For years stifled by law, Texas’ medical cannabis industry is poised for growth in 2026 due to increased patient eligibility and product access.
But as major marijuana operators try to enter the Lone Star State for the first time, the estimated $5 billion market for hemp-derived THC still raises questions that both lawmakers and marijuana businesses must answer.
For nearly ten years, the only product available to epilepsy patients enrolled in the Texas Compassionate Use Program (TCUP) was very low THC oil obtained from only three licensed businesses, or supply organizations.
That led to criticism from cannabis advocates that the TCUP, enacted in 2015, was so restrictive that it was useless — to patients and businesses.
One of the three agencies in Texas had been “underperforming” for several years, according to the Texas Department of Public Safety.
Limited legal access to cannabis has contributed to the explosive growth of hemp-derived THC in the state, as frustrated patients — and would-be patients — abandon TCUP’s THC-based hemp products available online and at many brick-and-mortar locations.
A major expansion of Texas medical marijuana
In response, last June, Texas Gov. Greg Abbott signed into law House Bill 46, a broad expansion of medical marijuana.
Under the new rules, completed this fall:
- Cannabis products can now contain up to 10 milligrams of THC per dose, no more than 1000 milligrams (one gram) per pack.
- The number of licenses available for direct integrated businesses for supply organizations has increased from 3 to 15, with permits to be issued on April 1.
- Eligible conditions for patients now include chronic pain and chronic diseases, with the ability to add additional conditions without passing new legislation.
In addition to the oil, patients have access to topical lotions, patches, suppositories, and prescribed inhalers and breathing devices.
The smoky flower has not yet been found, it maintains a worldly way of caution, which is incompatible with fun.
Texas makes cannabis THC available, but hemp THC remains
Abbott signed the TCUP extension into law before opposing a separate effort, led by Lt. Gov. Dan Patrick, to specifically ban THC products derived from hemp.
The governor then issued an executive order in September directing state agencies to regulate hemp THC products like alcohol, including age restrictions and mandatory ID checks.
That resulted in a victory lap for the Texas hemp industry that may have been short-lived.
The pending federal ban, signed into law by President Donald Trump late last year and set to take effect in November 2026, has left the hemp business in a state of uncertainty.
This is important since the large Texas hemp industry provides more access to THC than the medical system.
That said, the hemp industry has not had a negative impact on patient growth at TCUP as supply organizations have complained about declining sales.
Is medical marijuana patient registration on the rise in Texas?
Patient enrollment stands at 135,470 by the end of 2025, a year-over-year increase of nearly 32% driven in part by growing awareness of TCUP.
Starting in 2023, monthly enrollment growth has averaged a respectable 3%, including 100,000 new patients in Texas since then.
While Texas’ medical marijuana program is growing, it remains small compared to programs in other populous states, such as Florida and Pennsylvania, which have 890,000 and 444,000 patients, respectively.
Of the 31 million people in Texas, less than 0.5% are enrolled in TCUP. That’s well below the national average for medical marijuana patient enrollment of 2.1% found in a 2024 study sponsored by the National Institutes on Drug Abuse.
Both Florida and Pennsylvania offer access to a wide range of THC products, including smokeable flower and basket-dominant pre-rolls.
Patient growth is at least partly dependent on physicians. According to the Texas Tribune, only about 800 of Texas’ approximately 80,000 board-certified physicians are enrolled in the program.
That may change after Trump’s Dec. 18 order directing the Justice Department to complete the reclassification of marijuana to Schedule 3, the category that recognizes marijuana as a medicine, while also calling for more marijuana research.
Major multistate marijuana operators are turning to Texas
Last month, the Texas Department of Public Safety also conditionally approved nine new dispensary licenses under the expanded program.
Similar to how medical marijuana is regulated in Virginia, each licensee will be limited to a specific area.
Businesses seeking permits, which have yet to be finalized, include multi-batch cannabis companies Trulieve Cannabis Corp. and Verano Holdings, a strong sign that national cannabis industry players are finally interested in Texas as the medical market emerges.
“We look forward to putting plants in the ground that are grown in Texas, by Texans, and delivered to patients across the country, in compliance with the law,” George Archos, CEO of Verano, told the Texas Tribune.
Exact sales figures remain a guarded secret in Texas. The state’s Department of Public Safety (DPS), which administers the program, did not respond to requests for comment from MJBizDaily.
And sales figures were not published in the landmark 2024 report analyzing TCUP’s performance.
The largest medical cannabis campus in Texas is opening near Austin
Existing Texas organizations are betting on growth.
In December, Texas Original opened the state’s largest cannabis facility: a 75,000-square-foot campus near Austin that will allow the company to increase its production capacity by “20x,” Texas CEO Nico Richardson said. MJBizDaily.
The TCUP expansion also allows operators to roll out satellite locations, enabling same-day pickup and extended delivery services.
Texas Original currently has 17 pickup locations, a satellite location in South Austin, and “a lot of development,” Richardson said.
“We are ready to meet the demand,” he said in an emailed statement.
“As House Bill 46 expands the eligibility criteria and delivery methods, we expect to grow even more and be positioned to serve Texans safely and responsibly.”
The $5.5 billion THC question of hemp is facing Texas medical marijuana
Despite these benefits, the ongoing question of hemp-derived THC remains unresolved.
Agriculture Commissioner Sid Miller has called on Congress to lift the ban on hemp THC, warning of its potential impact on Texas businesses.
But in the meantime, federal agencies have proposed raising fees for certain hemp companies by nearly 13,000%, The Tribune reported.
According to the Tribune, under draft rules unveiled in late December, a hemp producer’s license will cost $25,000 per property per year – up from $250 – and a retail permit will cost $20,000 per property per year, up from $150.
The new inspection rules will also effectively ban flower as a source of manufactured end products. That would leave synthetically derived THC, such as delta-8 THC found in CBD or delta-10 THC as alternatives, critics say.
Andrew Long and Chris Roberts contributed to this report.
