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, creating Chapter 494 in the Health and Safety Code. The bill allows 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 that these fees cover regulatory costs. The legislation also includes protections for individuals engaging in authorized cannabis activities and prohibits actions such as driving under the influence of cannabis.

Additionally, the bill introduces provisions for local government regulation of cannabis establishments, defining terms like "fiscal year" and "qualifying local government." It establishes a local share account for cannabis regulation assistance payments to qualifying local governments and mandates that license holders obtain local authorization to operate. The bill emphasizes public health inspections, age verification for purchasers, and penalties for selling to minors. It amends existing laws to clarify the licensing framework 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 these changes 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 (Occupations Code 551, Tax Code 151, Agriculture Code 122, Subtitle E, Title , Tax Code 494, Health and Safety Code 481, Tax Code 494, Health and Safety Code 443)