Hemp Businesses File Federal Suit and Seek an Emergency Order Against the Texas Delta-8 Rule

What Changed, and When

On July 31, 2026 — the same day the Texas Department of State Health Services rule took effect — a group of plaintiffs filed suit in the U.S. District Court for the Southern District of Texas, Galveston Division, asking a federal judge to stop the state from enforcing it.

The rule at issue is the one we described when it took effect: reinstated DSHS definitions of “tetrahydrocannabinols” and “marihuana extract”, published in the July 10, 2026 Texas Register, that place manufactured delta-8, delta-10, THCP and similar non-delta-9 isomers alongside Schedule I controlled substances under the Texas schedules.

According to the complaint, as reported by FOX 7 Austin, the plaintiffs are:

• Lifted Liquids, Inc., an Illinois-based manufacturer;
• The Happy Cactus Apothecary LLC, an Austin retailer; and
• Thomas Monti, a retired police officer living in Galveston County who both uses and sells consumable hemp products.

They sued Texas state and local officials, including DSHS, the Texas Attorney General, and local prosecutors.

What the Lawsuit Argues

These are the plaintiffs’ contentions. A court has not ruled on any of them, and the officials named have not yet filed a response.

• The agency exceeded its authority. The complaint says DSHS created a conflict between Texas statutes and agency regulations. Congress defined hemp in the Agriculture Improvement Act of 2018 as Cannabis sativa L. with no more than 0.3% delta-9 THC by dry weight, removing it from the federal Controlled Substances Act; the Texas Legislature adopted the same standard in House Bill 1325 in 2019.
• Due process. The suit claims the rule fails to give business owners, consumers and law enforcement fair notice of what is contraband, which it says violates the Fourteenth Amendment’s Due Process Clause.
• Supremacy and Commerce Clauses. The complaint argues the rule disrupts national supply chains and intrudes on federal protections for interstate transport.

Alongside the complaint, the plaintiffs filed an emergency motion for a temporary restraining order asking the court to block state health officials, the Attorney General and local prosecutors from making arrests, seizing property, or bringing civil enforcement actions while the case proceeds.

The industry’s stated stake in the outcome is large. Mark Bordas, executive director of the Texas Hemp Business Council, told CBS Austin there is “going to be widespread, irreparable damage done to an $11 billion-a-year industry.” That is the trade association’s characterization, offered here as a quotation rather than as a finding.

Who in Texas This Reaches

The case is about a statewide rule, so its outcome would reach the same groups the rule does:

• Retailers and their employees at the roughly 14,000 DSHS-registered consumable hemp locations across Texas.
• Manufacturers and distributors holding DSHS licenses, including out-of-state companies shipping into Texas.
• Consumers who bought manufactured delta-8, delta-10 or THCP products and may still be holding them.
• Anyone stopped, cited or charged in connection with one of these substances since July 31.

Texas has 254 counties, and charging decisions rest with local police departments and district attorneys. A federal order, if one issued, would reach the officials it names on the terms the court sets — not automatically every agency in the state.

What This Does Not Change

This is the part most easily misread, so it is worth stating plainly.

Filing a lawsuit does not suspend a rule. As of August 3, 2026, the DSHS definitions that took effect July 31 remain in effect. A request for a temporary restraining order is a request. Until a judge grants one, and only to the extent the order says, nothing about enforcement has changed.

The 0.3% delta-9 hemp standard is not what is being reclassified. Hemp and hemp-derived products at or below 0.3% delta-9 THC by dry weight remain lawful under Texas law. CBD, CBG and CBN products are not the target.

This is a separate fight from the March 2026 consumable-hemp rules. Those rules — recalculating “total THC” to count THCA, raising licensing fees, and restricting most smokable hemp flower — are legally distinct and have been in effect since the Fifteenth Court of Appeals dissolved a temporary injunction in early June 2026, as Houston Public Media reported. Conflating the two is the single most common error in coverage of this subject.

The state-court case is also still alive. When the Supreme Court of Texas decided Texas Department of State Health Services v. Sky Marketing Corp., No. 23-0887 on May 1, 2026, it dissolved the injunction that had frozen the definitions but left the underlying challenge to continue in the lower courts. The new federal suit runs alongside that, on different legal theories, in a different court system.

What Kind of Claim or Option Might Apply

Nothing on this page can tell you whether a particular product, purchase, shipment or business decision is lawful. That is a question about specific facts, and it is what a lawyer reviews with you. Depending entirely on the circumstances, a Texas attorney may look at questions like these:

• For someone charged or under investigation — what the substance actually was, how it was manufactured, what the certificate of analysis and lab testing show, the weight and form involved, whether conduct occurred before or after July 31, and how the evidence was obtained.
• For a licensed business — DSHS license and registration exposure, how to respond to an agency inquiry, inventory and disposal questions, supplier representations and contract obligations, and insurance.
• For a business considering its own legal options — whether it has standing to join or file a challenge, and what the pending federal and state cases would and would not resolve for it.
• For anyone watching the docket — what a temporary restraining order would actually cover if granted, how long it would last, and who would be bound by it.

An attorney can also tell you plainly when the facts are not favorable, which is worth knowing early rather than late.

Why Acting Quickly Can Matter

A few practical realities, stated as facts rather than as instructions:

• Emergency motions move on short timelines. A judge may rule on a temporary restraining order quickly and may set an expedited preliminary-injunction hearing. What is accurate this morning may be out of date this afternoon.
• The rule is in effect while the case is pending. Decisions made in the meantime are made under the rule as it stands today.
• Early representation shapes a criminal case. Decisions made in the first days — before charges are filed, at a bond hearing, or when a person is asked to speak with officers — are difficult to revisit later. It is best to talk to a lawyer before talking to police.
• Records are easier to preserve than to reconstruct. Packaging, receipts, batch numbers, invoices and certificates of analysis are available now in a way they may not be months from now.

None of that calls for panic. It calls for getting the actual facts in front of someone qualified to read them.

Sources

1. FOX 7 Austin — Hemp businesses sue Texas over Delta-8 Schedule I rule (August 3, 2026; sourced to the complaint filed in the Southern District of Texas, Galveston Division)
2. CBS Austin — Hemp groups sue to block Texas health agency’s delta-8 THC ban, citing harm (August 2, 2026)
3. Texas Department of State Health Services — Schedule of Controlled Substances notice, Texas Register (published July 10, 2026; effective July 31, 2026)
4. Supreme Court of Texas — Texas Department of State Health Services v. Sky Marketing Corp., No. 23-0887 (decided May 1, 2026)
5. Agriculture Improvement Act of 2018 (the 2018 Farm Bill), Pub. L. 115-334
6. Texas Legislature Online — House Bill 1325, 86th Legislature (2019)
7. Texas Health and Safety Code Chapter 481 — Texas Controlled Substances Act
8. Texas DSHS — Consumable Hemp Program
9. Houston Public Media — Smokable hemp rule back in effect after appeals court decision (June 10, 2026)