H.B. No. 195 establishes a comprehensive regulatory framework for the cultivation, processing, packaging, labeling, distribution, sale, testing, transportation, and possession of cannabis and cannabis products in Texas by introducing Chapter 494 into the Health and Safety Code. The bill permits adults aged 21 and older to use and possess specified amounts of cannabis while outlining the responsibilities of licensed entities, including growers and testing facilities. It empowers the Texas Commission of Licensing and Regulation to set rules and fees for the cannabis program, ensuring regulatory costs are covered, and includes provisions to protect individuals engaging in authorized cannabis activities from legal repercussions, while prohibiting consumption in public and vehicle operation.

The legislation also creates a cannabis regulation account and a cannabis testing and quality control account to fund the implementation of these regulations, alongside a local share account for municipalities with cannabis establishments. It mandates local governments to regulate cannabis operations, maintain complaint records, and conduct inspections, while prohibiting sales to minors and establishing penalties for violations. The bill amends existing laws to clarify the licensing framework for cannabis-related entities and imposes a 10 percent sales tax on cannabis products, with proceeds allocated to regulatory accounts. The Texas Commission of Licensing and Regulation is tasked with implementing the new regulations by July 1, 2026, and the bill will take effect 91 days after the legislative session concludes.

Statutes affected:
Introduced: Agriculture Code 122.103, Health and Safety Code 443.202, Health and Safety Code 443.2025, Health and Safety Code 481.062, Health and Safety Code 481.111, Occupations Code 551.004, Tax Code 151.313, Tax Code 494.0001, Tax Code 151.316, Subtitle E, Title , Tax Code 494.0001 (Subtitle E, Title , Tax Code 494, Occupations Code 551, Agriculture Code 122, Tax Code 494, Health and Safety Code 481, Tax Code 151, Health and Safety Code 443)