Texas Appeals Court Halts Oral Arguments in Legal Challenge to State Hemp Regulations

Texas Appeals Court Halts Oral Arguments in Legal Challenge to State Hemp Regulations

In the aftermath of the recent election, where voters decisively removed all three Republican justices from the 15th Court of Appeals, the court has announced the postponement of oral arguments in four pending cases. The court informed attorneys that these cases will be rescheduled for a later date.

This shift will place the fate of these important matters, including a legal challenge against state regulations that restrict the sale of hemp-derived products containing THC, in the hands of three incoming Democratic justices set to take their positions in January.

The regulations concerning THC, which were slated to take effect at the end of March, introduced several stringent measures. These included requirements for child-resistant packaging, substantial increases in licensing fees, and new stipulations for labeling, testing, and bookkeeping. Additionally, the Texas Department of State Health Services established a legal purchasing age of 21 and raised the licensing fees for manufacturers of hemp-derived THC from $258 to $10,000 per facility, with retail registrations increasing from $155 to $5,000. Industry representatives have argued that such fees effectively function as a ban, compelling many businesses to shutter their operations.

In a response to the impending regulations, smoke shops temporarily removed these products from their inventory. However, on April 10, a district judge in Travis County issued a temporary injunction against the rules while the hemp industry’s lawsuit proceeded through the courts.

The 15th Court of Appeals, which handles statewide challenges to state laws and regulations, was scheduled to conduct oral arguments regarding this case on December 8.

The recent cancellation of these arguments will allow the current justices to finalize opinions on cases that have already undergone oral or written arguments. Justice Scott Field expressed to Bloomberg Law that there is an understanding that they will be unable to issue opinions for cases argued before the year’s end. Consequently, he emphasized the importance of not wasting attorneys’ time with a hearing that the new court may wish to revisit.

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Currently, there are 39 cases pending before the outgoing justices that have already seen oral or written arguments and are awaiting decisions.

Oral arguments originally set for December 8 and 9 were also canceled in several notable cases, including:

  • The State of Texas vs. Sunrise Community Church Inc. – This case involves a legal dispute surrounding a homeless shelter in South Austin, where the attorney general’s office claims the shelter’s location near an elementary school constitutes a public nuisance.
  • Comptroller Don Huffines and Attorney General Ken Paxton vs. City of Lancaster – This case concerns a disagreement over approximately $3 million in sales taxes.
  • Huffines and Paxton vs. Dave & Buster’s – This lawsuit seeks to recover $2.58 million that the entertainment company asserts qualifies for tax exemptions.