Are you wondering how to open a dispensary in Texas? On this page, you will find not only the most up-to-date information on cannabis dispensary business opportunities in Texas but also insightful forecasts regarding what the future may hold for the state. Cannaspire’s Cannabis consultants support operators from application through daily operations.
Any kind of recreational marijuana use, possession, distribution, production, cultivation, or sale is prohibited under Texas law. There is a medicinal marijuana program available to residents of the state. Low-THC cannabis oil is legal, but only for people with refractory forms of epilepsy.
Through the Texas Compassionate Use Program (CUP), the state has taken a cautious step into medical cannabis. Licensed organizations must operate under a vertically integrated model, meaning cultivation, processing, and dispensing all happen under one roof. The program limits products to low-THC cannabis (up to 1% THC), making it more restrictive than many other states but still offering an important entry point for qualified businesses.
The 88th Texas Legislature convened on January 10, 2023, and concluded its 140-day regular session on May 29, 2023, known as “Sine die.” During this session, there are multiple marijuana-related measures, including legalization bills SB 209 introduced by Sen. Sarah Eckhardt, HB 1831 by Rep Talarico, and HB 1937 by Rep. Jessica Gonzalez.
On April 26th, 2023, the Texas House of Representatives gave preliminary approval to House Bill 218, a legislation that would decriminalize possession of small amounts of marijuana reclassifying it as a Class C misdemeanor with a fine of up to $500. However, the bill ultimately stalled in the Senate and did not become law. Additionally, the House considered a broader recreational marijuana legalization bill, House Bill 3652, which would allow possession and use of up to 2.5 ounces of cannabis by adults 21 and older, home cultivation of up to 12 cannabis plants, and commercial production and sale of marijuana products, taxed at 10%. HB 3652 was left pending in committee and did not advance.
On May 20th, 2024, a survey indicated that Texans show record support for cannabis legalization and decriminalization. The poll reveals that over 60% of Texans favor legalizing recreational marijuana, and an even higher percentage support decriminalizing possession of small amounts. This shift in public opinion reflects growing bipartisan backing, with significant support across different political groups. The increasing approval for cannabis reform suggests potential legislative changes in Texas’ future.
On November 12th, 2024, a Texas state lawmaker filed HB 1208 to legalize and regulate cannabis for adults aged 21 and over. The bill allows possession of up to 2.5 ounces of marijuana, 15 grams of concentrates, and up to 10 ounces at home if securely stored. It also establishes a regulated market for cannabis production, processing, and sale, overseen by the Texas Department of Licensing and Regulation. Retail cannabis products would be subject to a 10% tax. As of March 10, 2025, HB 1208 was referred to the House Licensing & Administrative Procedures Committee, where it remains pending.
On February 24th, 2025, a newly introduced bill in Texas aims to decriminalize low-level marijuana possession. Filed by Rep. Joe Moody (D), HB 3242 proposes reclassifying the possession of up to an ounce of cannabis flower as a Class C misdemeanor, eliminating the threat of arrest and incarceration. Unlike the current Class B misdemeanor designation—which can result in up to 180 days in jail and a $2,000 fine—Class C misdemeanors are only punishable by a fine of up to $500, with no jail time.
On May 27th, 2025, the Texas Senate approved House Bill 46 to expand the state’s medical marijuana program, and by June 2, the Legislature had sent it to the Governor’s desk. Governor Greg Abbott signed the bill into law on June 20, officially expanding the Compassionate Use Program to include chronic pain and traumatic brain injury as qualifying conditions. It also permits inhalable cannabis products and increases the number of licensed dispensing organizations from 3 to 15.
On July 24th, 2025, as Texas lawmakers met in a special session focused on hemp regulations, a state legislator introduced a bill to legalize and regulate recreational cannabis statewide. House Bill 195 would allow adults 21 and over to possess up to 2.5 ounces of cannabis (including up to 15 grams of concentrates) and would establish a licensed, taxed market for adult-use sales. Notably, the proposal does not permit home cultivation and maintains prohibitions on public consumption and use in vehicles.
On August 8, 2025, the Texas Department of Public Safety’s Regulatory Services Division opened the application period for new and updated dispensing organization licenses under the Compassionate Use Program (TCUP). The window closed on September 15, 2025.
On December 1, 2025, the Texas Department of Public Safety opened Phase one of the Texas Compassionate Use Program expansion and named nine businesses to move forward for further due diligence review. These organizations received conditional approval only, meaning they cannot cultivate, manufacture, distribute or sell cannabis products until DPS completes its evaluations and issues a final license. DPS will request additional documentation and will not invoice license fees until each applicant passes all statutory, financial, and regulatory checks. Under House Bill 46, Texas will award a total of twelve new licenses across two phases, with the remaining three conditional licensees expected in Phase two by April 1st, 2026.
According to a special report, more than 1.5 million Texans over 21 partake in cannabis use monthly. Sales of cannabis in the state might reach $2.7 billion annually if it were legalized for adults. If Texas taxed cannabis sales at the same rate as Colorado, the state would generate more than $1.1 billion in additional state income every two years. Business licensing costs might bring in an extra $10 million annually. In addition, eliminating minor cannabis possession arrests and prosecutions in Texas may save the state an estimated $311 million annually.
Despite strong market projections, the regulatory path forward is still evolving, and some operators consult experienced Texas cannabis consultants before entering the market.
Section 487.201 of the Texas Health and Safety Code states that local governments in Texas may not impose limitations on the operations of medical dispensing organizations that have been granted a license by the state. Local governments cannot prohibit anyone from cultivating, producing, distributing, or even possessing cannabis with a low THC content.
