Texas medical marijuana expansion poses major opportunity

For years stifled by law, Texas’ modest medical cannabis industry is poised to boom in 2026 thanks to expanded patient eligibility and product access.

But as major marijuana multistate operators move to enter the Lone Star State for the first time, Texas’ estimated $5 billion hemp-derived THC market is still posing questions that both lawmakers and cannabis businesses will have to answer.

For almost a decade, the only product available to the patients with epilepsy enrolled in the Texas Compassionate Use Program (TCUP) was very low THC oil obtained from only three licensed businesses, or dispensing organizations.

That led to criticism from cannabis advocates that TCUP, established in 2015, was so restrictive that it was practically worthless – for both patients as well as businesses.

One of Texas’ three dispensing organizations was “effectively inoperable” for several years, according to the Texas Department of Public Safety.

The longstanding limited legal cannabis access played in a role in the explosive rise of hemp-derived THC in the state, as frustrated patients – and would-be patients – ditched TCUP for hemp THC available online and in numerous brick-and-mortar locations.

Major expansion for Texas medical marijuana

In response, last June, Texas Gov. Greg Abbott signed into law House Bill 46, a broad expansion of medical cannabis.

Under the new rules, finalized this fall:

• Cannabis products can now include up to 10 milligrams of THC per dose, with no more than 1000 milligrams (one gram) in a package.
• The number of available vertically integrated businesses licenses for dispensing organizations increased from 3 to 15, with permits to be issued by April 1.
• Qualifying conditions for patients now include chronic pain and terminal illnesses, with the ability to add more conditions without passing a new law.

In addition to oil, patients can access topical lotions, patches, suppositories, and prescribed inhalers and vaping devices.

Smokable flower is still unavailable, maintaining the state’s cautious, anti-recreational use approach.

Texas makes cannabis THC available, but hemp THC remains

Abbott signed the TCUP expansion into law before vetoing a separate effort, led by Lt. Gov. Dan Patrick, to ban hemp-derived THC products outright.

The governor then issued an executive order in September that directed state agencies to regulate hemp THC products similar to alcohol, including age restrictions and mandatory ID checks.

That prompted a victory lap for the Texas hemp industry that may turn out to be temporary.

A pending federal ban, signed into law by President Donald Trump late last year and set to take effect in November 2026, has left hemp business in a state of uncertainty.

This is significant as the massive Texas hemp industry offers much more access to THC than the medical program.

That said, the hemp industry hasn’t severely impacted patient growth in TCUP even as dispensing organizations complained of declining sales.

Is medical marijuana patient enrollment growing in Texas?

Patient enrollment stood at 135,470 at the end of 2025, a year-over-year increase of nearly 32% that’s been attributed in part to awareness of TCUP’s expansion.

Since 2023, month over month enrollment growth has averaged a respectable 3%, amounting for 100,000 new patients in Texas since that time.

While Texas’ medical marijuana program is growing, it remains small when compared with programs in other populous states, such as Florida and Pennsylvania, which have 890,000 and 444,000 patients respectively.

With 31 million people in Texas, fewer than 0.5% are enrolled in TCUP. That’s well below a nationwide average of about 2.1% medical cannabis patient enrollment found in a 2024 study funded by the National Institutes on Drug Abuse.

Both Florida and Pennsylvania offer access to a wider range of THC products, including the smokeable flower and pre-rolls still dominating baskets.

Patient growth at least in part hinges on doctors. According to The Texas Tribune, only about 800 of Texas’ estimated 80,000 board-certified physicians are registered in the program.

That could change after Trump’s Dec. 18 executive order that directs the Justice Department to finalize a reclassification of cannabis to Schedule 3, a category that recognizes marijuana as medicine, while also calling for more cannabis research.

Major marijuana multistate operators turn to Texas

Last month, the Texas Department of Public Safety also conditionally approved nine new dispensary licenses under the expanded program.

Similar to how medical cannabis is regulated in Virginia, each licensee will be limited by geography to a specific region.

Businesses seeking the permits, which are not yet finalized, include affiliates of marijuana multistate operators Trulieve Cannabis Corp. and Verano Holdings, a strong sign that national cannabis industry players are finally interested in Texas now that the medical market is evolving.

“We look forward to putting plants in the ground that are grown in Texas, by Texans, and delivered to patients across the state, in accordance with the law,” George Archos, Verano’s CEO, told The Texas Tribune.

Exact sales figures remain a guarded secret in Texas. The state Department of Public Safety (DPS), which administers the program, did not respond to requests for comment from MJBizDaily.

And sales figures were not published in a landmark 2024 report analyzing TCUP’s viability.

Largest medical cannabis campus in Texas opens near Austin

Texas’ existing dispensing organizations are betting on growth.

In December, Texas Original opened the state’s largest medical cannabis facility: a 75,000-square-foot campus near Austin that will allow the company to increase its production capacity by “20x,” Texas Original CEO Nico Richardson told MJBizDaily.

The TCUP expansion also enables operators to dispense out of satellite locations, allowing same-day pickup and expanded delivery services.

Texas Original currently has 17 pickup locations, a satellite location in South Austion, and has “more in development,” Richardson said.

“We are ready to meet demand,” he said in an emailed statement.

“As House Bill 46 expands qualifying conditions and delivery methods, we expect additional growth and are positioned to serve Texans safely and responsibly.”

The $5.5 billion hemp THC question facing Texas medical cannabis

Despite these gains, the lingering hemp-derived THC question remains unresolved.

Agriculture Commissioner Sid Miller has called on Congress to repeal the hemp THC ban, warning of its potential impact on Texas businesses.

But in the meantime, state agencies have proposed raising fees on certain hemp companies by as much as 13,000%, The Tribune reported.

According to the Tribune, under draft rules unveiled in late December, a hemp manufacturer license would cost $25,000 per facility per year – up from $250 – and a retail permit would cost $20,000 per location per year, up from $150.

New testing rules would also effectively forbid flower as a source for final manufactured products. That would leave synthetically derived THC, such as delta-8 THC derived from CBD or delta-10 THC as alternatives, critics said.

Andrew Long and Chris Roberts contributed to this report.