H.B. No. 169 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 possess and use cannabis within specified limits and outlines the responsibilities of the Texas Department of Licensing and Regulation and the Texas Commission of Licensing and Regulation in administering these new regulations. It also includes protections from legal action for individuals engaging in authorized cannabis-related conduct, while prohibiting certain activities such as operating a vehicle while intoxicated.

The legislation mandates the creation of rules for cannabis testing facilities and secure transporters, including safety standards for packaging and labeling. It introduces conflict of interest provisions, requires annual reporting on licensing activities, and establishes accounts for funding the regulation and oversight of cannabis operations. Additionally, the bill outlines local government regulations for cannabis establishments, including the need for ordinances and inspections, and prohibits the sale of cannabis products to minors. It amends various sections of the Health and Safety Code and the Tax Code, introducing new definitions and imposing 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 licensing entities by November 1, 2026.

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 (Health and Safety Code 443, Tax Code 494, Health and Safety Code 481, Subtitle E, Title , Tax Code 494, Occupations Code 551, Tax Code 151, Agriculture Code 122)