Wyatt Purp, a cannabis shop in Denton, has been selling hemp-derived products since October 2024. Like many other businesses, they've also had to navigate changing laws and regulations around the future of smokeable hemp over the last few months.
Dustin Ragon, CFO and co-founder of Wyatt Purp, says the current legal battle playing out in Texas came as a surprise.
"We thought we were good to go and we had discovered the American Dream," he said. "Now they’re trying to rip it away from us."
Texas farmers have been able to legally grow hemp since 2018. Now, the hemp industry has exploded to become one of the biggest in the country. Ragon said he thinks the state wants a piece of that success.
"They’ve let us build it up for them over the last five years," he said.
In March, the Texas Department of State Health Services issued new regulations at the urging of Governor Greg Abbott, which effectively banned smokeable hemp in the state. That's after Abbott vetoed a bill from the Texas legislature that would've banned all consumable hemp products outside of the state's Compassionate Use Program. A judge has since put those new rules on hold after some hemp sellers sued.
One rule being challenged is increased fees businesses have to pay the state in order to sell hemp products. The fee for retailers was raised from $150 per location per year to $5,000. The manufacturer fee also increased from $250 annually to $10,000. Some sellers and manufacturers involved in the ongoing legal dispute say that amounts to an unconstitutional tax and argue it's not sustainable for smaller businesses. But Ragon said he and his business partners are willing to pay more, as long as the product remains legal.
"I’m totally fine with the fees as long as they don’t take the flower away," he said. "The flower is what is 90% of the commodity. It takes away 90% of my business."
And the uncertainty surrounding the future of the hemp industry in Texas is hurting Ragon's workforce.
"On March 31st, I had to layoff half my staff and reduce hours and cut wages," he said. "It's hard on our employees, too. It's their livelihoods we're playing with."
Despite the uncertainty, Ragon says one thing is clear — laws eliminating the sale of hemp-derived THC products in Texas would not necessarily mean all smokeable products would suddenly vanish. Ragon says people who want the product are going to find it elsewhere.
"People are going to go call their dealers back up," he said. "And the street dealers are going to be super happy about these rules because it will bring their business back."
Unlike products sold on the street, Ragon says the products sold at Wyatt Purp must go through various testing and those safety protocols are important for consumers.
"I feel like what we are doing is a real benefit to the community," he said. "We do the third-party testing. We make sure that there are no substances that are not supposed to be in there."
For now, while the owners and staff at Wyatt Purp wait for answers, Ragon says he feels disheartened and disappointed with the state.
"I thought Texas was a huge small business state and that they prided themselves on that," he said. "All this that is coming out is the opposite. This was the American Dream. If I’m able to keep doing this, then I have the American Dream."
Ron Corning is a cohost of KERA's forthcoming talk show, NTX Now. Got a tip? Email Ron at rcorning@kera.org.
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