Recently the Texas Department of Public Safety released a first-of-its-kind [in the state] evaluation of the Texas Compassionate Use Program. It’s a huge win for transparency in one of the most opaque cannabis programs in the nation. You can find the full report, prepared by fellow data-driven policy aficionados, Weeds, LLC here.
So, what is the status of the Texas cannabis market? In this article we’ll take a quick look at the history of the program, some notable findings from this new report, and some of our own data, and discuss what it could all mean for the future of marijuana in Texas.
The Texas Compassionate Use Program
It may come as a surprise that weed is legal in Texas. But the Texas Compassionate Use Program, otherwise known by the cutest acronym in all of weed law, “TCUP” (pronounced “teacup”), was established to serve medical cannabis patients back in 2015. So why has hardly anyone heard of the Texas cannabis program? The simple answer is that extremely limited qualifying conditions, coupled with equally limited licenses, coupled with failures to launch have, coupled with other issues, as the analysis discusses, seriously derailed the program’s growth.
Since 2015 there have been a number of efforts to expand the program. Most notably, in 2019 and 2021 the state added a much broader variety of qualifying conditions to the otherwise restrictive and limited program. Since that change the number of patients in the program has skyrocketed.
Still, Texas has only 3 licensed dispensing organizations, all with very limited operations; Compassionate Cultivation (Texas Original), Surterra (dba Goodblend), and Fluent (Cansortium). Of these, Texas Original has a dominant market position with a reported 77.2% market share in 2022. In that same year Surterra fulfilled roughly 23% of all remaining patients, while only 32 (the number) were served by Fluent.
In partial recognition of these ongoing issues, the Texas Department of Public safety quietly requested applications for additional dispensing organizations in the Spring of 2023, without actually stating how many licenses may be awarded, or when they might be awarded. This new analysis represents a long-awaited step in the right direction for these applicants, physicians, and patients throughout Texas.
The Program Evaluation
The new evaluation combines an analysis of publicly available patient and physician data with newly developed data from requests for physician and patient input conducted in the spring of this year. It’s two objectives were
“1. Determine whether the current program provides for reasonable statewide access as required by statute. If not, recommend strategies for addressing gaps and planning for future growth; and recommend a framework for decision making to achieve program goals
2. Evaluate the CUP against best practices in other states’ low-THC and medical cannabis programs to maintain a high-quality program.”
No one who has been paying attention to, or involved with, this program needed a 70-page report to answer these questions.
To those not in the know, the answer is unequivocally “no.”
To better understand the core reasons why the program has struggled, it’s important to understand the unique market dynamics in Texas.
What Conditions Qualify You for a Medical Cannabis Card in Texas?
The current qualifying conditions are:
- Amyotrophic lateral sclerosis,
- Autism,
- Cancer,
- Epilepsy,
- Incurable neurodegenerative disease,
- Multiple sclerosis,
- Post-traumatic stress disorder,
- Seizure disorder,
- Spasticity, or
- Medical conditions designated by the Texas Health and Human Services Commission as part of an approved research program.
However, at the start of the program, when the initial determination was made that 3 licenses would be adequate to satisfy demand in Texas, only epilepsy was included. In 2019 the list of conditions was expanded significantly. Then, in 2021 post-traumatic stress disorder and research program conditions were added.
How Many Patients are in the Texas Compassionate Use Program?
As of August 2024, there are 93,110 registered patients in the Texas medical marijuana program; roughly 92,000 more than the mere 766 registered patients when the list of qualifying conditions was first expanded in June 2019, and roughly 86,000 patients, or more than 1200% more patients since further updates in June 2021. Though momentum has slowed considerably, and not all registered patients are active consumers, as this report makes clear, in this year alone, Patient numbers surged by 23.8%.
Still, with under 100,000 eligible consumers, the regulated medical market represents a tiny fraction of the roughly 4 million annual cannabis consumers Fire Business Strategies estimates live in the state of Texas as of 2024. Clearly there is enormous room for the Texas cannabis market to grow, given the right conditions.
How Many Physicians are in the Texas Compassionate Use Program?
As of August 2024, there are just 810 physicians registered to prescribe cannabis in Texas: or one physician for every 115 patients. This dramatic disparity was one of many challenges identified in the evaluation.
What Other Barriers to Access Are There in Texas?
Apart from the sheer population dynamics between patients, physicians, and operators, the report identified several unique barriers to access in the Texas program. These included limitations on the number of licensed locations, the unique geographic challenges of serving the 2nd largest state by area, the border patrol enforcement zone, and a lack of product diversity.
It is no surprise that self-reported rates of cannabis use are significantly lower across all metrics in Texas than the nation writ large. Still, as the nation’s 2nd most populous state with some of the most significant barriers to legal access in traditional state-regulated markets, data and projections developed by Fire Business Strategies indicate that Texas has, by far, the most robust market for hemp products and black-market cannabis products of any state in the nation.
The Future of Cannabis in Texas
Roughly 1 million people smoke cannabis daily in Texas, and roughly 2 million people consume cannabis monthly or more. These consumers are spread throughout every region, from the valley to the panhandle, from Houston to El Paso. Though the report identifies a limited number of operators as a risk to program continuity, frankly, the political dynamics in Texas make it likely Texas will remain a limited license regime indefinitely. As the program continues to open up, there is tremendous opportunity for well capitalized operators uniquely poised to overcome and capitalize on the state’s unique market dynamics. For these operators, the future is bright. For Texans, that remains to be seen. PS: We’re about to release some exciting new data driven reports in Texas. Stay tuned!
