Buying or selling a cannabis business in Texas

Is cannabis legal in Texas?

Only through the Texas Compassionate Use Program (TCUP), a prescription-based medical programme regulated by the Department of Public Safety. Adult-use marijuana is illegal, and Texas has no citizen initiative process, so legalisation can only come from the Legislature.

HB 46, effective 1 September 2025, was the biggest change since the programme began. It replaced the 1% THC cap with a limit of 10 mg per dose and 1 gram of THC per package, added chronic pain, traumatic brain injury, Crohn’s disease and terminal illness, and allowed non-smoked inhalation. Smoking flower remains prohibited.

What licences exist, and how many?

One licence type: the dispensing organisation, which must cultivate, process and dispense under a single entity. There are no standalone cultivation, manufacturing or retail licences.

Item	Position as of September 2026
Licences authorised	15 (3 original plus 12 under HB 46)
New selections	9 on 1 December 2025, 3 on 1 April 2026, all conditional pending DPS due diligence
Reserve list	12 further applicants on a DPS eligibility list
Operational deadline	New licensees must be operating within 24 months
Satellite locations	Allowed within public health regions, with DPS approval
Fees in DPS’s posted rules	$7,356 application, $488,520 two-year licence, $318,511 biennial renewal; confirm the current 37 TAC 12.14 figures

Fifteen licences for a state of roughly 30 million people makes Texas one of the tightest limited-licence markets in the country.

Can a Texas licence change hands?

Through the entity, with DPS vetting, rather than by assigning the licence. DPS rules define a “director” to include any owner, partner or shareholder holding more than 10%, and every director must register and pass a fingerprint-based background check. A buyer taking more than 10% therefore has to be cleared by DPS. The rules do not publish a processing time.

Two practical points. First, the twelve new licences are conditional, and DPS selected them on the merits of specific applicants; a change of control before final approval and build-out invites hard questions. Second, because the programme is medical-only, qualifying activity sits under the April 2026 federal Schedule III order, which improves after-tax cash flow relative to a 280E operator. See change of ownership approval for how these reviews work in general.

The hemp-THC fight

Texas’s consumable hemp sector is much larger than TCUP, and its rules have shifted repeatedly:

1. June 2025: Governor Abbott vetoed SB 3, which would have banned hemp THC products.
2. September 2025: Executive Order GA-56 directed DSHS and TABC to restrict sales; a 21 age limit followed.
3. 31 March 2026: a DSHS rule began counting THCA toward the 0.3% limit, which effectively bans most smokable hemp. The same rule package raised fees sharply.
4. April 2026 onward: hemp businesses sued in Travis County. The rule was briefly blocked, and the Fifteenth Court of Appeals has since let it stay in effect while the case continues.

Federal law then cuts deeper. Under P.L. 119-37, as delayed by H.R. 6500, cannabinoids the plant cannot naturally produce lose hemp status on 12 November 2026, and the total-THC test, per-container cap and converted-cannabinoid exclusion apply from 11 December 2026. Read hemp versus marijuana for buyers before pricing any Texas hemp deal.

What is realistically for sale in Texas?

• Interests in dispensing organisations. Rare, negotiated, and subject to DPS vetting. Some conditional licensees will need capital to meet the 24-month deadline, which is where minority investments and partnerships are most likely.
• Hemp and CBD businesses. Plentiful, but many are selling because of the rules above. Value only the compliant, surviving revenue. See hemp and CBD businesses.
• Ancillary businesses. Labs, packaging, security, software and real estate serving TCUP licensees or markets such as Oklahoma and New Mexico. These are ordinary business sales. See ancillary cannabis businesses.

Sellers of hemp businesses should expect buyers to discount heavily for December 2026. Buyers of TCUP interests should budget for a long DPS review and a thin comparable-sales record. This is educational, not legal or tax advice.