Even though it is still against the law to consume marijuana for recreational purposes in the state of Texas, several counties within the state have moved to make the possession of small amounts of the substance less of a criminal offense. This may be accomplished by sending customers tickets or requesting them to take part in a marijuana-related “educational” session that lasts for four hours. Austin, Bexar County, Cedar Park, Dallas County, El Paso County, Harris County, Hays County, Nueces County, Plano County, Travis County, and Williamson County are among the local governments that have decriminalized marijuana.
In November 2022, five Texas communities decided to decriminalize possession of minor quantities of marijuana. Voters in Denton, Elgin, Harker Heights, Killeen, and San Marcos backed decriminalizing low-level possession in overwhelming numbers.
In June 2015, the Texas Legislature enacted Senate Bill 339, also known as the Texas Compassionate Use Act. This legislation gave organizations the authority to produce, process, and administer low-THC cannabis to patients who met the required criteria. Cannabis with a THC content of no more than 0.5% and a CBD to THC ratio of 20 to 1 was available for purchase by those diagnosed with intractable epilepsy and certified caregivers acting on their behalf.
Only permanent Texas residents may be registered in the Compassionate Use Registry of Texas. The Act assigned the Texas Department of Public Safety the duty of directing the statewide program for the supply of cannabis products to registered patients.
Texas Governor Greg Abbott signed House Bill 3703, which expanded the list of conditions for which medical marijuana may be prescribed. In addition, the law eliminated the requirements of a second physician’s opinion and a 20-to-1 concentration ratio. However, the bill did not alter the phrases “prescribe” and “prescription,” which may only be used to describe FDA-approved pharmaceuticals.
Patients in Texas who suffer from amyotrophic lateral sclerosis, autism, cancer, epilepsy, or one of the other qualifying conditions are legally permitted to participate in the Compassionate Use Program.
There are 82,475 registered medicinal marijuana patients in Texas as of April 2024.
According to Chapter 487 of the Texas Health and Safety Code, the Department must provide at least three licenses and not exceed the number of licenses required to guarantee appropriate statewide access and availability of low-THC cannabis for patients.
The most recent application period for Texas Compassionate Use Program (TCUP) dispensing organization licenses ran from August 15, 2025, to September 15, 2025.
Under House Bill 46, the Texas Department of Public Safety (DPS) is authorized to issue 12 new dispensing organization licenses, increasing the total from 3 to 15 statewide.
The licensing process is structured in two phases:
You can check the entire list of requirements in the Texas dispensing organization requirements. Given the detailed documentation and review standards, applicants often seek guidance in cannabis licensing when preparing their submissions.
The following is a breakdown of some expenses involved with opening a dispensary in Texas.
Republicans and Democrats in the Texas House launched efforts during the legislative session of 2021 to reduce the criminal penalties associated with marijuana possession. Some of the proposed legislation would remove the possibility of receiving a prison sentence for the possession of a minor quantity of marijuana and would do away with the practice of automatically suspending driver’s licenses. Although the House approved several, none of them were ultimately enacted into law.
Both the incumbent Republican governor of Texas, Greg Abbott, and his Democratic challenger, Beto O’Rourke, have stated their support for decriminalizing marijuana, with O’Rourke focusing his campaign on the issue of legalizing the substance.
The Texas Republican Party has stated in its official platform that it favors cannabis being reclassified by the federal government from a Schedule I drug to a Schedule II drug. Schedule I drugs are substances with a high potential for abuse but are not accepted for medical use. Schedule II drugs are substances that have acknowledged medical benefits but still have a significant risk of abuse. Although this modification would allow the use of cannabis as a treatment for medical conditions, cannabis for recreational purposes would still be illegal at the federal level.
The Dallas Morning News and UT Tyler conducted a study in September 2022. They discovered that 67% of Texans are in favor of medicinal cannabis, and 51% are in favor of complete legalization.
As mentioned above, the 88th Texas legislative session is currently in session. Legalization measures include:
On the initial day of early filing, State Senator Sarah Eckhardt filed Senate Bill 209 on November 14, 2022, which, if passed, would bring Texas into the group of states that permit and regulate the use of cannabis by adults. The bill would establish a system for granting licenses for the cultivation and sale of cannabis to individuals aged 21 and above. As of February 15th, the bill is referred to State Affairs.
The proposed bill, House Bill 1831 filed by Rep Talarico on February 3, 2023, aims to legalize the use, possession, cultivation, and sale of marijuana up to 2.5 oz, with a limit of 15 grams in the form of cannabis concentrate, for individuals who are 21 years or older. In addition, the proposed bill also deals with the local regulation of cannabis establishments. A tax of 10% on cannabis sales will be imposed and the revenue will be allocated towards cannabis research and regulation agencies. As of March 8th, the bill is referred to Licensing & Administrative Procedures.
Democratic state Rep. Jessica González of Dallas introduced House Bill 1937 on February 6, 2023, which would give Texas counties and municipalities the power to legalize recreational marijuana at the local level. The bill instructs the Texas Commission of Licensing and Regulation to create the necessary regulations for the administration and enforcement of the law, including licensing, regulation, testing standards, and transportation. As of March 8th, the bill is referred to Licensing & Administrative Procedures. Our cannabis compliance experts turn day-one compliance into a lasting advantage.
If you’re planning to open a dispensary in Texas or preparing for future licensing opportunities, Cannaspire’s consultants can help you understand the regulatory process and prepare your business for success.
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