TITLE 25. HEALTH SERVICES

PART 1. DEPARTMENT OF STATE HEALTH SERVICES

CHAPTER 300. MANUFACTURE, DISTRIBUTION, AND RETAIL SALE OF CONSUMABLE HEMP PRODUCTS

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.

Comment: A commenter stated that language in proposed §300.402(a) is narrower than the language in the analogous section of the statute, Texas Health and Safety Code, §443.205(a). The result is that the proposed language might give the impression that only consumable hemp products containing CBD need to comply with the packaging and labeling requirements. This would conflict with the statute, which requires compliance from any consumable hemp product that contains or is marketed as containing "more than trace amounts of cannabinoids."

Response: DSHS agrees with the commenter and has revised §300.402(a) to be more consonant with the language in Texas Health and Safety Code, §443.205(a).

Comment: A commenter requested that proposed §300.402 be revised because the labeling requirements as written would affect the ability of companies to "white-label" (i.e. private label) consumable hemp products. The commenter stated that the rule may lead to a loss of competitive advantage as the label would require the "white label" product to reveal their source.

Response: DSHS disagrees with the commenter and declines to make the revision. Texas Health and Safety Code, §443.205(a)(5) requires the name of the manufacturer.

Comment: A commenter requested language in §300.402 requiring that consumable hemp product labels be prominently placed and highly visible. The same commenter requested language requiring warning labels for pregnant or breast-feeding women.

Response: The labeling requirements in the proposed rule follow the labeling requirements in Texas Health and Safety Code, §443.204. DSHS declines to revise the rule.

Comment: A commenter requested that DSHS include additional options for the disposal of an article that meets schedule I drug due to THC content.

Response: DSHS does not agree with the commenter and declines to revise the rule. DSHS will follow statutory guidance to work with the Texas Department of Public Safety for the disposition of consumable hemp products with confirmed THC content exceeding 0.3%.

Comment: A commenter requested a clarification regarding whether e-commerce is covered by this chapter as it is not addressed in the rules.

Response: The statute makes no distinction between brick-and-mortar commerce and e-commerce. Therefore, e-commerce, like brick-and-mortar, with a recipient in Texas is required to obtain a license or registration from DSHS and to comply with Texas Health and Safety Code, Chapter 443 as well as this chapter.

Comment: A commenter requested that DSHS consider adding a laboratory licensing or registration requirement to the proposed rules.

Response: DSHS disagrees with the commenter and declines to make the revision. Texas Health and Safety Code, Chapter 443 does not give DSHS authority to license or register laboratories to conduct testing of consumable hemp products.

Comment: A commenter requested more definitive and prescriptive testing standards and requirements, so they are clear to all laboratories, license holders, and registrants.

Response: DSHS disagrees with the commenter and declines to make the revision. The proposed testing requirements are designed to be minimum standards. Businesses may conduct more robust testing at their own discretion.

Comment: A commenter requested a revision of the fee structure for registrants with multiple locations. The commenter stated that the fees for large scale retailers would be exorbitant and recommended a tiered fee system for registrants with a significant number of locations.

Response: DSHS disagrees with the commenter and declines to make the revision. License or registration fees for each location is consistent with the method operated by other DSHS licensing programs.

Comment: A commenter expressed concern over Subchapter F in the proposed rules related to enforcement. The commenter stated that the penalty for acting in violation of the requirements are not clear and asked if any violations of the proposed rules would result in criminal enforcement action.

Response: DSHS does not agree with the commenter and declines to make the revision. DSHS will publish an administrative penalty matrix in the Texas Register in the future. All enforcement action taken by DSHS is administrative or civil rather than criminal.

Comment: One commenter opposed the registration requirements in §300.502 for out-of-state sellers.

Response: DSHS disagrees with the commenter and declines to revise the rule. The requirement is statutory. Texas Health and Safety Code, §443.2025(b) clearly states that the retail sale of consumable hemp products containing CBD in Texas requires a retail registration. The statute does not distinguish between in-state and out-of-state retailers.

