Everything’s bigger in Texas, unless you’re talking about the medical cannabis program. It’s no secret that Texas has the potential to be a behemoth in the space, but for years, Texas’ medical cannabis program has lagged behind other states. At the same time, Texas’ booming hemp industry is fighting for survival.
Texas legislators took a big step towards growing its medical cannabis program last legislative session, and today, we discuss (1) new opportunities to apply to be a cannabis dispensing organization under the Texas Compassionate Use Program (TCUP), (2) how the latest legislative session changed TCUP under HB 46, and (3) what new Texas Department of Public Safety (DPS) rules are coming next.
New Opportunities to Apply for Dispensing Organization Licenses
Texas DPS is now taking dispensing organization applications and updates through September 15, 2025 (5 p.m. CT). As a reminder, a dispensing organization in Texas is licensed to cultivate, process, and dispense TCUP-legal cannabis products. This is the state’s biggest TCUP expansion with 12 new licenses on deck, substantially increasing statewide access to medical cannabis.
The TCUP expansion comes in two phases, where the DPS will award 12 new dispensing organization licenses to reach a total of 15 licenses statewide. Phase I prioritizes 2023 applicants, while Phase II is for new entrants. The DPS targets Phase I selections for December 1, 2025, and Phase II by April 1, 2026.
Applicants can apply here.
Existing Medical Cannabis Rules in Texas
Until August 31, 2025, TCUP allows physicians to prescribe low-THC cannabis to patients with specified conditions — but no smoking. “Low-THC” is <1% THC by weight, and administration is limited to ingestion, absorption, or insertion. Physicians must be registered prescribers, and only vertically integrated “dispensing organizations” (i.e., cultivate, process, or dispense) are licensed.
What changes on September 1, 2025, under HB 46?
- Dosage cap, not weight – “Low-THC” becomes ≤10 mg THC per dose, rather than a percentage by weight.
- Inhalation allowed – Pulmonary inhalation of aerosol or vapor is permitted when medically necessary, but smoking remains prohibited.
- Container limit – Max 1 gram THC per package/device.
- More qualifying conditions – Adds chronic pain, traumatic brain injury, Crohn’s/IBD, terminal illness, hospice/palliative, and certain research-program conditions.
- More licenses + momentum – DPS will issue 15 total licenses via competitive review and regional balance, with a use-it-or-lose-it startup clock (dispensing organizations must begin dispensing within 24 months or potentially lose their license).
- Satellites – Department-approved satellite locations roll out, with one-per-region limits until a dispensing organization is in every region. Licensed dispensing organizations will be able to securely store their cannabis products at these satellite locations.
- Data and product integrity – Patient data is expressly confidential; synthetic (non-plant) cannabinoids are prohibited.
What rules are coming next?
The DPS previewed three rule packages that will be in effect by October 1, 2025:
- Future application rounds – Sets the schedule and criteria for when DPS will accept, review, score, and award licenses after this window closes.
- Satellite security/design – Establishes the approval process plus design, security, and inventory-control standards for satellite locations.
- License discipline – Defines when DPS may suspend or revoke a license, including for inactivity and other compliance failures.
Conclusion
Make no mistake, this new law has the potential to dramatically increase the number of participants in Texas’ medical cannabis program – both in terms of operators and patients. This represents a new opportunity for would-be operators who missed out on initial licenses, and it promises to see a flood of interest and dollars pour into the state. If you are interested in applying for one of the new licenses, please contact our nationally recognized Cannabis Industry team for a consultation.