Texas Original, one of the few medical cannabis providers in the nation's most restrictive state, navigates a highly controlled market while facing competition from a burgeoning, unregulated cannabis industry. are.
CEO Nico Richardson spoke with Benzinga Cannabis about the company's challenges, the state's regulatory landscape, and the untapped growth potential that Texas represents.
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Texas: “The most regulated market in the country”
Texas has one of the most regulated cannabis markets in the country, creating a major hurdle for operators like Texas Original. “This is the most regulated market in the country,” Richardson said.
Nico Richardson – CEO Texas Original – Photo provided.
Texas law limits THC to 1% by weight, making it nearly impossible to offer inhalable products such as flower, which make up the majority of medical marijuana sales in other states. .
“Although we are limited to producing tinctures and edible products, 80-90% of our pharmaceutical sales in other markets are inhalers, which is critical for patients who need quick symptom relief. '' said Richardson.
Adding to the challenge is Texas' requirement that all operations, including cultivation, manufacturing, testing, and distribution, be done under one roof. “We operate one facility in Austin and transport product every day to collection points in cities like Houston and Dallas. At the end of the day, what's unsold has to go back to Austin.” , emphasized the logistical hurdles. It operates under strict regulations in such a large state.
why? big potential
Despite these hurdles, Richardson emphasized that he believes Texas Original has great market potential. “When we entered 2021, we weren't confused,” Richardson said. “Regulations were tight, but so was early Canada. The natural progression of the medical market is that at first it was severely restricted, but as more people were helped and diversion became less of an issue, time increased. The market will open up over time.”
Richardson emphasized Texas' growth potential. “Texas has a population of 30 million people, but only three medical marijuana licenses. Look at Florida. Florida has a population of 20 million people and 28 licenses, and about 70 per year. billions of dollars. The opportunity here is huge and I believe that eventually regulation will be eased.”
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Regulatory concerns
Texas regulators' concerns about cannabis diversion, or the illegal sale of marijuana products, have led to stricter regulations on medical products. “State police regulate our industry, and the biggest concern when the program started was black market diversion,” Richardson told Benzinga.
As a result, the company must keep all its inventory under one roof and is subject to strict monitoring. “We are always under DEA supervision and inspect every batch that leaves our facility.”
Texas Original – Provided Photo
Despite these constraints, Texas Original has maintained its competitive edge by increasing operational efficiency. “By focusing on automation, improving cultivation processes and streamlining manufacturing, we have been able to lower prices over the past five years,” Richardson said. The company is continually improving its operations to serve a growing patient base throughout Texas.
hemp wild west
Although medical marijuana is highly regulated, the market for cannabis-derived psychoactive products in Texas operates with minimal oversight. Richardson said hemp products that are much stronger than what Texas Original is allowed to offer are often sold at gas stations and convenience stores. “When our drivers travel to Houston or El Paso, they pass hundreds of hemp stores selling THCA flower with 30% THC and Delta-8 vape pens with 80-90% THC,” Richardson said. He pointed out a Kafkaesque situation.
The Texas Department of Health and Human Services (HHS) oversees hemp products, and the Texas Department of Public Safety (DPS) regulates medical marijuana.
“We are regulated by the police. The disparity in regulation is stark. Medical cannabis is treated like a threat to public safety, while the hemp industry operates with virtually no oversight. “Hemp products aren't subject to the same testing. When we test them, they're full of pesticides, microbial contamination, and even mold,” he explained.
Also read: Texas cannabis industry fights Delta-8 THC ban as Supreme Court ruling looms
increasing suspension
Richardson noted that school-related suspensions for the use of unregulated hemp products have increased dramatically. “School-related suspensions related to drug incidents have increased 2.5 times since 2021, and it’s because of cannabis. There are cannabis dispensaries just 70 feet away from high schools.”
He also emphasized that there are no age restrictions on hemp products in Texas. “There are no laws preventing teenagers from purchasing these products, and hemp shops are everywhere. They're targeting high school students and it's a serious problem.”
Law revisions are coming
The regulatory environment for medical marijuana in Texas is very different from the free use of marijuana. However, change may be on the horizon. Lieutenant Governor Dan Patrick announced plans to push for a ban on cannabis-derived Delta-9 and Delta-8 products in the 2025 legislative session. “The school district was armed and law enforcement finally got involved,” Richardson said.
“Texas has a population of 30 million people and only has three medical marijuana licenses. Meanwhile, marijuana shops are operating unchecked,” Richardson said. He added that he hopes to save the medical marijuana market while curbing the cannabis market. hemp industry
“Many people are unaware of the risks associated with unregulated hemp products. It's up to us to educate through media campaigns and by engaging directly with patients,” Richardson said. . “People need to know that what is sold at gas stations and convenience stores is untested and unregulated. It's dangerous and it's becoming increasingly problematic.”
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