How to Get a Cannabis License in Texas: The Comprehensive 2025 Guide

Texas has one of the most restrictive medical cannabis programs in the United States. Introduced by the Texas Department of Public Safety (DPS), this program is known as the Compassionate Use Program (CUP). The CUP allows low-THC medical cannabis products to be cultivated and used for diagnosis and treatment. 

It is difficult to enter the medical cannabis business in Texas because of the high licensing fees, operational requirements, and the state regulations. Nonetheless, it is possible to penetrate the cannabis market and thrive financially. 

In this guide, we will address issues related to the Texas cannabis license and the two main licenses, ie., the Dispensing Organization License and Consumable Hemp Product authorization. We will also discuss medical cannabis qualifying conditions, new laws, the economic part, and the process of obtaining it.

Texas Medical Cannabis Licensing Explained

Strict regulations apply to businesses in Texas that desire to produce, manufacture, and distribute medical cannabis products. Texas Compassionate Use Program (CUP), regulated under the Texas Department of Public Safety (DPS), controls privileges and varieties of activities that a business can undertake in the state cannabis industry. If you are seeking a Texan cannabis license, you’d need to acquire the following two licenses.

• Dispensing Organization License
• Consumable Hemp Product authorization

1. Dispensing Organization License

A company seeking a Texas cannabis license should get a Dispensing Organization License. Under this license, organizations grow financially by processing and distributing low-THC cannabis products to suitable patients.

Requirements:

• Application Fees: The application fee to acquire a Dispensing Organization License is $7356.
• Biennial License Fee: The Biennial license fee is $488,520, and it will be valid for two years.
• Renewal Fee: The license can be renewed after two years in $31,8511.
• Operational Capacity: The applicants should be capable of putting all operations such as cultivation, processing, extraction, manufacture, testing and dispensing of the products in one roof. This implies that everything is supposed to be done in the same secured premise.
• Zoning Guidelines: The firm should be registered in the city zoning laws and ordinances. This is crucial because the local jurisdiction in Texas can impose limitations over location and the size of the cannabis businesses.
• Security: There must be maximum security policies that business firms of cannabis must propound. These policies involve the application of security cameras, alarms, no go zones, and locking of cannabis substances.
• Registration of Employees: All employees must be registered with the Texas Department of Public Safety. This involves background checks and ensuring that the employees possess the relevant certifications to work in the cannabis industry.

Incurring a Dispensing Organization License is competitive. Prospects are determined by qualifications, operation plans, and the ability to comply with state requirements. It could take some time, and the license granted is limited.

2. Consumerability of Hemp Product License

The Consumable Hemp Product License category is provided to businesses that wish to produce, process, or sell consumable hemp products (CHPs), such as:

• Edibles
• Oils
• Tinctures

The Texas Department of State Health Services (DSHS) regulates this license.

Essential Licensing Requirements of Consumable Hemp Products:

• License Fee: The annual license cost is $258 spent on each location. This is a one-year license, which has to be renewed every year.
• Retail Registration Fee: Retailers interested in selling any consumable hemp product will have to pay a retail registration fee of 155 dollars per retail store, which is also only good for one year.
• Permitted Diversities: Under the license, businesses can manufacture, process, and sell consumable hemp products. This involves the establishment of hemp products such as edibles, topicals, and tinctures, among others, which will be used by consumers.
• White Labeling: Retailers are allowed to white-label consumable hemp products. This enables the companies to rebrand products of other companies in their name.
• Repackaging: Retailers can also repackage consumable cannabis products to be sold to people, and this should be in accordance with all the requirements required by the state as far as labeling a product and its safety are concerned.

The Texas cannabis license procedure requires business entities interested in a Consumable Hemp Product License to apply online and pass a background check. The application process for this license is quite simplified compared to the Dispensing Organization License. However, it is essential to state that the safety and quality of the product can be guaranteed with the DSHS guidelines.

Eligibility of Medical Cannabis in Texas

Texas does allow medical Texas cannabis licenses, but only in case of certain qualifying conditions of patients. These criteria are stipulated in the Texas Compassionate Use Program. Since 2025, the following medical conditions can be diagnosed and treated with and administered medical cannabis to patients:

• Amyotrophic Lateral Sclerosis (ALS)
• Autism
• Cancer
• Epilepsy
• Incurable Neurodegenerative Diseases
• Multiple Sclerosis ( MS )
• Post-Traumatic Stress Disorder (PTSD)
• Seizure Disorders
• Spasticity

Prescription Process

Patients with any of the above conditions must be permanent residents of Texas and issued prescriptions by physicians registered with the Compassionate Use Registry of Texas (CURT). The doctor will assess the patient’s health condition and decide whether medical cannabis can become a sufficient treatment strategy.

A medical Texas cannabis license prescription does not have an age limit to receive it. Still, the underage child must have the consent of the parent or a legal guardian before accessing medical cannabis. This will guarantee that the parent/ guardian decides on the procedures to use in treatment.

