Texas Hemp Groups Sue Over Rule Counting THCA as Delta-9 THC

October 23, 2026

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Texas hemp operators got another round of legal uncertainty dropped on them this week. On Monday, Oct. 20, 2026, two hemp industry groups — the Texas Hemp Constitutional Alliance and hemp company Green Nation — filed suit against the Department of State Health Services over rules that have been reshaping the state's hemp market since they took effect March 31. The fight centers on a single, consequential decision by DSHS: folding THCA into its definition of total delta-9 THC, a move that effectively caps nearly all commercially viable THCA flower regardless of how little actual delta-9 THC it contains.

This isn't the first time these rules have landed in court. A separate, broader challenge is already pending before a Texas appellate court, with oral argument scheduled for December. What's different now is that a second set of plaintiffs is attacking the same rules from a slightly different angle, adding fee disputes and statutory-authority arguments to the mix. With Texas' hemp-derived cannabinoid market estimated at $5.5 billion, the outcome of these overlapping cases will determine whether thousands of retailers and manufacturers can keep operating as they have, or whether a huge share of their inventory gets reclassified as an illegal controlled substance overnight.

What the Lawsuit Alleges

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The lawsuit, filed in Travis County District Court, names two top HHSC officials as defendants: interim executive director Stephanie Muth and interim commissioner Imelda Garcia. The Texas Hemp Constitutional Alliance and Green Nation are asking the court to strike down the hemp testing rules that DSHS adopted and that took effect March 31, 2026, arguing the agency simply went further than state law allows it to go.

At the heart of the complaint is a claim that DSHS tacked on pre-manufacturing and pre-retail testing requirements that don't appear anywhere in the existing hemp statutes the legislature actually passed. In the plaintiffs' telling, this isn't a case of an agency filling in technical gaps left by lawmakers — it's an agency writing new policy that the legislature never authorized, using its rulemaking power to do what amounts to lawmaking.

HHSC's public response so far has been minimal. Asked for comment by KXAN, the agency said it does not discuss pending litigation, which is a standard non-answer but also tells you this fight is likely to play out entirely in filings and hearings rather than public statements. That's consistent with how the earlier, related case has unfolded too — DSHS has largely let its lawyers and the rule itself do the talking.

For hemp businesses watching from the sidelines, the practical question isn't really about Muth or Garcia personally. It's whether a state health agency can use testing and definitional rules to accomplish what would otherwise require a legislative vote. That question has come up before in other regulatory contexts, and courts don't always side with agencies when the rule in question functionally bans something the statute left legal.

The Math Behind the Total THC Rule

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To understand why this lawsuit matters, you need to understand the formula DSHS is now using. Texas law already set limits on THCA concentration in hemp plants and required pre-harvest testing to enforce it. That part isn't new or contested. What changed with the rule effective March 31 is that DSHS started counting THCA as if it were delta-9 THC for purposes of calculating total THC content.

The agency's reasoning isn't baseless on its face: THCA converts to delta-9 THC through decarboxylation, meaning when it's heated — by smoking, vaping, or cooking — the non-intoxicating acid form becomes the compound that actually gets people high. DSHS applies a standard conversion formula to account for this: total THC equals delta-9 THC plus 0.877 times the THCA percentage.

That math sounds reasonable in the abstract, but it collides hard with how commercial hemp flower is actually grown and sold. Smokable THCA flower on the market typically tests between 15% and 30% THCA, with delta-9 THC itself kept under the federal 0.3% threshold at the plant level. Run that 15-30% through the 0.877 multiplier, though, and you get a total THC figure well above 0.3% every time — often by a factor of 50 or more.

The practical effect is that the formula doesn't just tighten the rules around hemp flower, it eliminates the category. Nearly every batch of commercial THCA flower that was legal under the plain reading of the delta-9 THC limit becomes an illegal controlled substance under DSHS's math, even though the plant's actual delta-9 content never changed. That's the gap the plaintiffs say DSHS has no statutory authority to create.

Fee Hikes Add to the Fight

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The THCA definition isn't the only thing being challenged in this suit. The plaintiffs are also going after the administrative fee structure that came bundled with the new rules, arguing the increases are so steep they can't plausibly be justified as cost recovery.

According to the lawsuit, manufacturer registration fees have jumped roughly 4,000% over the past year, while retailer fees have climbed around 3,333% in the same period. Those aren't typos or rounding — the suit frames them as evidence that DSHS set fees arbitrarily, untethered from any reasonable estimate of what it actually costs the agency to run its hemp compliance program.

