A leading economist has warned that the recent federal ban on THC in hemp products represents a potentially devastating blow to Texas's thriving hemp sector. This legislative action, included in the legislation that ended the government shutdown, drastically lowers the legal limit for THC in hemp-derived goods, effectively undermining the legality of intoxicating products.

While a bipartisan group of state attorneys general supports the ban as a necessary measure to plug a loophole from the 2018 Farm Bill, Texas Attorney General Ken Paxton was notably absent from this coalition, despite strong state-level advocacy from Lt. Gov. Dan Patrick and Texas lawmakers seeking to prohibit such products.

Texas leads the nation in hemp production, according to the USDA. Economist Beau Whitney estimates the state's hemp industry employs approximately 53,000 people and generates $2.1 billion in wages. Whitney predicts the ban will cause roughly 6,350 Texas businesses to shut down and displace 40,000 workers, significantly harming the state's economy through lost tax revenue and consumer spending. He emphasizes that these workers contribute via payroll, business, and sales taxes.

The legislation could also severely discourage hemp cultivation. Whitney highlights the uncertainty and risk as major factors driving farmers and investors away from the industry, potentially halting investment needed for the infrastructure supporting the demand for hemp in non-intoxicating applications like automotive parts, plastics, and construction materials. He further warns that hemp is often rotated with other crops like soy, corn, wheat, and cotton, so the ban could negatively impact those industries as well.

Scheduled to take effect in November 2026, Whitney anticipates states may enact their own prohibitions sooner to comply. He described the potential outcome as an "extinction-level event" for the Texas hemp industry, saying it would set the sector back by decades if the ban holds.