SB3 Cannabis in Texas

How a Hemp Crackdown Could Reshape Cannabis Retail Real Estate in Texas

This post is based on publicly available information from online sources, news articles, and marketing materials as of 6/10/2025 and does not include proprietary or confidential details. This blog post represents an independent perspective.

---

The Rise of the Texas Hemp Boom

Texas quietly became one of the hottest hemp retail markets in the U.S.—without ever legalizing recreational marijuana. That didn’t happen by luck.

In 2019, House Bill 1325 legalized hemp products containing less than 0.3% THC. Overnight, it opened a lane for entrepreneurs across Texas to dive in—launching brands, hiring staff, and opening storefronts. A real, scalable industry was born, far from tech or pharma.

With Delta-9 THC still restricted, hemp-derived cannabinoids like Delta-8, Delta-10, and THCa entered a legal gray area—and spread fast. Today, more than 8,000 retailers across the state support over 53,000 jobs and pump an estimated $10 billion into the Texas economy.

---

From Market Boom to Regulatory Ban: The Legislative Shift Reshaping Texas’ Hemp Industry

But in 2025, the tides began to shift. Senate Bill 3 (SB3) was introduced to ban all hemp-derived THC products, including Delta-8, Delta-10, and THCa.

Spearheaded by Lt. Gov. Dan Patrick and Sen. Charles Perry, SB3 flipped the script—from entrepreneurship to public safety. Lawmakers argued the bill was about protecting minors. For thousands of compliant business owners and landlords, it felt more like the rug being pulled out.

---

---

Senate Bill 3: The Crackdown Begins

Introduced in 2025, Senate Bill 3 (SB3) threatens to dismantle the hemp retail economy. Pitched as a bill to protect minors, it bans all consumable hemp products with psychoactive effects, including Delta-8, Delta-10, and THCa.

What’s at Stake:

• ❌ Thousands of storefronts could be shuttered overnight

• ❌ Tens of thousands of jobs on the line

• ❌ Millions in commercial rent revenue jeopardized

• ❌ Retail corridors at risk of mass vacancy and economic declineQuick Bullet Highlights:

Economic Implications of SB3

Let’s talk numbers:

• $10 billion+ market

• 8,000+ retail businesses

• 53,000+ Texas job

• Countless commercial leases and retail centers anchored by these tenants

  SB3 threatens to unravel that entire ecosystem. Most retailers can’t pivot fast enough. The fallout? Lost sales tax revenue, lower foot traffic, commercial vacancies, and real estate instability—especially in high-visibility corridors.

Shifting Strategies: How Businesses and CRE Are Adapting to SB3

The sharpest operators aren’t sitting still.

Retailers are pivoting to:

• Non-psychoactive wellness (CBD, CBG, adaptogens, supplements)

• Functional beverages and edibles without THC

• Events, workshops, and education

• Hybrid retail models—art, coffee, co-branded pop-ups
  

• Navigating the Landscape: Medical Use, Business Opportunity, and What Landlords Should Know

Landlords and investors need to track two trends:

1. Medical cannabis is highly regulated but could expand with HB 46. If it does, expect demand for licensed, compliant dispensary space.

2. Hemp retailers may pivot—but many will need support, flexibility, and informed leasing partners.

Clearing the Smoke: Understanding the Cannabis Confusion

Here’s your cheat sheet:

Cannabis vs. Marijuana
Same plant. “Marijuana” = high THC, illegal for recreational use in Texas. “Hemp” = <0.3% Delta-9 THC, legal.

Delta Breakdown

• Delta-9 = classic marijuana high

• Delta-8 = hemp-derived, milder, legal until now

• THCa = non-intoxicating raw, but becomes Delta-9 when heated

• CBD = no high, wellness-focused

Types of Retailers

• Dispensaries = licensed medical use

• Smoke shops / gas stations = selling Delta-8, THCa (for now), minimal regulation
  

Why It Matters: Policy Impacts Property

At Beck-Reit Commercial Real Estate, we track legislation like SB3 not just as legal news, but as market-shaping forces. The hemp boom proved that policy unlocks (or crushes) real estate opportunity.

If SB3 passes, Texas will lose more than products—it’ll lose momentum, investment, and the hard-earned gains of thousands of small businesses.

But those who understand the shift—and act early—can transform volatility into strategic advantage.

Texas Hemp Ban: Abbott's Decision Looms

As of now, Texas Governor Greg Abbott has not yet signed Senate Bill 3, which seeks to ban consumable THC products, including Delta-8 and Delta-10. The legislation was passed by state lawmakers in May 2025 and is currently awaiting executive action. Abbott has three options:

1. Sign the bill – It becomes law.

2. Veto the bill – It gets rejected and does not become law.

3. Take no action – After a certain period, the bill automatically becomes law without his signature.

Closing Thoughts for Commercial Real Estate Pros:

SB3 could erase billions in retail value—unless landlords pivot.

HB 46 could open new medical dispensary demand—if it passes.

The cannabis conversation is no longer about morality—it’s about money, policy, and property.

Let’s Talk Strategy.

If you're a landlord, developer, or investor navigating the hemp or cannabis sectors in Texas, connect with Beck-Reit Commercial Real Estate. We’re here to help you see around corners—and seize opportunities others don’t.

---

---

---