Texas is getting ready for when legal weed becomes a local industry

Update May 5, 2017 at 4:58 p.m.: On Monday, the Texas Department of Public Safety gave three companies conditional approval to "cultivate, extract and dispense" marijuana that is less than 0.5 percent THC by weight, according to the Austin Business Journal.

Surterra Texas, which is part of a company that produces medical marijuana in Florida; Cansortium Texas, a subsidiary of a company that also operates in Florida; and Compassionate Cultivation were chosen from 43 companies by a panel of five representatives from different state departments expected to work directly with the cannabis industry.

Original post:

The message of the Southwest Cannabis Conference and Expo in Fort Worth was clear: Marijuana is coming to Texas. And not in a Reefer Madness, fear-baiting kind of way.

Doctors and lawyers educated attendees Saturday and Sunday about the latest cannabis research and legislation, while entrepreneurs showed off technology developed to help manufacture, extract and sell weed-infused products. Reggae music played softly in the background as attendees meandered between booths and lectures, many intent on finding their way into the local industry at the ground level.

Weed is "the gold of our generation, it really is," said Dallas resident Chez Garza. "We gotta make some money out of it."

Currently, 29 states and the District of Columbia have some form of legal marijuana, either for medicinal purposes or "adult use," as experts at the trade show referred to recreational consumption. The Lone Star State will soon join the list: In 2015, the Legislature green-lighted the Compassionate Use Act, which allows for the production of hemp and its non-psychoactive byproduct cannabidiol (CBD) to prescribe to epilepsy patients, though the industry here has yet to get off the ground.

That's why it's no coincidence it was the Southwest Cannabis Conference's second year in North Texas, said co-founder and former prosecutor Demitri Downing. The state's embrace of medical cannabis provides immense opportunity, he said, and there are endless ways residents can take advantage of it.

"The truth of the matter is marijuana is medicine, marijuana is a drug and should 100 percent be treated as such, which means a medicinal marijuana market is in the future for Texas ā€” period," Downing said. "And how that looks and how evolves regulatory-wise is up to the people of Texas."

And therein was the purpose of the conference: to educate Texans about where the state stands on medical marijuana and how residents can learn from other places that already have it.

Here are four things you should know about cannabis in Texas.

1. The barriers to entry in medical cannabis are very high (read: costly).

Texas may have taken its first steps into developing a medical marijuana industry, but residents can expect its development to be slow-going.

Only three companies will be issued licenses to grow medical cannabis in the state this year, according to Kayla Brown, executive director of Texas Cannabis Industry Association. Those three will be chosen from a pool of 43 applicants by a panel of five representatives from different state departments expected to work directly with the cannabis industry, such as the Department of Agriculture and the Department of Health and Human Services. Licensees are expected to be chosen by April 30.

Brown said legislators are intentionally starting small to figure out the regulatory logistics with a few companies before expanding the opportunity to others.

Those companies will also have to be able to afford the cost of doing business. According to the TCIA, it costs $7,356 just to apply for the license to grow, process and sell. If approved, businesses will need to pay another $488,516 for the cost of the license, plus $530 per manager or director to register them with the state.

Dallas resident Michael Ray owns 110 acres of land near the Red River, which he was hoping could be used to cultivate hemp. The dollars and cents, however, would keep him from ever being able to do so.

"Everybody's talking me out of the licensing. Texas made the licensing so prohibitive that you just can't do it," Ray said. "The big boys will take it over from the start."

Brown is hopeful, though, that once legislators see the successes for patients with intractable epilepsy, they'll be receptive to having more companies involved and even more medical conditions to be treated this way.

"It's going to be a domino effect. This is just getting our foot in the door," she said. "DPS has already expressed interest in expanding it; they're already ready to issue more licenses. It's just matter of we gotta get the regulatory framework worked out, gotta get these things in line."

2. Current laws are confusing and oftentimes conflicting.

One of the biggest caveats to becoming involved in medical cannabis is that the industry resides in a regulatory gray area.

At the beginning of the marijuana boom, for example, many businesses had trouble finding banks that would work with them for fearing of having their assets seized by the federal government. Because of this, many dispensaries and manufacturers turned to state banks and credit unions, which would accept cash deposits for a hefty fee, said Kenneth Boiarsky, senior supervisory attorney at Hoban Law Group.

"The space between federal illegality and state legality requires constant attention," Boiarsky said during one of the panels. "Not only do the rules conflict, the exposure of whether or not they'll be enforced does too."

Another example is hemp, which some at the conference called the innocent bystander of the war on drugs. Because hemp and marijuana are part of the same plant family, the Controlled Substances Act of 1970 lumped them together as illegal to grow without a license from the Drug Enforcement Administration. Texans will still see CBD products available for sale in the state, however, since it is legal to import hemp from outside the U.S. as well as from a select number of places inside the country under President Barack Obama's 2014 farm bill, which allows the cultivation of hemp for research purposes ā€” as long as your state has similar laws on the books.

Confused yet?

3. Medical cannabis is driving enthusiasm, but the hemp plant could have wider economic implications.

Much of the enthusiasm around cannabis revolves around its use medicinally and recreationally. But according to Cole Markus with the Texas Cannabis Industry Association, the greatest economic impact from legalization may be in the other ways hemp can be used to make everyday products more sustainable.

Compared with cotton, he said, hemp requires less water to produce, grows faster, and requires fewer pesticides because it is naturally resistant to bugs. Hemp is also biodegradable and fire-retardant, suggesting it could not only be a substitute for cotton-based products and plastics but also for things such as home insulation.

"Recreation is a little bit of a bubble. Medical is going to give more value because of the people who need this to stay alive. You'll have sustained sales," Markus said. "I see a larger value in the long-term in hemp and project a bigger market because of the utility."

Patrick Moran, CEO of AcquiFlow, at a possible future site for the Texas Cannabis company that plans to produce CBD oil for epileptic patients in Gunter. Morgan is hoping to be one of the first licensed growers in the state.

4. The cannabis industry will need more than just growers and dispensaries.

While the most obvious entry point into the cannabis industry may be growing and selling marijuana, experts at the conference emphasized it will need other professionals to help build the infrastructure.

On a panel about careers in cannabis, Dr. Scott Biers of Green Well encouraged attendees not to undermine ancillary professions, such as medicinal research and pharmaceuticals. Others mentioned financial advising, education, social injustice, technology, advertising and more.

These professionals will help cultivate a cannabis culture here in Texas and ultimately lead to a safer environment and more informed discussions around the drug, said Drayah Sallis of Healthway Education Systems, which provides cannabis education and training to health care professionals.

"If you're in behavioral health, if you're a caregiver, if you're a physician, if you're an educator or teacher," Sallis said, "there is room for you in this industry."

Carol Taylor contributed to this report.

Goes Well With...

#Movies

SXSW: 'Rolling Papers' is more newsroom documentary than stoner movie

#Pop Culture

Willie, Snoop build brands as pot industry emerges from smoky shadows

#Texas, Y'all

Kinky Friedman releasing new album with a little help (and weed) from Willie Nelson

#Music

Did you see what Snoop Dogg gifted Willie Nelson for Christmas?

#Fun Places and Events

Upcoming weed convention in Fort Worth plays to cannabis culture

#Music

Texas' favorite stoner Willie Nelson wants Loretta Lynn to try pot again

#Texas, Y'all

I saw Willie Nelson perform Saturday night, and it was beautiful, and it was sad

>