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Texas Register Preamble


The Executive Commissioner of the Texas Health and Human Services Commission (HHSC), on behalf of the Department of State Health Services (DSHS), adopts new §§300.100 - 300.104; 300.201 - 300.203; 300.301 - 300.303; 300.401 - 300.404; 300.501 and 300.502; and 300.601 - 300.606, concerning the Manufacture, Distribution, and Retail Sale of Consumable Hemp Products.

Sections 300.101, 300.201, 300.301, 300.303, 300.402, and 300.601 are adopted with changes to the proposed text as published in the May 8, 2020, issue of the Texas Register (45 TexReg 3010) and will be republished. Sections 300.100, 300.102 - 300.104; 300.202 and 300.203; 300.302; 300.401, 300.403 and 300.404; 300.501 and 300.502; and 300.602 - 300.606 are adopted without changes to the proposed text as published in the May 8, 2020, issue of the Texas Register (45 TexReg 3010) and therefore will not be republished.

BACKGROUND AND JUSTIFICATION

The adoption complies with House Bill (H.B.) 1325, 86th Legislature, Regular Session, 2019, which added Texas Health and Safety Code, Chapter 443, relating to the manufacture, distribution, and sale of consumable hemp products.

Under the authority of Texas Health and Safety Code, Chapter 443, DSHS regulates the manufacture, processing, distribution, and sale of consumable hemp products. Consumable hemp product regulations are intended to ensure that consumable hemp products are safe to consume and properly labeled. DSHS requires and issues a license for the manufacture, processing, and distribution of consumable hemp products, and a registration for retailers of consumable hemp products containing cannabinoids.

PUBLIC COMMENT

The 31-day comment period ended June 8, 2020.

During this period, DSHS received comments regarding the proposed rules from 1,726 commenters, some with multiple comments. A summary of comments relating to the rules and DSHS's responses follows.

Businesses submitting comments and represented in the individual comments include: Texas Hemp Growers' Association; Rich Global Hemp; Crown Distributing; Happy Hippy Haus Cannabis Dispensary; (ten) American Shaman locations; Hemp Texas Organization; Elevated Wellness CBD; Natural Ways CBD; Sacred Leaf; TPAGE ENTERPRIZES LLC; NAVA POUCH, INC.; Grandma Deb's CBD; Aggieland CBD; Bless Your Body Massage; Integrity Lifestyle Center LLC; Whole Life Holistic's; CBD Sacred Leaf Zero; Sunfire Nutrition; Oils R Us; Subling Well; A2LA; EXHEMPLARY LIFE.com; Clean Remedies; Ability Solutions; 5 Royal Trees; Sacred Leaf Wellness Studio; Genuine Hemp Oils; Jessie Water Store; Sinsemilla LLC; Texas Hemp Industries; BillCo; Chai Life CBD; Green Cross; Prolific Brands; Texas Botanicals; Flower of Hope; PuffnPretty; Releaf Downtown; Triple S Tree Farm; Forty Texas Hemp Company; Sundown Farms; Xochicalli Gardens; Hill Country Pharm Haus; American Shaman of Cedar Hill; Mora Hemp LLC; Natural Health Products; Hotzen Hemp; Gruene Leaf; Angel Botanicals; Hill Country Pharm Haus; Early Fruit Hemp Co; Revive Farming Technologies; Green Mountain flower.com; Hill Country Harvest Farm LLC; 5W Land & Cattle; West Texas Hemp LLC.; Twenty Something SA; Grassroot Botanicals LLC; CANYON HEMP COMPANY; Gruene Cross Kyle; CBD Country; Ziggy Boone Farms; Royal Organix; Precision Engraving; Legal Loud CBD; Texas Star Hemp Farms; Hopewell Farms; The CBD Store By Nature Pure Life; Southwest Crop Consultants; The Emerald Triangle CBD; Whole Organix; Green Wellness; Euphoria Botanicals; Better Body Healthy You; Cornbread Hemp; Surterra Texas; Crown Distributing LLC; Sweet Island Botanicals; Austin Insurance Group; Grand Avenue Compounding Pharmacy; Analytical Food Laboratories; Coats and Rose Law Firm; and the Texas Medical Association.

