Inside DPS’s High-Risk Bet on Nine MSOs—and Why the Industry Pushed Back

OG article by Jay Maguire

December 10, 2025

Texas's medical cannabis program faces a pivotal shift as the Department of Public Safety (DPS) conditionally selected nine multistate operators (MSOs)—Verano Texas, LLC; Trulieve TX, Inc.; Texas Patient Access, LLC; Lonestar Compassionate Care Group, LLC; Lone Star Bioscience, Inc.; PC TX OPCO LLC (PharmaCann); Texa OP dba TexaRx; Story of Texas, LLC; and Dilatso, LLC—to expand the Texas Compassionate Use Program (TCUP). This advancement followed Phase I licensing based on self-reported applications lacking independent verification of financial stability, federal tax exposure under IRS §280E, capitalization, corporate ownership, and out-of-state compliance histories. Several applicants lacked active Texas business entities, a basic requirement. DPS initiated "additional due diligence" post-selection, including reviews of disciplinary history, litigation, and financial suitability, reversing the verify-first logic after public scrutiny. Blazed News first exposed these deficiencies, with coverage by the Dallas Morning News prompting DPS to announce enhanced scrutiny the same day, illustrating how reporting drives regulatory changes. Parallel hearings by the Texas Department of State Health Services (DSHS) and Texas Alcoholic Beverage Commission (TABC) address consumable hemp and THC products, establishing 21+ age verification with enforcement powers, including permit suspensions. They aim to standardize lab testing, COA formats, accreditation, data retention, and verification to end inconsistent methods and field enforcement challenges. Penalty structures include fines, suspensions, revocations, and market exclusions, though no state system ensures COA authenticity or chain-of-custody tracking. CRAFT, co-founded by Rhiannon Yard and Jay Maguire (also Texas Hemp Federation Executive Director), provides compliance solutions like employee training, brand/lab verification, blockchain tracking, tamper-proof COAs, and good-faith immunity. Its proposal to the Governor emphasizes product verification and transparency to replace litigation with infrastructure. Texas risks market instability if verification lags influence, as unverified MSOs could impact patients, retailers, and jobs. The process exposed reactive regulation, urging proactive audits to maintain trust.