Comment: A commenter noted that §300.602(1) appears to make it illegal for a consumable hemp product contained in a package to be in commerce.

Response: DSHS agrees with the commenter and revises §300.602(1) and (2) for greater clarity.

Comment: A commenter suggested that the notice of violation contained in §300.606(e) be by email as well as certified mail.

Response: The proposed language requiring the notice of violation to be sent by certified mail is consistent with current DSHS compliance procedures. DSHS declines to revise the rule.

A minor editorial change was made to §300.601(a)(1) to correct a reference title to §300.201.

SUBCHAPTER A. GENERAL PROVISIONS

25 TAC §§300.100 - 300.104

STATUTORY AUTHORITY

The new rules are authorized by H.B. 1325 that added Texas Health and Safety Code, Chapter 443, which provides that the Executive Commissioner of HHSC may adopt rules for the efficient enforcement of Texas Health and Safety Code, Chapter 443; and Texas Government Code, §531.0055 and Texas Health and Safety Code, §1001.075, which provides that the Executive Commissioner of HHSC shall adopt rules for the operation and provision of health and human services by DSHS and for the administration of Texas Health and Safety Code, Chapter 1001.

§300.101.Definitions. The following words and terms, when used in this chapter, have the following meanings unless context clearly indicates otherwise:

(1) Acceptable hemp THC level--A delta-9 tetrahydrocannabinol content concentration level on a dry weight basis, that, when reported with the accredited laboratory's measurement of uncertainty, produces a distribution or range that includes a result of 0.3 percent or less.

(2) Accredited laboratory--A laboratory, including at an institution of higher education, accredited in accordance with the International Organization for Standardization ISO/IEC 17025 or a comparable or successor standard.

(3) Act--House Bill 1325, 86th Legislature, Regular Session, 2019, relating to the production and regulation of hemp in Texas, codified in Texas Health and Safety Code, Chapter 443.

(4) Analyte--A chemical, compound, element, bacteria, yeast, fungus, mold, or toxin identified and measured by accredited laboratory analysis.

(5) Approved hemp source--Hemp and hemp products grown for human use and consumption produced under a state or a compatible federal, foreign, or Tribal plan, approved by the United States Department of Agriculture under 7 United States Code (U.S.C.) Chapter 38, Subchapter VII, or Texas Agriculture Code, Chapter 121, or in a manner that is consistent with federal law and the laws of respective foreign jurisdictions.

(6) Cannabidiol (CBD)--A phytocannabinoid identified as an extract from cannabis plants.

(7) Certificate of Analysis (COA)--An official document released by the accredited laboratory to the manufacturer, processor, distributor, or retailer of consumable hemp products, the public, or department, which contains the concentrations of cannabinoid analytes and other measures approved by the department, to also include data on levels of THC and state whether a sample passed or failed any limits of content analysis.

(8) Consumable hemp product (CHP)--Any product processed or manufactured for consumption that contains hemp, including food, a drug, a device, and a cosmetic, as those terms are defined by Texas Health and Safety Code, §431.002, but does not include any consumable hemp product containing a hemp seed, or hemp seed-derived ingredient being used in a manner that has been generally recognized as safe (GRAS) by the FDA.

(9) Consumable hemp products license--A license issued to a person or facility engaged in the act of manufacturing, extracting, processing, or distributing consumable hemp products for human consumption or use.

(10) Delta-9 tetrahydrocannabinol (THC)--The primary psychoactive component of cannabis. For the purposes of this chapter, the terms delta-9 tetrahydrocannabinol and THC are interchangeable.

(11) Department--Department of State Health Services.

(12) Distributor--A person who distributes consumable hemp products for resale, either through a retail outlet owned by that person or through sales to another retailer. A distributor is required to hold a consumable hemp products license.

