An Austin medical-cannabis company has hauled a slate of local hemp retailers and manufacturers into court this week, accusing them of pushing products that are far stronger than Texas law allows and, in some cases, tainted. Texas Original Compassionate Cultivation says independent lab tests show many items sold as hemp, including edibles, vapes and flower, actually carry marijuana-level delta-9 THC and other safety issues, and the company is asking a judge to shut down the sales and award damages for lost revenue.
What the suit says
In a lawsuit filed in Travis County, Texas Original names more than a half dozen sellers and brands, including Big Dan’s Hemporium, Cookies Creative Consulting & Promotions, Restart CBD, VIIA/Viia, CBD American Shaman, Green Cross ATX/Green Cross CBD and others. The complaint accuses them of dressing up marijuana as legal hemp and selling it across Texas.
The filing highlights some of the products it says are especially over the line, including a "Marshmallow Dream" cereal bar that allegedly contained around 116 milligrams of delta-9 THC, which the suit notes is about 10 times higher than the state limit for hemp products. It also points to cartridges and vapes that reportedly tested in the double digits for delta-9 content. Those details, along with the full list of defendants, were laid out in coverage by the Austin American-Statesman.
Lab testing and the evidence
Texas Original told the court it commissioned more than 200 independent chemical analyses of items being sold as hemp and concluded that "the vast majority" did not meet the legal definition of hemp, according to the petition. The suit also claims that some of the products tested positive for pesticides and microbial contamination and that, in multiple cases, certificates of analysis were falsified.
Those allegations form the basis of the company’s claims of false advertising, unjust enrichment and related counts against the retailers and manufacturers. KUT reviewed the court filings and the underlying testing claims in its reporting.
Regulatory backdrop: why 0.3% matters
Under Texas law, set out in House Bill 1325, hemp is defined as cannabis that contains no more than 0.3% delta-9 THC by dry weight. Anything over that threshold is considered marijuana under state law, which is why the decimal point suddenly matters a lot for retailers.
This spring, the Texas Department of State Health Services adopted what it calls a "total THC" testing approach, along with higher licensing fees for hemp businesses. Those changes, recorded in the Texas Register, have prompted fierce pushback from parts of the hemp industry, with trade groups arguing that the rules would effectively wipe many smokable and concentrate products off store shelves.
Separate DSHS guidance requires retailers to register with the state and conduct safety testing for consumable hemp items. Those agency rules are now at the center of competing arguments over how strictly the state can police hemp products and how much responsibility falls on businesses to prove they are in compliance.
Legal fight and temporary injunction
The new lawsuit lands on top of an ongoing legal brawl over the DSHS rules themselves. Earlier this spring, a Travis County judge temporarily blocked key pieces of the agency’s smokable-hemp regulations, a move that has allowed many THCA flower and concentrate products to stay on shelves while a separate case plays out.
In that parallel fight, plaintiffs and state regulators are clashing not only over lab math and testing methods but also over whether DSHS went beyond what lawmakers authorized when it rewrote its testing and fee rules. The broader legal stakes, and what the temporary injunction has meant for retailers, were detailed by Texas Tribune.
Responses from both sides
Texas Original has framed its lawsuit as a bid to protect the state’s tightly regulated medical cannabis program and keep consumers safe. Company representative Heidi Coughlin told reporters that "our position is succinct, it’s based in law, and we are confident it will succeed in court," according to prior coverage.
Defendants, for their part, are not exactly taking it on the chin. An attorney for one group of retailers blasted the complaint as "less like a legitimate effort to vindicate a legal right and more like a 39-page hissy fit," the Austin American-Statesman reported. The Statesman also notes that at least one defendant has already moved to shift the case into Texas’ newer Business Court system.
What to watch next
For now, the action will be mostly procedural. Expect a flurry of motions, including requests for injunctions and likely attempts to get some or all of the claims tossed. If the case goes to trial, any verdicts could be followed by appeals, which means the hemp market in Texas could remain in a legal gray zone for months.
At the same time, regulators do not have to wait for a civil judgment. DSHS has the power to detain products and revoke retailer registrations when it finds violations of safety or labeling rules, so this fight could produce both courtroom fireworks and behind-the-scenes administrative enforcement.
Court dockets and local outlets will be the best way to keep tabs on what happens next. KUT and other reporters are continuing to track developments as the case moves forward.