This matters legally because Texas agencies are generally required to set fees that reasonably correspond to program costs, not to use fee schedules as a backdoor way to discourage participation in a licensed activity. If a fee increase that size can't be explained by actual administrative expense, it starts looking less like cost recovery and more like a deterrent dressed up as a user fee.

The plaintiffs are presenting this as a second, independent legal defect — meaning even if a court somehow upholds DSHS's authority to redefine total THC the way it did, the fee increases could still be struck down on their own separate grounds. That's a smart litigation strategy: it gives the court two distinct paths to rule against the agency instead of betting everything on one argument. For smaller manufacturers and retailers already squeezed by the THCA rule, the fee hikes are arguably the more immediate financial threat, since they hit every registered business regardless of whether its products survive the total-THC math.

A Second Front in a Bigger Legal Battle

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This new lawsuit doesn't exist in isolation — it's the second major legal front against the same set of DSHS rules. The first challenge came in April 2026, filed by the Texas Hemp Business Council, Hemp Industry & Farmers of America, and other industry groups, attacking the total THC rule on broader grounds.

That earlier case produced real, if temporary, relief. A Travis County judge granted a temporary injunction on May 1, 2026, blocking the rule from taking effect. The win didn't last: the Fifteenth Court of Appeals lifted that injunction on June 5, 2026, and the Total THC rule has been enforceable ever since. Oral argument in that appellate case, styled Texas DSHS v. Texas Hemp Business Council, is scheduled for Dec. 8, 2026 — a date that now looms over both legal fights at once.

Notably, the Texas Hemp Constitutional Alliance and Green Nation weren't new to this fight before filing their own suit. On Oct. 1, 2026, they filed a 32-page amicus brief supporting the pending appellate case, laying out much of the same legal reasoning they're now bringing directly as plaintiffs. Filing their own lawsuit less than three weeks later suggests they decided supporting someone else's case wasn't enough and they wanted their own seat at the table.

Adding to the regulatory tangle, Texas separately began enforcing reinstated 2021 rules on July 31, 2026, that schedule delta-8, delta-10, THCP and similar compounds as controlled substances. That's a distinct legal track from the THCA/total-THC dispute, but it compounds the uncertainty facing hemp businesses trying to figure out which products remain legal to sell and under what testing standard.

What's at Stake for Texas' Hemp Market

None of this is playing out in the abstract. Texas' hemp-derived cannabinoid market was estimated at $5.5 billion in 2025, built on a retail and manufacturing ecosystem that includes thousands of storefronts across the state selling THCA flower and related smokable products. Those businesses are the ones with the most immediate exposure if the total-THC rule survives both the appellate case and this new lawsuit intact.

The December oral argument is likely to be the more consequential near-term event, since the Fifteenth Court of Appeals' ruling in Texas DSHS v. Texas Hemp Business Council will almost certainly shape how the newer Texas Hemp Constitutional Alliance case proceeds, whether that's through direct legal precedent or simply by signaling how receptive Texas courts are to challenging DSHS's rulemaking authority on this issue.

For now, operators, retailers and everyday consumers should treat the current enforceability of the total-THC rule as the operating reality, not as something settled or likely to stay fixed for long. Given how quickly the legal status has flipped already — injunction granted in May, lifted in June, new lawsuit filed in October — anyone buying, selling or manufacturing hemp products in Texas should confirm current state and local rules before making decisions, since what's legal this month isn't guaranteed to stay legal next month.

Strip away the fee schedules and the decarboxylation chemistry, and what's left is a fairly basic constitutional question: can a state health agency redefine a term the legislature already defined in statute, and in doing so functionally outlaw an entire product category that lawmakers never actually banned? DSHS says its math reflects real pharmacological conversion. The plaintiffs say that's not the agency's call to make through rulemaking, no matter how defensible the chemistry sounds.

With oral argument set for Dec. 8 in the original appellate case and this second lawsuit now working its way through Travis County District Court, Texas hemp policy is effectively being written in courtrooms right now, not in the statehouse. That's an unusual place for an industry worth billions of dollars to have its ground rules decided, but it's where things stand.

Whichever way these cases break, the pattern over the past year — injunction, reversal, new rules, new lawsuits, reinstated controlled-substance schedules — points toward continued volatility rather than a clean resolution anytime soon. Hemp businesses in Texas would do well to plan for more of the same.