New Legislative Developments

House Bill 46, which extends the medical cannabis system in Texas, was signed by the Texas Legislature in May 2025. It is predicted that this bill will significantly improve access to cannabis products amongst patients and correct some of the shortcomings of this program.

Some of the Important Clauses of the House Bill 46 are the following:

• New Qualifying Conditions: The bill proposes new qualifying conditions for medical cannabis, i.e., chronic pain, traumatic brain injury, Crohn’s disease, and terminal illnesses. With these inclusions, treatment with cannabis will become more available to patients affected by previously excluded conditions.
• More Dispensaries: The State of Texas will now have fifteen dispensaries, compared to three before the new law. This growth would enhance the accessibility of medical cannabis to patients and prevent the chain of bottlenecks in the supplies.
• Broader Product Forms: Under the bill, doctors will have the right to prescribe other varieties of medical cannabis in the form of patches, lotions, vaping devices, and suppositories. This gives patients more treatment choices that better suit their needs and preferences.

The legislative amendment is a continuation of a wider movement in the United States toward the widening of medical cannabis initiatives, prioritizing patient access and product diversity. Texas has what is described as a relatively restrictive medical cannabis program, but it is soon to be changed, and it is expected that the alterations can produce better patient outcomes.

Financial Considerations

Starting a cannabis company in Texas is a very expensive venture. Besides the licensing fees, there are various other operating costs that a business should take into account in order to operate in the state.

Financial Critical Issues:

• Real Estate Costs: Identifying a good location that complies with the requirements of a dispensary or cultivation facility is expensive. Texas businesses typically benefit from high land rates to ensure zoning and adequate security standards.
• Compliance and Renovation: Change of facilities on security and operations can also mean a massive expense. Tight precautionary measures like surveillance tools and alarms coupled with safe storage ought to be observed in the cannabis plants in Texas.
• Staffing: The cannabis industry needs to hire and train various categories of workers, including dispensary workers, security guards, regulatory workers, and management workers. Training the workers about the existing legal standards and other regulations involving cannabis in Texas is a significant step towards ensuring they comply with the provisions.
• Inventory: Purchasing cannabis products and other consumables to sell out is also significant. Dispensaries will always need to supply low-THC products to meet the demands of registered patients.
• Consulting and Legal Fee: The cannabis industry’s development in Texas will be characterized by many legal and consulting questions. Second, businesses are encouraged to commit a portion of their financial resources to continuous legal expenses so that they remain in tune with the recent regime alert.
• Insurance: Cannabis companies in Texas must acquire different forms of insurance coverage to cover the risks faced in the flow of operations, e.g., property damages, theft, and liabilities.

The minimum amount required to start a cannabis business in Texas is estimated to be between 1.5 million and 5 million, depending on the size and capacity of the business. It consists of the initial set-up costs and the running costs of the business.

Deadlines and Timelines of Applications

The Texas Department of Public Safety (DPS) issues Dispensing Organization Licenses periodically after advertising application opportunities. 

• The last round of applications was opened January 16, 2025, and closed April 28, 2025. 
• The second application window is expected to be released at the end of 2025 or the beginning of 2026, when House Bill 46 will go into practice.

Main Deadlines to Be Remembered:

• January 16, 2025 – April 28, 2025: New application period of Dispensing Organization Licenses.
• Late 2025 or Early 2026: The next application period under the expanded program is anticipated to open.

Such timelines can be adjusted based on changes in the legislative or regulatory environment. Potential applicants should periodically be aware of the latest developments so that they can take advantage of application opportunities.

Key Takeaways

1. Limited regulations: Texas has one of the most limiting medical cannabis programs in the US and is not the ideal state to venture into. Nevertheless, it gives a chance to businesses that are ready to deal with its complicated regulatory system.
2. High Costs: Texas’s license and operational costs are very high. Prospective applicants are informed that they need to know that there will be huge start-up costs, including property, remodeling, labor, and license costs.
3. Limited Patient Access: The current Texas medical cannabis program does not serve too many patients. However, the recent update of legislation to help medical cannabis be more accessible through new qualifying conditions and the number of enhanced dispensaries.
4. Legislative: In May 2025, the House passed Bill 46, which significantly raises the medical cannabis program in Texas. The bill presents new qualifying restrictions that should be met, expands the number of dispensaries, and allows more products to be available.
5. Strategic Planning: It can be used by existing applicants, who legal and industry professionals advise about the Texas cannabis licensing maze. It is a very strictly regulated market, and the key to success is adequate planning and adherence to rules and regulations.

Conclusion

A cannabis business license in the state of Texas is not an easy task as it requires careful planning and outflow of cash and has to know the state’s regulations well. New businesses may now become market participants in Texas cannabis as the Compassionate Use program has recently been expanded. However, getting a license is not a smooth process, and businesses need to be ready to perform under strict operational conditions and meet strict security and compliance issues.

Those interested in receiving a cannabis license in Texas can find out more specific details of the receipt and help with the red tape of Texas cannabis regulations by contacting law firms and other specialists that operate within Texas and specialize in the licencing and regulations of Texas cannabis.