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 . This blog post represents an independent perspective.

The Rise of the Texas Hemp Boom

THC Cannabis | In Texas | Governor Veto | SB3 | Commercial Real Estate Impact

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% Delta-9 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) threatened 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 TEXAS 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 threatened 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:

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

Governor Greg Abbott’s Surprise Veto

in a dramatic turn, Governor Greg Abbott vetoed SB3 in June 2025.

🔹 “Allowing Senate Bill 3 to become law — knowing that it faces a lengthy battle that will render it dead on arrival in court — would hinder rather than help us solve the public safety issues this bill seeks to contain,” Abbott said in a public statement.

This decision paused what could have been the most sweeping anti-THC law in the country. It temporarily protects Texas’s $10B hemp market—but it doesn’t end the fight.

What Abbott’s veto means:

✅ Delta-8, Delta-10, and THCa remain legal—for now

✅ Retailers, landlords, and investors get breathing room

✅ The 2025 legislative session is likely just Round 1

Closing Thoughts for Commercial Real Estate Pros:

SB3 could’ve erased billions in retail value.

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

Why It Matters: Policy Impacts Property

At Beck-Reit Commercial Real Estate, we track legislation like SB3 not just as legal news but as a commercial market indicator. The veto doesn’t eliminate risk—it merely buys time.

Closing Thoughts for Commercial Real Estate Pros

🔁 SB3 was vetoed—but future legislation is inevitable
🧾 Review lease clauses now, not later
🏘️ Protect your assets from volatility with flexible, informed strategies