Cannabis companies team up with Texas alcohol industry to keep THC drinks legal
- Jason Beck
- Apr 8
- 4 min read
April 8, 2025
Texas cannabis companies hope alliance with the liquor industry will protect their $8 billion industry.
Hundreds of people signed up to testify on the future of cannabis at the Texas Legislature on Monday, many backing a proposed law that would only allow THC in drinks and tie the industry forever to the liquor industry.
Texas law grants alcohol distributors enormous market power, and small breweries and distillers have long complained about their predatory behavior. However, some in the hemp industry believe only a deal with the devil will save them from a total ban on the products that generate 90% of their profits.
Lawmakers are debating two cannabis bills this year, both of which will curtail the hemp industry. The only difference between hemp and marijuana is the concentration of THC, the ingredient that makes you high. Marijuana is illegal in Texas, but hemp companies have found ways to create products that make you high, angering conservatives.
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Lt. Gov. Dan Patrick ramrodded Senate Bill 3 through the upper house. It calls for a ban on all THC products, including the very popular delta-8 and delta-9 gummies. State Rep. Ken King, R-Canadian, has introduced an alternative, House Bill 28, which was heard in the State Affairs Committee on Monday.
Tomlinson's Take
If passed, HB28 would increase licensing and retailing fees, ban synthetic products, require more product testing, limit sales to people over 21, limit sales to 10 mg of THC per sale and prohibit packaging that appeals to children.
So far, not bad. Legalizing marijuana would be easier, but if SB3 is the only alternative, then HB28 is slightly better. Then comes the part where you realize this is a giveaway to one of the state’s most politically powerful monopolies: alcohol distributors.
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HB28 would ban flowers and edibles that contain THC, but allow drinks. The Legislature would put the Texas Alcohol Beverage Commission in charge of THC regulation and funnel all THC drinks through the alcohol industry.
Texas law requires brewers, distillers and winemakers to go through a state-licensed wholesaler as an intermediary to retail shops. Getting permission to sell wine or beer is relatively easy, but obtaining a liquor license is extremely difficult. How THC would fit in is left to TABC.
Jake Bullock, CEO of THC beverage maker Cann, told me leveraging existing alcohol regulations and supply chains would solve many of the problems conservatives complain about. He uses alcohol distributors and retailers across the country, including Total Wine in Texas, and thinks this is the best way to keep THC products on shelves.
“One of the good things about the alcohol supply chain is it's been around for a long time,” Bullock said. “They know what they're doing, and they're really good at it. They're politically connected, right? So, in some ways, they're able to do things.”
Indeed, alcohol wholesalers love their state-mandated role as middlemen, which guarantees profits forever. However, when I interviewed entrepreneurs who had started new breweries, distilleries or wineries, they described hellish negotiations with monopolists intent on extracting every penny they could from these young companies.
Craft breweries and wineries had to fight the wholesalers’ lobbyists for nearly a decade before getting a bill passed that allowed them to sell directly to consumers from their own facilities.
A hemp entrepreneur told the Austin Chronicle recently that one wholesaler demanded an ownership share in his business before striking a distribution deal. HB28 would give national companies such as Cann an edge over local startups.
HB28, as currently drafted, would only allow THC drinks, not gummies or other edibles, because wholesale alcohol distributors are geared to move bottles around. It’s not about THC but what’s convenient for wholesalers.
Bullock says Monday’s committee hearing allows lawmakers to tweak HB28 to make it clearer and fairer. The final version is important because it will determine the future of an $8 billion industry that employs 50,000 Texans.
“We want them to pass a bill. We want it to be a sensible bill,” Bullock said.
Everyone agrees that only adults should have legal access to THC products. Funneling them through the system regulated by TABC may seem convenient, but that system desperately needs an overhaul, too.
Lawmakers should be thinking bigger, legalizing marijuana and rethinking how all intoxicants are sold in Texas. Instead, they’ll likely make a handful of companies much, much richer.
If you’d like to learn more, I’ll be hosting a live, online event entitled, “Will marijuana ever be legal in Texas?” at noon on Wednesday, April 16. I’ll be talking to Rice University’s Katharine Harris, medical cannabis advocate Piper Lindeen and University of Houston biochemist Dr. Jokubas Ziburkus. Sign up for free at https://tinyurl.com/nhvjyrmh.
Award-winning opinion writer Chris Tomlinson writes commentary about money, politics and life in Texas. Sign up for his “Tomlinson’s Take” newsletter at houstonchronicle.com/tomlinsonnewsletter or expressnews.com/tomlinsonnewsletter.
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