Comment: A commenter disagreed with statement (8) under the "Government Growth Impact Statement" in the proposed preamble, stating that there will be no positive economic benefit to the State of Texas if the ban on smokable hemp products remains in rule.

Response: DSHS disagrees with the commenter and declines to revise the preamble. H.B. 1325 requires DSHS to develop rules regulating the manufacture, distribution, and sale of consumable hemp products. This legislation authorizes an expansion of hemp agriculture and creates an expanded hemp products inventory manufactured and sold in the State of Texas, thereby resulting in positive economic benefits.

Comment: A commenter encouraged DSHS to consider rules allowing farmers to sell consumable hemp products directly to the public from farms and through farmers' markets.

Response: DSHS does not agree that a rule change is necessary to address the sale of consumable hemp products from a farm. If a farm manufactures a consumable hemp product, the owner will be required to acquire a consumable hemp manufacturer/distributor license from DSHS and register as a consumable hemp retailer with DSHS to sell consumable hemp products from the farm, at a farmer's market, or directly to a consumer.

Comment: Seven commenters recommended the State of Texas not adopt rules concerning the production or sale of hemp products.

Response: DSHS disagrees with these commenters. H.B. 1325 (Texas Health and Safety Code, Chapter 443) requires DSHS to develop rules regulating the manufacture, distribution, and sale of consumable hemp products.

Comment: Four commenters requested rules to legalize marijuana in the state of Texas.

Response: DSHS considers these comments outside the scope of rulemaking for this chapter. H.B. 1325 (Texas Health and Safety Code, Chapter 443) requires DSHS to develop rules regulating the manufacture, distribution, and sale of consumable hemp products in Texas. H.B. 1325 contains no authorization for the legalization of marijuana in Texas.

Comment: A commenter requested revision and clarification throughout the proposed rules of the term "processor" as opposed to the term "manufacturer."

Response: DSHS does not agree with the commenter and declines to revise the proposed rules. DSHS followed Texas Health and Safety Code, Chapters 443 and 431 in the definitions of "processor" and "manufacturer."

Comment: A commenter requested that the defined terms for gas chromatography, good manufacturing processes, high performance liquid chromatography (HPLC), and non-consumable hemp processor in §300.101 be removed because they are not used within the body of the rules.

Response: DSHS agrees with the commenter and accordingly deletes the definitions from §300.101.

Comment: A commenter requested retaining language from H.B. 1325 regarding the inclusion of "institutions of higher education" in the definition of "accredited laboratory."

Response: DSHS agrees with the request and accordingly revises the proposed rule text in §300.101(2) and §300.303(f) to add "including at an institution of higher education."

Comment: A commenter disagreed with the definition of the term "consumable hemp product," stating that it deviates from the statute definition and does not include language related to distribution and sale and does not capture the notion of human consumption.

Response: DSHS disagrees with the commenter and declines to revise §300.101(8). The statute refers to the definitions of "food, drug, cosmetic, and device" in Texas Health and Safety Code, Chapter 431. The definition of "drug" in Texas Health and Safety Code, Chapter 431 includes drugs for animals. Therefore, the definition of consumable hemp product in the proposed rule cannot refer strictly to human consumption.

Comment: A commenter requested an exception to the definition of "consumable hemp product" at §300.101(8) for intermediate products in the extraction process that may have a delta-9 tetrahydrocannabinol (THC) content exceeding 0.3%.

Response: DSHS does not agree with the commenter and declines to revise the proposed rule. The definition of consumable hemp product in the Texas Health and Safety Code, Chapter 443 refers to the definitions of food, drugs, cosmetics, and devices in Texas Health and Safety Code, Chapter 431, which, along with the definition of "manufacture," includes in-process product that is not necessarily consumer-ready. Furthermore, DSHS has no authority to allow intermediate or finished products to exceed 0.3% THC.

Comment: A commenter stated that the term "distributor" is not clearly defined and that "distributors" should be required to obtain a retail registration instead of a manufacturer/distributor license.

Response: DSHS disagrees with the commenter and declines to revise the rule. Section 300.101(12) clearly defines the term "distributor" as "a person who distributes consumable hemp products for resale" as opposed to a retail outlet that sells to consumers.