(13) Facility--A place of business engaged in manufacturing, processing, or distributing consumable hemp products subject to the requirements of this chapter and Texas Health and Safety Code, Chapter 431. A facility includes a domestic or foreign facility that is required to register under the Federal Food, Drug, and Cosmetic Act, Section 415 in accordance with the requirements of 21 Code of Federal Regulations Part 1, Subpart H.

(14) FDA--The United States Food and Drug Administration or its successor agency.

(15) Federal Act--Federal Food, Drug, and Cosmetic Act (Title 21 U.S.C. 301 et seq.).

(16) Hemp--The plant, Cannabis sativa L. and any part of that plant, including the seeds of the plant and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol content concentration level on a dry weight basis, that, when reported with the accredited laboratory's measurement of uncertainty, produces a distribution or range that includes a result of 0.3 percent or less.

(17) Independent contractor--A person or entity contracted to perform work or sales for a registrant.

(18) License holder--The person who is legally responsible for the operation as a consumable hemp manufacturer, processor, or distributor, and possesses a valid license.

(19) Lot number--A specific quantity of raw or processed hemp product that is uniform and intended to meet specifications for identity, strength, purity, and composition that shall contain the manufacturer's, processor's, or distributor's, number and a sequence to allow for inventory, traceability, and identification of the plant batches used in the production of consumable hemp products.

(20) Manufacturer--A person who makes, extracts, processes, or distributes consumable hemp product from one or more ingredients, including synthesizing, preparing, treating, modifying or manipulating hemp or hemp crops or ingredients to create a consumable hemp product. For farmers and persons with farm mixed-type facilities, manufacturing and processing does not include activities related to growing, harvesting, packing, or holding raw hemp product.

(21) Measurement of uncertainty--The parameter, associated with the results of an analytical measurement that characterizes the dispersion of the values that could reasonably be attributed to the quantity subjected to testing measurement. For example, if the reported delta-9 tetrahydrocannabinol content concentration level on a dry weight basis is 0.35% and the measurement of uncertainty is +/- 0.06%, the measured delta-9 tetrahydrocannabinol content concentration level on a dry weight basis for this sample ranges from 0.29% to 0.41%. Because 0.3% is within the distribution or range, the sample is within the acceptable hemp THC level for the purpose of plan compliance.

(22) Non-consumable hemp processor--A person who intends to process hemp products not for human consumption and is registered with the Texas Department of Agriculture.

(23) Non-consumable hemp product--As defined by Texas Agriculture Code, §122.001(8), means a product that contains hemp, other than a consumable hemp product as defined by Texas Health and Safety Code, §443.001. The term includes cloth, cordage, fiber, fuel, paint, paper, particleboard, construction materials, and plastics derived from hemp.

(24) Pathogen--A microorganism of public health significance, including molds, yeasts, Listeria monocytogenes, Campylobacter, Salmonella, E. coli, Yersinia, or Staphylococcus.

(25) Person--An individual, business, partnership, corporation, or association.

(26) Process--Extraction of a component of hemp, including CBD or another cannabinoid, that is:

(A) sold as a consumable hemp product;

(B) offered for sale as a consumable hemp product;

(C) incorporated into a consumable hemp product; or

(D) intended to be incorporated into a consumable hemp product.

(27) Processor--A person who operates a facility which processes raw agriculture hemp into consumable hemp products for manufacture, distribution, and sale. A hemp processor is required to hold a consumable hemp products license. A person issued a consumable hemp products license, which only engages in the manufacturing, processing, and distribution of consumable hemp products, is not required to hold a license under Texas Health and Safety Code, Chapter 431, Subchapter J.

(28) QR code--A quick response machine-readable code that can be read by a camera, consisting of an array of black and white squares used for storing information or directing or leading a user to product information regarding manufacturer data and accredited laboratory certificates of analysis.

(29) Raw hemp--An unprocessed hemp plant, or any part of that plant, in its natural state.

