Texas Cannabis Regulations

Regulatory Agency: Texas Department of State Health Services (DSHS)  ·  Regulations checked: March 26, 2026

Cannabis Landscape Overview

Texas operates a limited medical cannabis program through the Compassionate Use Program (CUP), originally established by the Compassionate Use Act (SB 339) in 2015. The program was initially restricted to intractable epilepsy patients and allowed only very low-THC cannabis oil (0.5% THC). HB 3703 in 2019 expanded qualifying conditions and raised the THC cap to 0.5%, and HB 1535 in 2021 further expanded the program by adding PTSD and cancer as qualifying conditions and raising the THC cap to 1%.

The Texas Department of State Health Services (DSHS) oversees the Compassionate Use Registry and licensing. As of 2026, qualifying conditions include epilepsy, seizure disorders, multiple sclerosis, spasticity, ALS, autism, terminal cancer, PTSD, and other incurable neurodegenerative diseases. The 1% THC cap remains one of the lowest in the nation for states with medical programs. Only three licensed dispensing organizations operate statewide, each vertically integrated. Hemp-derived CBD products with 0.3% THC or less are also widely available through general retail.

Packaging Requirements

Compassionate Use Program Standards

• All low-THC cannabis products must be dispensed in child-resistant, tamper-evident packaging
• Packaging must be pharmaceutical-grade and opaque
• Products must be sealed at the licensed facility before dispensing
• No packaging that appeals to minors or resembles commercial food or candy products
• Containers must be suitable for the product form (oral, topical, etc.)

Product Form Limitations

• Products are limited to non-smokable forms: oils, tinctures, capsules, lozenges, topicals, and liquid suspensions
• No flower, edibles in candy form, or smokable products are permitted

Labeling Requirements

Mandatory Information

• Dispensing organization name, address, and license number
• Patient name and Compassionate Use Registry number
• Product type and form
• THC content per dose and per container (must not exceed 1%)
• CBD content per dose and per container
• Net weight or volume
• Batch number linked to lab testing results
• Date dispensed and expiration date
• Dosage instructions as specified by the prescribing physician
• Texas CUP identification mark

Required Warnings

• "For use only by a registered patient under the Compassionate Use Program"
• "Keep out of reach of children"
• "May cause drowsiness or impairment"
• "Not approved by the FDA"

Advertising Rules

Texas strictly limits advertising by Compassionate Use Program dispensing organizations. Licensees may maintain basic signage at their licensed dispensing locations and operate informational websites. Advertising on television, radio, and billboards is effectively prohibited. Digital advertising beyond the licensee's own website is restricted. No advertising may target individuals under 21 or make therapeutic claims beyond the approved qualifying conditions. All public-facing materials must include the dispensing organization's license number and comply with DSHS guidelines.

Licensing Overview

Texas issues an extremely limited number of dispensing organization licenses—currently three—each of which is vertically integrated, handling cultivation, processing, and dispensing. The DSHS administers the licensing process, which involves extensive application review, facility inspections, background checks, and financial documentation. The limited number of licenses has been a point of significant criticism, with advocates arguing it restricts patient access, particularly in a state as large as Texas. License holders must maintain seed-to-sale tracking, comply with regular DSHS inspections, and submit all products for third-party laboratory testing. Legislative efforts to expand the number of licenses and raise the THC cap continue each session.

Cannabis Taxes in Texas (2026)

Texas cannabis businesses collect and remit multiple overlapping taxes. Below is a summary of the rates that apply to retail cannabis sales as of 2026. Regulatory agency: Texas Department of Public Safety (licensing) + Department of State Health Services.

• Excise tax: No cannabis excise tax
• Sales tax: 6.25% state sales tax + typical 1–2% local sales tax applies to low-THC medical purchases
• Local cannabis tax: No additional local cannabis tax
• Medical exemption: Texas operates a limited Compassionate Use Program (CUP) for low-THC (≤1%) medical cannabis oil; no adult-use or full medical program
• Effective combined rate: 7.25–8.25% on low-THC medical purchases

Only three licensed dispensing organizations serve the entire state under the CUP.

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