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Texas Hemp Industry Stalled by Budget Shutdown

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  Published in Media and Entertainment on Wednesday, November 12th 2025 at 9:36 GMT by Houston Public Media

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Texas Hemp Industry Stalled by Budget Shutdown, New Bill Aims to Fix the Problem

The Texas Legislature has introduced a bill that seeks to reopen the state’s government agencies and, as a by‑product, restore the hemp industry that has been grinding to a halt. The piece, published by Houston Public Media, follows up on a broader “government shutdown” that has left many state‑run agencies, including the Texas Department of Agriculture (TDA), without funding or the legal authority to conduct business. The hemp industry, an emerging and highly profitable sector for the state, has been hit hard by the shutdown, and the proposed legislation aims to re‑establish the regulatory framework that is required for hemp growers, processors, and distributors to operate legally.

The Background: A Budget Deadlock and Its Immediate Consequences

Texas reached a stalemate in 2025 over its $35 billion budget, and the result was a full‑blown shutdown of most state agencies. According to the article, “the shutdown has already caused a ripple effect across several industries, and the hemp sector is one of the most visible victims.” With no state funding available, the Texas Department of Agriculture was unable to issue the licenses it was mandated to grant under the 2021 Farm Bill. That bill, which gave the state legal authority to regulate hemp, required the TDA to approve license applications and enforce compliance with the federal Agriculture Improvement Act (often called the “Farm Bill” or “AG Act”).

The hemp industry’s plight is illustrated by the story of Marina T., a Houston‑based farmer who had built a network of hemp fields on a 200‑acre property just outside the city. “I had my paperwork in order, I had a plan to sell my product to local cannabis processors, and I was waiting for my license,” she said. “Now the agency can’t even process applications, so we’re stuck in limbo.”

Because the hemp industry was still in its infancy in Texas, the shutdown has had a disproportionate impact. The state has only a handful of licensed growers—most of them small‑scale producers who rely on the TDA’s license to legally sell their product. The shutdown has left them without a clear path to sell, store, or distribute, which in turn has jeopardized jobs, potential tax revenue, and the growth of ancillary businesses like hemp‑based textiles and cosmetics.

The Proposed Bill: How It Seeks to Reopen and Re‑Regulate

The new legislation—referred to as HB 1120 in the article—contains several key provisions aimed at restoring the hemp industry:

1. Reinstatement of the Texas Department of Agriculture’s Authority
   The bill would re‑authorize the TDA to issue hemp licenses and to enforce compliance with federal and state regulations. It would also grant the department an immediate $3 million appropriation to cover the backlog of pending applications.

2. Fast‑Track Licensing for Existing Growers
   The law proposes a “priority processing” program that would allow growers who had submitted applications prior to the shutdown to receive licenses within 30 days of the department’s reopening.

3. State‑wide Licensing Cap
   The legislature sets a cap of 1,000 licenses statewide for the first year, in order to prevent an oversupply of hemp that could dilute the market and cause a drop in prices. That number is “flexible” according to a comment from the Texas Farm Bureau.

4. Financial Assistance for Processing Facilities
   A $2 million grant will be allocated to help owners of small‑scale processing plants install the necessary testing equipment to meet federal safety standards.

5. Public Comment Period
   The bill includes a 45‑day public comment period to allow stakeholders—farmers, processors, distributors, and consumer advocates—to submit feedback before the law goes into effect.

The article quotes Commissioner Dan Heinemann of the Texas Department of Agriculture, who is a key proponent of the bill. “We are committed to putting Texas on the map for hemp,” he says. “The shutdown was a roadblock that needs to be cleared so that growers can operate legally and safely.”

Linking to Broader Contexts

Several hyperlinks in the Houston Public Media article lead to additional resources that provide deeper context:

• Texas Department of Agriculture – Hemp Licensing
  The TDA’s website explains the licensing process and the safety standards that hemp products must meet. The link outlines the “Licensing Procedure for Commercial Hemp Growers” and includes a FAQ section that clarifies how the 2021 Farm Bill’s provisions have been implemented at the state level.

• Texas Farm Bureau – Hemp Industry Update
  The Farm Bureau’s page gives an overview of how the state’s farming community is adapting to the new federal hemp regulations. It also lists state‑level incentives and outlines the importance of local farmers in building the supply chain.

• Texas Legislature – HB 1120
  The bill’s text itself is posted on the Texas Legislature’s website, allowing readers to read the exact language. The bill’s “Title” section clarifies the legislative intent, while the “Summary” section details how the law will address the shutdown’s impacts.

• U.S. Department of Agriculture – Farm Bill
  A link to the USDA’s explanation of the 2021 Farm Bill provides the federal backdrop for Texas’s hemp regulation. It explains how hemp is classified as an “industrial crop” and outlines the testing and reporting obligations for growers.

Economic and Social Implications

The article argues that restoring the hemp industry will have a significant economic payoff for Texas:

• Job Creation
  A recent report from the Texas Hemp Growers Association predicts that a fully operational hemp sector could create over 1,200 jobs statewide. This includes not only cultivation positions but also roles in processing, packaging, and distribution.

• Tax Revenue
  Hemp-derived products—particularly CBD oils and hemp‑based foods—are expected to generate millions of dollars in sales tax. The bill’s fast‑track licensing would bring these businesses back online, allowing the state to start collecting revenue again.

• Innovation and Export
  Hemp is known for its high fiber quality and low environmental impact. The article notes that Texas has the potential to become a leading exporter of hemp fibers to markets in the U.S. and abroad.

• Health and Wellness
  The growing popularity of CBD products has created a consumer base that is already present in Texas. A re‑open state would allow local farmers to meet that demand legally, ensuring product safety and traceability.

The Road Ahead: Challenges and Next Steps

Despite the optimistic framing, the article also mentions potential hurdles:

• Regulatory Lag
  Even after the bill passes, the TDA will need to develop detailed regulations and enforcement mechanisms. The “Fast‑Track Licensing” program is only the first step.

• Funding
  While the bill provides an immediate appropriation, the Texas Legislature will still need to ensure ongoing funding for the department’s hemp program.

• Stakeholder Coordination
  Coordination between the TDA, the Texas Department of State Health Services, and the Texas Agriculture Commissioner’s office will be critical. A misstep could again stall the industry.

• Public Perception
  The hemp industry’s success also depends on public trust. The article cites an upcoming town‑hall meeting in Houston where residents will have the opportunity to ask questions about safety standards and environmental impacts.

In closing, Houston Public Media highlights that the shutdown’s economic ripple effect extends far beyond the immediate inconvenience for state agencies. For Texas growers like Marina T., the proposed bill offers a lifeline. The legislation’s success will hinge on swift implementation, continued funding, and transparent communication between government, industry, and consumers.

Key Takeaways

• A Texas budget shutdown has halted the state’s ability to issue hemp licenses, crippling the industry.
• HB 1120 proposes to reopen the government, allocate funds, and fast‑track licensing for growers.
• The legislation could spur job creation, tax revenue, and innovation in the hemp sector.
• Challenges remain in regulatory enforcement, ongoing funding, and stakeholder coordination.

With the state’s lawmakers poised to sign HB 1120 into law, Texas may soon resume its role as a growing hub for hemp production, benefiting farmers, businesses, and consumers alike.