(30) Registrant--A person, on the person's own behalf or on behalf of others, who sells consumable hemp products directly to consumers, and who submits a complete registration form to the department for purposes of registering their place of business to sell consumable hemp products at retail to the public.

(31) Reverse distributor--A person registered with the federal Drug Enforcement Agency as a reverse distributor that receives controlled substances from another person or entity for return of the products to the registered manufacturer or to destroy adulterated or impermissible THC products.

(32) Smoking--Burning or igniting a consumable hemp product and inhaling the resultant smoke, vapor, or aerosol.

(33) Tetrahydrocannabinol (THC)--The primary psychoactive component of the cannabis plant.

(34) Texas Department of Agriculture--The state agency responsible for regulation of planting, growing, harvesting, and testing of hemp as a raw agricultural product.

(35) Texas.gov--The online registration system for the State of Texas found at https://www.texas.gov.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on July 13, 2020.

TRD-202002880

Barbara L. Klein

General Counsel

Department of State Health Services

Effective date: August 2, 2020

Proposal publication date: May 8, 2020

For further information, please call: (512) 231-5653


SUBCHAPTER B. MANUFACTURE, PROCESSING, AND DISTRIBUTION OF CONSUMABLE HEMP PRODUCTS

25 TAC §§300.201 - 300.203

STATUTORY AUTHORITY

The new rules are authorized by H.B. 1325 that added Texas Health and Safety Code, Chapter 443, which provides that the Executive Commissioner of HHSC may adopt rules for the efficient enforcement of Texas Health and Safety Code, Chapter 443; and Texas Government Code, §531.0055 and Texas Health and Safety Code, §1001.075, which provides that the Executive Commissioner of HHSC shall adopt rules for the operation and provision of health and human services by DSHS and for the administration of Texas Health and Safety Code, Chapter 1001.

§300.201.Application for License or Renewal.

(a) A person must hold a consumable hemp products license issued by the department before engaging in the manufacture, processing, or distribution of consumable hemp products.

(b) A person shall apply for a consumable hemp products license under this subchapter by submitting an application to the department in the manner prescribed by the department for each location engaged in the manufacture, processing, or distribution of consumable hemp products. The application must be accompanied by:

(1) a legal description of each location to include the global positioning system coordinates for the perimeter of each location:

(A) where the applicant intends to manufacture or process consumable hemp products; and

(B) where the applicant intends to store consumable hemp products to include the global positioning system coordinates for the perimeter of each location;

(2) written consent from the applicant or the property owner, if the applicant is not the property owner, for the department, the Department of Public Safety, and any other state or local law enforcement agency, to enter all premises where consumable hemp is manufactured, processed, or delivered, to conduct a physical inspection or to ensure compliance with this chapter; and

(3) a fingerprint-based criminal background check from each applicant at the applicant's expense.

(c) If the applicant or person has been convicted of a felony relating to a controlled substance under federal law or the law of any state within ten years before the date of application, the department shall not issue a consumable hemp products license under this subchapter.

(d) If the department receives information that a license holder under this subchapter has been convicted of a felony relating to a controlled substance under federal law or the law of any state within ten years before the issue date of the license, the department shall revoke the consumable hemp products license.

(e) A person who holds a consumable hemp products license under this subchapter shall undergo a fingerprint-based criminal background check at his own expense.

(f) Applications must contain the following information:

(1) the name of the license applicant;

(2) the business name, if different than applicant name;

(3) the mailing address of the business;

(4) the street address of the facility;

(5) the primary business contact telephone number;

(6) the personal email address of the applicant; and

(7) the email address of the business, if different than the applicant's email address.

(g) If a person owns or operates two or more facilities, each facility shall be licensed separately by listing the name and address of each facility on separate application forms.

(h) Applicants must submit an application for a consumable hemp products license request under this subchapter electronically through www.Texas.gov. The department is authorized to collect fees, in amounts determined by the Texas Online Authority, to recover costs associated with application and renewal application processing through www.Texas.gov.

