Texas Cannabis Compliance Guide
Compliance requirements for cannabis businesses operating in Texas. Texas operates the highly restrictive Compassionate Use Program limited to low-THC cannabis products and a small group of qualifying conditions. Only a handful of vertically integrated licensees serve the entire state.
Regulatory Authority
Texas Department of Public Safety (DPS) - Compassionate Use Program
Official website →Market Status
Medical Only
6 active licenses
Key Compliance Areas in Texas
Testing Requirements
All cannabis products sold in Texas must be tested by a state-licensed laboratory before reaching consumers. Required tests typically include potency (cannabinoid profile), pesticide screening, heavy metals analysis, microbial contamination, and residual solvents for concentrates. Texas has 0 licensed testing facilities.
Licensing
Texas issues multiple license types including cultivation, manufacturing/processing, distribution, retail/dispensary, and testing laboratory licenses. All license holders and key personnel must pass background checks. License applications are managed by Texas Department of Public Safety (DPS) - Compassionate Use Program.
Seed-to-Sale Tracking
Texas requires cannabis businesses to use a state-approved track-and-trace system to monitor products from cultivation through retail sale. This typically involves METRC or a similar platform. All inventory movements, transfers, and sales must be recorded in real time.
Tax Obligations
Cannabis businesses in Texas are subject to both state cannabis-specific taxes and federal tax obligations under IRC Section 280E. Federal taxes prevent most business expense deductions, making proper COGS allocation critical. A cannabis-specialized CPA is essential for compliance.
Frequently Asked Questions
Is cannabis legal in Texas?
Texas has legalized medical cannabis only. Recreational use is not currently permitted. The state has approximately 6 active cannabis licenses.
Who regulates cannabis in Texas?
Cannabis in Texas is regulated by Texas Department of Public Safety (DPS) - Compassionate Use Program. Their website is https://www.dps.texas.gov/section/compassionate-use-program.
How many cannabis testing labs are in Texas?
Texas has 0 licensed cannabis testing laboratories listed on CannaBizGuide. All labs must be licensed by Texas Department of Public Safety (DPS) - Compassionate Use Program.
Do I need a special CPA for a cannabis business in Texas?
Yes. Cannabis businesses face unique tax challenges under IRC Section 280E that most regular accountants are not equipped to handle. 48 cannabis professionals serve Texas on our directory.