Comment: A commenter requested revision of the proposed definition of "independent contractor" located at §300.101(20) to include wholesale distributors.

Response: DSHS disagrees with the commenter and declines to revise the proposed rule. The proposed rule follows the statute, Texas Health and Safety Code, §443.2025(b) and (d), that allows a registration exemption for independent contractors of retail registrants.

Comment: A commenter requested a revision of the defined term "license holder" to clarify and clean up the definition in §300.101(21).

Response: DSHS disagrees with this commenter and declines to revise the proposed definition. DSHS considers the definition of "license holder" to be stated with sufficient clarity in the rule.

Comment: A commenter requested that the defined term "lot number" in §300.101(22) be revised to "lot" because "lot number" is not used in the body of the proposed rule but "lot" is used.

Response: DSHS agrees with the commenter that there is an inconsistency and revised the rule text to remove the word "identification" from §300.402(a)(1) to state "lot number." This clears up the inconsistency, to which the commenter refers, between §300.101(22) and §300.402(a)(1).

Comment: A commenter requested a revision to proposed §300.103 for clarity and remove duplicative language.

Response: DSHS disagrees with the commenter and declines to make the revision. DSHS considers the rule to be stated with sufficient clarity, which is aided by the duplicative language.

Comment: 1690 commenters opposed the prohibition of the retail sale of smokable hemp products contained in §300.104. Of the total, 1,425 comments were in form of emails, 184 were emails from individuals, one was by letter, 10 were by telephone, and 70 were emails from businesses.

Reasons for opposition to the prohibition of the retail sale of smokable hemp products contained in §300.104 include:

-A deleterious effect on the overall Consumable Hemp Product business in Texas, particularly on those businesses already selling the products.

-A negative impact on individuals who depend on smoking for rapid delivery of cannabidiol (CBD) to relieve medical conditions.

-Lack of authority for DSHS to include the retail ban in the proposed rule when it was not included in the language of Texas Health and Safety Code, Chapter 443.

-Lack of constitutionality under the Texas Farm Bill.

Response: DSHS disagrees with these commenters. H.B. 1325 (Texas Health and Safety Code, Chapter 443) requires DSHS to develop rules regulating the manufacture, distribution, and sale of consumable hemp products. DSHS cannot reasonably approve the retail sale of products of which H.B. 1325 clearly prohibits the manufacture in Texas Health and Safety Code, §443.204(4). DSHS considers the retail ban in proposed §300.104 a logical extension of the manufacturing ban in Texas Health and Safety Code, §443.204(4). No change was made to the rule in response to these comments.

Comment: Two commenters supported the prohibition of the retail sale of smokable hemp products contained in §300.104. One commenter's reason is due to the burden placed on law enforcement officers in the field when faced with the need to distinguish between smokable hemp flower and marijuana. The other commenter's reason is due to the negative impact of smoking on the health of the smokers.

Response: DSHS agrees with the commenters and is not removing the prohibition of the retail sale of smokable hemp products contained in §300.104.

Comment: One commenter requested that DSHS not remove hemp flower. The comment is brief, and the commenter does not indicate whether the intention is to use hemp flower for smoking or as a food product.

Response: DSHS does not agree with the commenter and declines to revise the rule. Properly tested and labeled hemp flower, marketed for use other than smoking (e.g. as a tea or a food additive) does not fall under the retail ban contained in §300.104.

Comment: A commenter requested revision of proposed §300.201(b) by including "hemp-derived products" in the rule text to make it consistent with §300.201(a).

Response: DSHS agrees with the commenter and revised the proposed rule text to remove the phrase "hemp-derived" from §300.201(a). The phrase is superfluous, since all products required to hold the license are consumable hemp products.

Comment: A commenter requested clarification on how a location will be required to be described in the application for a consumable hemp products license as required under proposed §300.201(b)(1). Additionally, the commenter requested clarification on how a location will be required to be described for independent contractors.

Response: DSHS disagrees with the commenter and declines to make the revision. The proposed rule follows Texas Health and Safety Code, §443.103(1).