(i) All fees required by the department must be submitted with the application.

(j) Applicants must submit any other information required by the department, as evidenced and provided upon application forms.

(k) A consumable hemp products license issued by the department should be displayed in an obvious and conspicuous public location within the facility to which the license applies.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on July 13, 2020.

TRD-202002881

Barbara L. Klein

General Counsel

Department of State Health Services

Effective date: August 2, 2020

Proposal publication date: May 8, 2020

For further information, please call: (512) 231-5653


SUBCHAPTER C. TESTING OF CONSUMABLE HEMP PRODUCTS

25 TAC §§300.301 - 300.303

STATUTORY AUTHORITY

The new rules are authorized by H.B. 1325 that added Texas Health and Safety Code, Chapter 443, which provides that the Executive Commissioner of HHSC may adopt rules for the efficient enforcement of Texas Health and Safety Code, Chapter 443; and Texas Government Code, §531.0055 and Texas Health and Safety Code, §1001.075, which provides that the Executive Commissioner of HHSC shall adopt rules for the operation and provision of health and human services by DSHS and for the administration of Texas Health and Safety Code, Chapter 1001.

§300.301.Testing Required.

(a) All hemp or hemp derivatives used in the manufacture of a consumable hemp product must be tested as appropriate for the product and process by an accredited laboratory to determine:

(1) the presence and concentration of cannabinoids;

(2) the presence and concentration of THC; and

(3) the presence or quantity of residual solvents, heavy metals, pesticides, and harmful pathogens.

(b) A Certificate of Analysis documenting tests conducted under this subchapter shall:

(1) be made available to the department upon request in an electronic format before manufacture, processing, or distribution into commerce; and

(2) include measurement of uncertainty analysis parameters.

§300.303.Provisions Related to Testing.

(a) A consumable hemp product that exceeds the acceptable hemp THC level or is adulterated in a manner harmful to human consumption shall not be sold at retail or otherwise introduced into commerce in this state.

(b) A hemp manufacturer, processor, or distributor shall provide the results of testing required by §300.301 of this subchapter (relating to Testing Required) to the department upon request.

(c) The registrant shall provide the testing results required under §300.301 of this subchapter to a consumer or the department upon request.

(d) A license holder shall not use an independent testing accredited laboratory unless the license holder has:

(1) no ownership interest in the accredited laboratory; or

(2) holds less than a ten percent ownership interest in the accredited laboratory if the accredited laboratory is a publicly-traded company.

(e) A license holder must pay the costs of raw and finished hemp product testing in an amount prescribed by the accredited laboratory selected by the license holder.

(f) The department shall recognize and accept the results of a test performed by an accredited laboratory, including at an institution of higher education.

(g) The department may require that a copy of the test results be sent directly to the department and the license holder.

(h) The department shall notify the license holder of the results of the test not later than the 14th day after the date testing results are made available to the department.

(i) A license holder shall retain results from samples for a period of no less than three years from the date that testing results are made available to the license holder.

(j) A manufacturer or processor of consumable hemp products shall conduct sampling and testing using acceptance criteria that are protective of public health.

(k) A consumable hemp product is not required to be tested under §300.301 of this subchapter if each hemp-derived ingredient of the product:

(1) has been tested;

(2) includes the results that are available upon request from the department before distribution or sale; and

(3) contains an acceptable hemp THC level.

(l) The department may utilize Table 1 to test raw or finished consumable hemp products as appropriate for the product and the process:

Figure: 25 TAC §300.303(l) (.pdf)

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on July 13, 2020.

