Texas lawmakers filed bills to legalize adult use cannabis statewide, and for the first time the proposal comes with real numbers: a 15% wholesale tax, a 20% retail tax, and commercial sales starting in 2028.
What do HB 362 and HB 369 propose?
House Bill 362, filed November 9 by Democratic Rep. John Bucy III, and House Bill 369, introduced by Democratic Rep. Joe Moody, would establish a statewide regulatory framework for cannabis cultivation, manufacturing, processing, transportation, testing, and retail sales. Both are titled the Texas Regulation of Cannabis Act.
Adults 21 and older could possess up to two ounces of cannabis, including no more than 15 grams of concentrate, and cultivate up to 12 plants at home. Commercial licensing and oversight would go to the Texas Department of Licensing and Regulation. Local governments could regulate operating hours, locations, and the number of cannabis establishments, but they could not prohibit or unreasonably restrict licensed businesses.
How would the taxes work?
Transfers of cannabis from cultivators to retail establishments would face a 15% tax. Retail sales would face an additional 20% cannabis tax, on top of applicable general sales taxes.
The legislation would direct 50% of cannabis tax revenue to education, 25% to veterans assistance, 15% to substance abuse prevention and treatment, and 10% to local governments.
The two taxes stack across the supply chain, but the rates cannot simply be added to calculate an effective tax on retail sales. The combined burden would depend on wholesale transfer prices, retail markups, and how much of the taxes businesses pass along to customers.
When would sales actually start?
If enacted in their introduced form, the measures would take effect September 1, 2027. State regulators would have until July 1, 2028, to complete implementing rules, with commercial licensing required to begin by November 1, 2028.
The schedule gives prospective operators time to evaluate the market, but it also delays regulated commercial activity. Operators would still need to secure approvals, establish supply chains, and satisfy applicable regulatory requirements before selling.
What has to happen for the bills to pass?
A separate proposal, Senate Bill 237, filed by Democratic Sen. Carol Alvarado, would establish another framework for legalizing and regulating cannabis. The bills remain at the prefiling stage, and the 90th Texas Legislature convenes January 12, 2027.
The politics are the hard part. Democrats won the governorship and a majority in the Texas House in the November 3 election, while Republicans retained control of the Senate, so adult use legalization would still require support across party lines.
The incoming lieutenant governor is already talking about the options. Incoming Lt. Gov. Vikki Goodwin told MS NOW there are conversations about whether to expand the Texas Compassionate Use Program or legalize altogether, Marijuana Moment reports, and she said she is not in favor of a THC ban. Texas elected a pro cannabis governor and senator on November 3, and incoming Gov. Gina Hinojosa has said she wants to let Texas voters decide on marijuana legalization through a legislative ballot referendum.
Frequently Asked Questions
When would legal sales start in Texas?
If the bills pass in their introduced form, they would take effect September 1, 2027, with commercial licensing required to begin by November 1, 2028.
Where would the tax revenue go?
The legislation would direct 50% to education, 25% to veterans assistance, 15% to substance abuse prevention and treatment, and 10% to local governments.
Do the bills have a path through the Senate?
Not yet. Democrats hold the governorship and the House, but Republicans control the Senate, so passage would require bipartisan support. A separate Senate proposal, SB 237, offers another framework.
Source: IgniteIt, Texas Cannabis Legalization Bills Propose 15% Wholesale Tax, 20% Retail Tax and New Licensing System; Marijuana Moment, Incoming Texas Lieutenant Governor Discusses Options For Cannabis Reform, Including Full Legalization Or Medical Expansion