Comment: Three commenters suggested that disqualification for a manufacturer/distributor license due to a felony drug conviction within the previous ten years (§300.201(c)) unfairly impacts minority applicants, who have been "disproportionately criminalized." One of the commenters suggested that five years would be better. The same commenter made comments regarding certain Texas Department of Agriculture (TDA) requirements for farmers.

Response: The disqualification due to a felony drug conviction in the previous ten years is statutory and found in Texas Health and Safety Code, §443.102(a)(1). DSHS declines to revise the proposed rule. Comments regarding TDA requirements for farmers are outside the scope of DSHS rulemaking.

Comment: Five commenters opposed §300.202, License Term and Fees, and §300.502, Application, requiring payment of fees for licensure and registration for the manufacture, distribution, and retail sale of consumable hemp products.

Response: DSHS does not agree with the commenters and declines to revise the rule. H.B. 1325 (Texas Health and Safety Code, Chapter 443) authorizes DSHS to collect fees under Texas Health and Safety Code §443.103, Application; Issuance, and §443.2025, Registration Required For Retailers Of Certain Products. Furthermore, Texas Health and Safety Code, Chapter 12, §12.0111, requires DSHS to adopt and collect a fee for issuing or renewing a license to allow DSHS to recover DSHS's direct and indirect costs.

Comment: Four commenters recommended revision of proposed §300.301 to require specific analytical techniques.

Response: DSHS does not agree with the commenters and declines to revise the proposed rule. Texas Health and Safety Code §443.202 and §443.151 do not prescribe testing methods.

Comment: A commenter requested revision of §300.301(a) and §300.303(l), suggesting that the language is vague and implies that every consumable hemp product must be tested for every substance listed in Table 1.

Response: While DSHS does not agree with the commenter, the language has been revised to note that testing can be done for substances that are appropriate for the product and process.

Comment: A commenter requested revision of §300.301 to delete Campylobacter and Yersinia from the list of pathogens in Table 1 at §300.303(l), stating that these are unnecessary tests for the kinds of products expected to be produced. The commenter also states that the language contained in §300.301(a)(3) implies that every product must be tested for all the pathogens in Table 1.

Response: DSHS disagrees with this commenter and declines to make the requested revision. The requirement in §300.301(a)(3) to test for "harmful pathogens" is deliberately broad to address multiple products, processes, and environmental contaminants. It should be noted §300.303(l) states, directly preceding Table 1, that "the department may utilize the table to test consumable hemp products." It does not state that the department will test every consumable hemp product for every substance or pathogen on the table.

Comment: A commenter requested revision of proposed §300.301(b)(1) to remove awkwardness of expression, stating that a firm cannot manufacture or process "into commerce."

Response: DSHS does not agree with the commenter's reading of the passage in question and declines to make the revision.

Comment: One commenter requested clarification of language in §300.301(b) regarding whether a Certificate of Analysis must show the results of all testing conducted for a product or only the presence and content of CBD and THC.

Response: DSHS agrees and has deleted §300.301(b)(2) to clear up the contradiction.

Comment: A commenter requested that DSHS revise the proposed §300.302(b)(1) to allow 10% THC content.

Response: DSHS does not agree with the commenter and declines to revise the proposed rule. The requirement for a THC content not to exceed 0.3% is set in statute, Texas Health and Safety Code, Chapter 443.

Comment: A commenter requested that DSHS include safety requirements for extraction facilities in Subchapter C of the proposed rules.

Response: DSHS does not consider this within the scope of current requirements contained in Texas Health and Safety Code, Chapter 443. These requirements fall within the jurisdiction of other agencies, such as the Occupational Safety and Health Administration and local fire departments. DSHS is not opposed to the development of guidance documents for this purpose outside the framework of the rules.

Comment: One commenter opposed the requirement for the use of QR (Quick Response) codes on labeling in §300.402.

Response: DSHS disagrees with the commenter and declines to revise the rule. The statute allows, but does not require, the use of QR codes and uniform resource locators (URLs) in Texas Health and Safety Code, §443.205.

Comment: One commenter opposed local enforcement of labeling on consumable hemp products.

Response: DSHS does not agree that a rule change is necessary. The statute, Texas Health and Safety Code, §443.003 does not permit regulation of consumable hemp products by local regulatory agencies.

Cont'd...

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