Marijuana is illegal in Texas. But plenty of businesses and Houstonians are celebrating 4/20 — America’s unofficial cannabis holiday — nonetheless.
Despite operating in one of the most restrictive states in the country, the nation’s growing cannabis industry has seen a fair share of related businesses from Texas, as well as plenty of consumers using new, innovative and legal pot-related products.
Since 8th Wonder Brewery launched its cannabis business in October, the company has seen steady monthly growth, according to president and co-founder Ryan Soroka. They see a “wide mix” of customers, from regular users to the canna-curious.
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Cannabis products are popping up in businesses across Houston and Texas, from CBD lattes at local cafes to the seltzers infused with hemp-derived THC served up at 8th Wonder. CBD, or cannabidiol, is a nonpsychoactive compound in cannabis that doesn’t cause a high and isn’t addictive. THC, or tetrahydrocannabinol, on the other hand, is a psychoactive that at certain level makes a user feel high.
The nation’s largest prohibition state
Texas is, to be clear, a “prohibition” state. Recreational use of marijuana is illegal in Texas, as it is at the federal level. Possessing, selling or distributing marijuana still carries stiff penalties in Texas, though in several cities and counties, small amounts have been decriminalized.
The state does have a small medical marijuana program under a 2015 law, and observers of the Texas Legislature see potential for that program to grow this year. A measure which would expand access to patients suffering from chronic pain passed the Texas House last week on a 127-19 vote. But broader change at the state level is considered unlikely, with state leaders including Gov. Greg Abbott and Lt. Gov. Dan Patrick staunchly opposed to legalizing recreational use.
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“Texas is definitely a bit of a wild, wild west with respect to this industry. We don’t have a legal rec(reational) state for marijuana, and we’re barely a medical marijuana state,” Soroka said. “Right now, the name of the game is hemp.”
Commercially produced hemp is legal under the 2018 federal Farm Bill and a 2019 state law. Marijuana and hemp, both species of the cannabis sativa plant, are similar in terms of appearance, uses and effects.
So Adanary Jacques, co-owner of The Urban Flower Co. in Gulfgate, saw an opportunity when the 2018 Farm Bill was passed, and was motivated to act.
“It did feel risky, because of the lack of information and education out there about the different cannabinoids, the different species of the cannabis plant, but it was worth exploring and investigating so that we could comply with whatever the Farm Bill facilitated,” she said. “It’s not a drug. It’s an herb and a flower and God put it here. Nobody has to get a medical license to buy lavender or chamomile to calm themselves at night.”
The shop opened in March 2020, selling hemp-derived CBD products, and has expanded its offerings to include delta-8 and delta-9 products, also derived from hemp, after courts conceded the legality of those products.
Complicating matters for Texas entrepreneurs, however, is the widespread confusion about the current regime.
“When I opened, I was kind of naive. On paper, everything’s completely legal, so I was like, ‘This is going to be a piece of cake,’ ” said Molly Mathias, owner and CEO of Go Easy, a store with locations in Dallas’s Bishop Arts district and Houston’s M-K-T development that sells sexual wellness products as well as weed-related wares including gummies, joints, and glass pipes.
“Turns out that’s not true,” she continued. “They make it very difficult, even selling legal goods.”
It’s not just the state, Mathias added. Over the past three years, she estimated, she’s gone through about 10 payment processors and been personally banned from Square. Instagram deleted a number of her business-related posts with no explanation.
“We kind of have to go old-school with advertising,” she said.
But her business has grown, she said, thanks to word of mouth.
The lack of state recognition also means a lack of strong state regulation, according to Soroka.
On the brewery and distillery side of its operations, 8th Wonder has state and federal law and agencies to guide them on a legal path. But for cannabis, the company has none of that. Soroka said they rely on “taking cues” from the alcohol industry, such as serving THC products only to people over 21.
In-demand and innovative
Even if Texas continues to prohibit marijuana, entrepreneurs in the cannabusiness space see nothing but growth ahead for the industry.
“You have one of the most conservative states in the union, and you also have one of the most sophisticated operators in the country, right in the city of Houston, putting out some of the most innovative hemp-derived products in the country,” said Ben Meggs, CEO and co-founder of Bayou City Hemp.
Bayou City is one of the first and largest hemp processing plants in Texas, processing raw hemp and producing finished products out of its Houston facility.
While the demand is there for cannabis products, the challenge is making them accessible, said Joel Canada, vice president of sales for Bayou City Hemp. One easy way to do that is to incorporate cannabis into drinks sold at bars, restaurants and cafes.
“Drinking an intoxicating beverage has been something ingrained in our culture for quite some time,” Soroka said. “Folks understand that they can connect with it and remain social in a format that is familiar to them, but doesn’t necessarily have the same effects as alcohol. It’s a nice adult beverage alternative.”
At 8th Wonder, THC seltzers are “flying off the shelves,” Soroka said. In a few weeks, Bayou City plans to launch several more cannabis infused drinks such as THC Palomas and ranch waters. The familiar look and experience of a cannabis beverage helps make them more approachable for people who might otherwise be hesitant to try smoking, and it’s also much easier to pass off at a family cookout, Meggs said.
Urban Flower’s Jacques, for one, said she’s seen the stigma around such products lessen as more people encounter them.
“It’s beautiful to see the change in attitude to everything cannabis. So many people are more open-minded about it, as we really hoped,” Jacques said.
Only growth ahead
Ironically, legalization of recreational marijuana would be a mixed bag for many of the entrepreneurs who have launched cannabis-related businesses in Texas. It would mean new regulations, new licensing requirements and more competition.
Still, these entrepreneurs are hoping for change, and consider it likely at some point.
“We’re all for it,” Jacques said. “We’re ready. We’ve been ready. And we’re working with what we can.”
“I just think Texas is too business-forward and too money-forward to leave that on the table.” Mathias said. “At least, I hope so.”
erica.grieder@houstonchronicle.com
megan.munce@chron.com
Erica Grieder is a business reporter for the Houston Chronicle.
She joined the Houston Chronicle, as a metro columnist, in 2017. Prior to that she spent ten years based in Austin, reporting on politics and economics, as the southwest correspondent for The Economist, from 2007-2012, then as a senior editor at Texas Monthly, from 2012-2016. In 2013, she published her first book, “Big, Hot, Cheap, and Right: What America Can Learn from the Strange Genius of Texas.” An Air Force brat, Erica thinks of San Antonio as home. She is a member of the Federal Reserve Bank of Dallas’s Emerging Leaders Council, and holds degrees from the University of Texas at Austin’s LBJ School of Public Affairs and Columbia University, where she majored in philosophy.
Megan Fan Munce is a reporter on the climate team covering California’s home insurance crisis. She writes about the California FAIR Plan; State Farm non-renewals; pullbacks by other insurers such as Allstate and Farmers; policy initiatives from the California Department of Insurance; and how homeowners in the Bay Area and elsewhere are navigating the challenges.
Munce first joined the San Francisco Chronicle as part of the two-year Hearst Journalism Fellowship, spending her first year of the program at the Houston Chronicle. She grew up in San Jose before attending Northwestern University’s Medill School of Journalism.