TRD-202002882

Barbara L. Klein

General Counsel

Department of State Health Services

Effective date: August 2, 2020

Proposal publication date: May 8, 2020

For further information, please call: (512) 231-5653


SUBCHAPTER D. RETAIL SALE OF CONSUMABLE HEMP PRODUCTS

25 TAC §§300.401 - 300.404

STATUTORY AUTHORITY

The new rules are authorized by H.B. 1325 that added Texas Health and Safety Code, Chapter 443, which provides that the Executive Commissioner of HHSC may adopt rules for the efficient enforcement of Texas Health and Safety Code, Chapter 443; and Texas Government Code, §531.0055 and Texas Health and Safety Code, §1001.075, which provides that the Executive Commissioner of HHSC shall adopt rules for the operation and provision of health and human services by DSHS and for the administration of Texas Health and Safety Code, Chapter 1001.

§300.402.Packaging and Labeling Requirements.

(a) All consumable hemp products marketed as containing more than trace amounts of cannabinoids must, in addition to the requirements of §300.102 of this chapter (relating to Applicability of Other Rules and Regulations), be labeled in the manner provided by this section with the following information:

(1) lot number;

(2) lot date;

(3) product name;

(4) the name of the product's manufacturer;

(5) telephone number and email address of manufacturer; and

(6) a Certificate of Analysis that the delta-9 tetrahydrocannabinol content concentration level on a dry weight basis, that, when reported with the accredited laboratory's measurement of uncertainty, produces a distribution or range that includes a result of 0.3 percent or less.

(b) The label required by this section must appear on each product intended for individual retail sale.

(c) The label required by this section may be in the form of:

(1) a uniform resource locator (URL) for the manufacturer's Internet website that provides or links to the information required by this section; and

(2) a QR code or other bar code that may be scanned and that leads to the information required on the label.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on July 13, 2020.

TRD-202002884

Barbara L. Klein

General Counsel

Department of State Health Services

Effective date: August 2, 2020

Proposal publication date: May 8, 2020

For further information, please call: (512) 231-5653


SUBCHAPTER E. REGISTRATION FOR RETAILERS OF CONSUMABLE HEMP PRODUCTS

25 TAC §300.501, §300.502

STATUTORY AUTHORITY

The new rules are authorized by H.B. 1325 that added Texas Health and Safety Code, Chapter 443, which provides that the Executive Commissioner of HHSC may adopt rules for the efficient enforcement of Texas Health and Safety Code, Chapter 443; and Texas Government Code, §531.0055 and Texas Health and Safety Code, §1001.075, which provides that the Executive Commissioner of HHSC shall adopt rules for the operation and provision of health and human services by DSHS and for the administration of Texas Health and Safety Code, Chapter 1001.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on July 13, 2020.

TRD-202002885

Barbara L. Klein

General Counsel

Department of State Health Services

Effective date: August 2, 2020

Proposal publication date: May 8, 2020

For further information, please call: (512) 231-5653


SUBCHAPTER F. ENFORCEMENT

25 TAC §§300.601 - 300.606

STATUTORY AUTHORITY

The new rules are authorized by H.B. 1325 that added Texas Health and Safety Code, Chapter 443, which provides that the Executive Commissioner of HHSC may adopt rules for the efficient enforcement of Texas Health and Safety Code, Chapter 443; and Texas Government Code, §531.0055 and Texas Health and Safety Code, §1001.075, which provides that the Executive Commissioner of HHSC shall adopt rules for the operation and provision of health and human services by DSHS and for the administration of Texas Health and Safety Code, Chapter 1001.

§300.601.Violation of Department License or Registration Requirement. (a) A person commits a violation if the person manufactures, processes, distributes, or sells a consumable hemp product into commerce without a license or registration required by the department under:

(1) §300.201 of this chapter (relating to Application for License or Renewal) for the manufacture, processing, or distributing of consumable hemp products; or

(2) §300.502 of this chapter (relating to Application) for the retail sale of consumable hemp products.

(b) Each day a violation continues or occurs is a separate violation for purposes of imposing an administrative penalty.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on July 13, 2020.

TRD-202002886

Barbara L. Klein

General Counsel

Department of State Health Services

Effective date: August 2, 2020

Proposal publication date: May 8, 2020

For further information, please call: (512) 231-5653