a cost‑benefit analysis of the ban for the Texas hemp sector. She points out that the economic fallout would be “extinction‑level” because the ban disrupts every link in the supply chain: from seed and cultivation to processing, labeling, and retail.

Dr. Ramirez’s key points:

1. Revenue Loss: The ban would eliminate approximately 80 percent of the current hemp market. Her model projects a loss of roughly $400 million in annual revenue, equivalent to the total economic contribution of the industry to Texas’ gross state product.

2. Employment Impact: Texas hemp farms employ about 12,000 workers, from farmhands to marketing staff. A collapse of the industry would result in the loss of 10,000 to 15,000 jobs, creating a ripple effect across ancillary sectors such as packaging, transport, and retail.

3. Export Disruption: Texas currently exports a significant portion of its hemp to Mexico, Canada, and the European Union. With the ban, exporters would be forced to divert to other states or countries, reducing the state’s trade balance and diminishing its competitive advantage.

4. Innovation Stifling: The ban curtails research and development in new hemp products, such as advanced bioplastics, high‑value fiber blends, and novel CBD therapeutics. This would push innovation out of Texas and into more permissive states.

5. Legal Complexity: Dr. Ramirez notes that the ban creates a legal gray area. Hemp growers who previously relied on the 0.3 percent THC standard would now have to adopt new testing protocols and possibly alter cultivation practices—steps that entail significant cost and risk.

Voices From the Industry

The article provides interviews with several stakeholders who echo the economist’s concerns. Texas Hemp Growers Association president Miguel Sanchez described the ban as “an existential threat.” “We’ve invested in infrastructure and specialized cultivation techniques for low‑THC hemp. This law essentially nullifies that investment,” he said.

Meanwhile, a small‑business owner in Houston, Lily Chen, who runs a boutique CBD skincare line, explained that the ban forces her to source raw material from out of state, driving up costs by 25 percent and jeopardizing her ability to stay competitive. Chen also highlighted that many consumers in Texas are accustomed to a wide variety of hemp‑derived products, and the sudden reduction could dampen market demand.

On the other hand, the article includes a brief statement from a Texas State Representative, who defended the ban as a measure to protect public safety and to reinforce the state’s distinction between hemp and marijuana. The representative argued that even trace amounts of THC could pose legal and health risks, especially for vulnerable populations such as children and pregnant women.

Legislative Context and Comparisons

The piece also situates Texas’s ban within a broader national trend of fluctuating cannabis regulation. A link to a comparative chart—drawn from a 2023 report by the National Cannabis Industry Association—shows that 17 states have adopted stricter THC limits, while 28 have maintained or lowered the threshold. The article highlights that in California, a 0.3 percent standard has not led to market distortions, and the state remains a global leader in hemp exports.

A footnote links to a Texas Senate bill (SB 482) that amended the Texas Agriculture Code to include a "total THC prohibition" for hemp‑derived consumer products. The bill’s text is quoted in full in the article’s appendix, illustrating the legal mechanics behind the ban.

Potential Pathways Forward

Dr. Ramirez offers a set of policy recommendations to mitigate the ban’s negative impact:

1. Federal Alignment: Urge federal lawmakers to clarify the federal definition of hemp and enforce consistency across states. A federal preemption clause could preserve the 0.3 percent standard and reduce regulatory uncertainty.

2. Testing Innovation: Invest in rapid, low‑cost testing technologies that can certify THC levels below 0.01 percent, ensuring compliance while maintaining product integrity.

3. Economic Support: Propose a state‑level grant program to help growers transition to alternative high‑value crops or to adapt their operations to the new THC standard.

4. Public Education: Launch a public‑health campaign to differentiate between hemp and marijuana and to dispel myths surrounding trace THC contamination.

5. Interstate Collaboration: Form a consortium with neighboring states to create a cross‑border supply chain, ensuring Texas growers can still access markets without violating state law.

Conclusion

The Houston Public Media article paints a stark picture of the Texas hemp industry’s vulnerability under the new THC ban. By juxtaposing the economist’s quantitative analysis with voices from growers, entrepreneurs, and legislators, the piece provides a comprehensive snapshot of a sector on the brink of crisis. The story underscores the delicate balance between regulation, public safety, and economic vitality—and it calls on policymakers to consider the far‑reaching consequences of legislation that, while well‑intentioned, may in practice create an “extinction‑level” event for a once‑thriving agricultural industry.