Licensing Blog

The Medical Cannabis Industry is Getting Bigger & Better in the Lone Star State

The Medical Cannabis Industry is Getting Bigger & Better in the Lone Star State

After four (4) years and only three (3) licensed Dispensing Organizations later, Texas will begin accepting applications for new Dispensing Organization licenses. In 2021, Texas Governor Greg Abbot signed HB 1535 which not only added PTSD and any stage of cancer to a patient’s potential qualifying conditions, but also increased the THC percentage from .5% to 1% in regulated cannabis products. As one of the most restrictive medical markets in the country, those vying to become part of Texas’ medical cannabis industry will have until April 28, 2023, to apply for a Dispensing Organization license. Let’s take a look at Texas’ Compassionate Use Program’s (“CUP”) upcoming license application process:

Under Texas law, there is only one (1) type of license provided under their CUP: Dispensing Organization. A “Dispensing Organization” means an organization licensed by the department to cultivate, process, and dispense low-THC cannabis to a patient for whom low-THC cannabis is prescribed under Chapter 169, Occupations Code.” Additionally, under this vertically integrated license, licensees will not only be responsible for secure transport, but also for testing all cannabis and medical cannabis products as the State of Texas does not provide separate licensure for testing laboratories. Although the application fee is set at $7,356 dollars, if fortunate to obtain a Dispensing Organization license, licensees will be required to pay a hefty license fee of $488,520 dollars! Such fee causes some concern amongst those in looking to enter Texas’ medical cannabis industry as the patient population is only at 40,000+ due to such restrictions on a patient’s qualifying conditions. There is some discussion that it is necessary to permit more qualifying conditions such as chronic pain to allow the State of Texas to see an increase in consumer revenue.

Similar to Florida’s medical cannabis industry, there is no residency requirements to apply. However, the applicant must provide proof of registration with the Texas Office of the Secretary of State, including a Certificate of Existence or Certificate of Authority and a Certificate of Good Standing from the Texas Comptroller of Public Accounts. Additionally, an applicant must demonstrate their financial capabilities such as a projected two-year budget and available assets, as well as proof of insurance ($1M each occurrence; $2M general aggregate limit; $1M product liability). Further, all directors, managers, and employees need to complete a criminal history disclosure, including registration with the CUP and submission of fingerprints to the State. As the CUP releases additional guidance on the application process and facility requirements, applicants will have a better understanding as to whether they are ready to enter such a lucrative market. You can view the Application Instructions HERE, as well as the CUP Dispensing Organization Application Form HERE.

One standout addition to Texas’ application program is their “Equity Program,” which provides special benefits to military service members, military veterans, and military spouses. Not only can a qualified individual apply for a license with the CUP if they held a license in Texas within five (5) years prior to the date of application, but also can apply if they hold a current license issued in another jurisdiction with licensing requirements substantially equivalent to the Act’s requirements for the license. Moreover, the CUP will allow alternative demonstrations of professional competence in lieu of existing experience, training, or educational requirements. 37 Tex. Admin. Code § 12.54 (2016).

As the deadline to apply is fast-approaching, now is the time to work with an Expert Team to help you begin developing a robust application to be a highly sought-after competitor in Texas’ viable medical marijuana market. Contact us today at to discuss your options!