Texas "Total THC" Rule: What Hemp Retailers Need to Know
New hemp regulations taking effect March 31 are reshaping what retailers can carry on their shelves. Here's what changed, what's at risk, and how to pivot.
Texas hemp retailers are facing a sudden and significant shift in how THC is regulated. For many businesses, the impact is immediate.
As of March 31, 2026, the Texas Department of State Health Services (DSHS) has introduced a new method for calculating "Total THC." Under this updated framework, THCA is now included in the definition of THC. That means products that were previously considered compliant may now exceed the 0.3% Total THC threshold.
On top of that, DSHS has increased retail registration fees from $155 per location to $5,000 per location, and manufacturer licensing fees from $258 to $10,000. For small operators already running on tight margins, the timing could not be worse.
Up from $155
Up from $258
For retailers carrying affected products
This isn't a gradual change. It's a recalculation that affects inventory, compliance, and cash flow all at once.
Key Dates and Regulatory Timeline
DSHS proposes new rules for consumable hemp products in Texas, including updated Total THC calculation method and fee increases.
Federal government funding bill includes language redefining hemp to exclude products with more than 0.4mg THC per container. Federal deadline set for November 12, 2026.
DSHS adopts final rules. New Total THC calculation, fee schedule, and product restrictions are published in the Texas Register.
New DSHS regulations take effect. Updated Total THC formula, $5,000 retail fees, $10,000 manufacturer fees, and smokeable product restrictions are all enforceable.
Federal hemp redefinition takes effect. Products exceeding 0.4mg THC per container may no longer qualify as hemp nationwide.
What Actually Changed With "Total THC"?
The regulation doesn't change what THC is. It changes how it's measured.
Previously, THCA was tested and labeled separately from Delta-9 THC. Under the new DSHS rules, THCA is now included in the definition of THC and factored into Total THC calculations using a post-decarboxylation formula. That means products with higher THCA levels may now exceed the 0.3% Total THC threshold, and lab results that previously passed may no longer meet the new standard.
"Total THC" means the sum of Delta-9 THC and the converted value of THCA, calculated using the formula: Delta-9 THC + (THCA x 0.877).
Source: DSHS 26 TAC Chapter 440, Subchapter A
THCA on its own isn't psychoactive. But when heated or smoked, it converts into Delta-9 THC. That conversion is now factored into the test, which is why some products that were previously compliant may no longer meet the threshold under the new calculation method.
The rules also introduce new restrictions on smokeable hemp products. Combined with the updated THC calculation, entire product categories are affected.
For retailers, this creates a disconnect between what's currently on shelves and what's compliant under state law starting March 31.
How to Read Your COA Under the New Rules
If you carry hemp-derived products, you need to know whether they pass the new Total THC calculation. Here's what to look for on a Certificate of Analysis (COA).
If the result exceeds 0.3% by dry weight, the product is non-compliant.
Which Products Are Most Affected?
The impact is concentrated in product categories that may exceed the new Total THC threshold:
The single largest affected category. Multiple Texas retailers report that smokeable products account for 40-50% of their total sales. Products with higher THCA content are most likely to exceed the new threshold.
Higher cannabinoid concentrations make these products more likely to exceed the 0.3% Total THC threshold under the new calculation.
Subject to both the new Total THC calculation and the smokeable product restrictions.
Also subject to the updated Total THC calculation and may no longer meet the compliance threshold.
These products represent the highest-risk inventory for retailers as the new regulations take effect. Hemp businesses selling non-compliant products face penalties including license revocation and fines up to $10,000 per day.
What This Means for Texas Hemp Retailers
This isn't just a compliance update. It's an operational disruption hitting from multiple directions at the same time.
Products legally purchased and stocked may become non-compliant under the new calculation. Retailers carrying affected inventory could see 40-50% of their product mix impacted with no grace period.
Capital is tied up in inventory that may need to be removed, discounted, or written off. The $5,000 per-location registration fee is due immediately on top of that.
Businesses selling non-compliant products after March 31 face license revocation and daily fines up to $10,000.
New child-resistant packaging requirements, updated labeling standards, and stricter bookkeeping and inspection processes add operational cost.
At the store level, even small compliance gaps can now carry significant consequences.
What Retailers Should Be Doing Right Now
If you operate a hemp retail business in Texas, the priority is risk mitigation and preparation.
Identify every product that may be affected by the new Total THC calculation. Calculate your exposure to understand exactly how much of your current inventory is at risk.
Don't rely on previous compliance assumptions. Verify how each product would test under the updated post-decarboxylation formula. If your supplier can't provide updated Total THC testing, that's a red flag.
Don't wait for shelves to go empty. Product categories that remain fully compliant include THC edibles, kratom capsules and beverages, CBD topicals and tinctures, and non-alcoholic hemp beverages.
Make sure your team is aligned on age verification (21+), updated labeling standards, child-resistant packaging, and proper documentation for inspections.
The $5,000 per-location registration fee is a significant jump. Factor this into your operating costs immediately. Manufacturers face $10,000 per facility.
The businesses that move fastest will be in the strongest position to stay operational.
The Bigger Picture for Texas Hemp Shops
For many small and mid-sized retailers, this change goes beyond a single compliance update. It creates a structural problem: heavy reliance on product lines now affected by the new regulations, limited capital to absorb inventory losses, rising operational costs from licensing fees, packaging, and compliance, and revenue pressure from both sides.
Some retailers report that the combination of lost revenue from affected products and the new $5,000 fee is forcing difficult decisions about whether they can continue operating.
And a larger federal threat is on the horizon. Language included in the November 2025 government funding bill redefines hemp to exclude products with more than 0.4 milligrams of THC per container. That federal restriction is scheduled to take effect November 12, 2026, which could affect even more product categories.
The window to pivot is now.
How MNG Brands is Responding
In response to these changes, MNG Brands has launched a statewide initiative designed specifically for Texas hemp retailers affected by the new regulations.
We are putting our capital and our supply chain to work to ensure Texas shops can pivot, stay legal, and stay profitable.
President, MNG Brands
The goal: help businesses transition quickly, stay compliant, and remain operational without empty shelves or rushed decisions.
$50,000 in recovery grants and a statewide inventory buy-back program. One application covers both.
Apply NowThe Texas Hemp Rescue Grant
MNG Brands has committed $50,000 in recovery support for Texas hemp businesses affected by the new rules, focused on two core programs:
Reimbursement credit of the $5,000 state license fee for 10 selected "Community Pillar" businesses across Texas. That's $5,000 per business, $50,000 total.*
Swap non-compliant product for MNG's compliant products, keeping shelves stocked. Categories include THC edibles, kratom beverages and capsules, CBD topicals and tinctures, and NA craft beer.
*Conditional upon the approval of licensure.
This isn't just financial support. It's an operational pivot designed to keep businesses running without a gap in product availability.
Applications are open now. Selections are guided by a panel of industry leaders, policy advocates, and business experts including David Palatnik (President, MNG Brands), Cynthia Cabrera (Industry Advocate), Mark Bordas (Executive Director, Texas Hemp Business Council), Heather Fazio (Director, Texas Cannabis Policy Center), Craig Katz (Government Relations and Compliance Manager, MNG Brands), and Dafna Revah (Vice President, MNG Brands).
What Products ARE Compliant?
The new rules don't affect everything. These product categories remain fully legal and sellable in Texas:
THC gummies, lollipops, chocolate, caramels, and honey sticks. Controlled THC dosing stays under the 0.3% threshold. Includes the Dogg Lbs x Snoop Dogg collab and beeZbee gummy lines.
THC sodas, kratom seltzers, cold brew teas, drink infusers, and NA craft beer. THC beverages fall under TABC oversight, which has not implemented the same DSHS restrictions.
CBD pain balms, creams, bath products, and pain patches. Applied externally with no THC ingestion or inhalation, keeping them well within compliance.
Kratom is not a cannabinoid and is unaffected by the Total THC rule. High repeat purchase rates make it a reliable revenue category.
Kratom extracts, THC tinctures, and minor cannabinoid formulas. Versatile, high-margin products for any shelf.
CBD products for dogs and cats. A growing category that broadens your customer base beyond the traditional hemp buyer.
Browse the full MNG Brands wholesale catalog →
Who This Program Is For
This program is built for Texas hemp retailers, CBD and smoke shop operators, multi-location retail businesses, and wholesale partners affected by the new hemp regulation changes.
It is intended for Texas businesses dealing directly with the operational and financial impact of the new rules. It is not intended for individual consumers.
How To Apply
Retailers can apply for license fee reimbursement, inventory swap participation, or both through a single application on the Texas Hemp Rescue Grant page.
If you're applying for the Inventory Clean Sweep buy-back, download the inventory template, fill in your current non-compliant stock, and upload it with your application.
Applications are open now. The March 31 deadline is days away.
License fee relief and inventory swap. One application, both programs.
Apply for the Texas Hemp Rescue GrantDownload the inventory template if applying for the Clean Sweep buy-back.
About MNG Brands
MNG Brands is a national leader in functional wellness retail and product innovation, operating one of the largest privately owned CBD and kratom platforms in the United States. The company launched this program to help Texas operators adapt to regulatory change without being forced into unnecessary closures, empty shelves, or rushed decisions.
Final Takeaway
The Texas Total THC rule is not just another policy update. For many retailers, it is a turning point.
The businesses that respond quickly, review inventory carefully, and move into compliant product categories will be in a far better position than those waiting for clarity that may not come in time.
If your shop is facing inventory exposure, licensing pressure, or uncertainty about what comes next, the Texas Hemp Rescue Grant was created to help you make that pivot.
