The landscape of medical cannabis in the Lone Star State is undergoing its biggest transformation since the inception of the Texas Compassionate Use Program (TCUP) in 2015. On December 1, 2025, the Texas Department of Public Safety (DPS) announced the conditional selection of nine new businesses to operate as dispensing organizations. This move marks the beginning of a major expansion authorized by House Bill 46, which aims to expand patient access and modernize the state’s regulatory framework.
For years, Texas operated with a highly restrictive market served by only three licensed providers. With the patient registry growing rapidly and legislative pressure mounting to improve accessibility, the state has finally opened its doors to new competition. However, the list of selected applicants reveals a distinct trend: the arrival of large Multi-State Operators (MSOs) into the Texas market.
This development brings both promise and controversy. While well-funded MSOs can provide infrastructure and product consistency, local stakeholders have raised concerns about the exclusion of homegrown Texas businesses.
Phase I Selection: Who Made the List?
The DPS announcement identified nine organizations that have been conditionally awarded TCUP licenses. These selections are part of Phase I of the expansion process, with three additional licenses scheduled to be awarded by April 1, 2026. The selection process prioritized geographic distribution across the state’s public health regions to address access deserts in areas like the Panhandle and West Texas.
The nine conditionally selected businesses are:
- Verano Texas, LLC: Slated for Public Health Region 9/10 (West Texas/El Paso area).
- Trulieve TX, Inc: Assigned to Public Health Region 1 (Texas Panhandle).
- Texas Patient Access, LLC: Operating in Public Health Region 3 (North Texas).
- Lonestar Compassionate Care Group, LLC: Also assigned to Public Health Region 3 (North Texas).
- Lone Star Bioscience, Inc: Selected for Public Health Region 8 (South Central Texas/San Antonio area).
- PC TX OPCO LLC (dba PharmaCann): Assigned to Public Health Region 6 (South East Texas/Houston area).
- Texa OP (dba TexaRx): Operating in Public Health Region 11 (South Texas/Harlingen).
- Story of Texas, LLC: Also assigned to Public Health Region 6 (South East Texas/Houston area).
- Dilatso, LLC: Slated for Public Health Region 2 (North Texas).
It is vital to note that these licenses are currently conditional. These organizations cannot immediately begin cultivating, manufacturing, or selling cannabis products. They must first pass due diligence evaluations, which include reviews of financial suitability, litigation history, and disciplinary actions.
The Arrival of Multi-State Operators
A closer look at the selected companies confirms that national cannabis giants have officially secured a foothold in Texas. The presence of recognizable industry names signals a shift from a localized pilot program to a commercially viable medical market.
Trulieve is perhaps the most notable entrant. Already a dominant force in the U.S. cannabis industry, Trulieve operates dispensaries in Arizona, Connecticut, Florida, Georgia, Maryland, Ohio, Pennsylvania, and West Virginia. Their selection for the Texas Panhandle region suggests a strategy to bring large-scale operational expertise to rural areas.
Similarly, Verano and PharmaCann represent other significant MSOs entering the fray. Their inclusion indicates that the Texas application process heavily weighted capital, operational history, and the ability to scale quickly—attributes often associated with established national brands.
Local Industry Reaction
The heavy presence of MSOs has drawn criticism from local entrepreneurs who feel sidelined. Texas has a booming hemp-derived THC market, generating billions annually, yet many of these local operators were not selected for the medical program.
Lauren Bridges, owner of Alchemy TX and a cannabis science graduate, expressed disappointment at the lack of local representation, via the Conco Valley Homepage “I was a little disappointed to see no local Texas companies, like a lot of these hemp businesses have been essentially doing the same thing with a different plant,” Bridges noted.
She highlighted that the hemp industry stepped up to provide variety when the medical program’s selection was too narrow, yet those contributions did not seem to translate into TCUP licensure.
Inside House Bill 46
The issuance of new licenses is only one component of the changes brought by House Bill 46. The legislation fundamentally alters how medical cannabis is regulated and accessed in Texas.
One of the primary drivers for expansion was the need to serve a wider patient base. The bill added several new qualifying conditions to the program. As of late 2025, the list now includes:
- Chronic pain (defined as severe pain lasting more than 90 days).
- Crohn’s disease and other inflammatory bowel diseases.
- Traumatic brain injury (TBI).
- Terminal illnesses and patients in hospice or palliative care.
These additions join previously approved conditions such as epilepsy, PTSD, autism spectrum disorder, and multiple sclerosis. The impact of these changes is already visible in the data. The number of registered patients in the Compassionate Use Registry of Texas (CURT) rose from 105,493 in January 2025 to 127,206 by the end of September 2025.
Operational Improvements
To support this growing patient population, HB 46 introduced operational changes designed to fix logistical bottlenecks.
Satellite Locations: The bill introduces the concept of satellite locations, allowing dispensing organizations to store and distribute products away from their main cultivation sites. This is a critical development for a state as geographically vast as Texas. These locations must maintain strict security protocols, including enclosed, locked storage areas, to prevent diversion.
Overnight Storage: Previously, regulations barring overnight storage at distribution points forced delivery drivers to return inventory to central hubs daily, creating massive inefficiencies. The new rules remove this barrier, facilitating easier distribution to rural areas.
Dosage and Delivery: HB 46 removed the previous caps on THC dosage, giving physicians greater discretion to tailor treatment to patient needs. Furthermore, the legislation officially authorized the use of aerosols and vapors for inhalation, providing patients with faster-acting delivery methods compared to tinctures or gummies. Smoking cannabis remains prohibited under the statute.
Regulatory Hurdles and Future Outlook
While the announcement of nine new businesses is a step forward, the process is far from complete. The “conditional” nature of these licenses means DPS retains the authority to revoke them if the companies fail their final background checks.
The “Use It or Lose It” Clause
Texas is keen to avoid the issue of “paper licenses,” where companies hold permits without actually serving patients. The new rules authorize license revocation if an organization fails to begin dispensing low-THC cannabis within 24 months of license issuance. Grounds for revocation also include failing to fill prescriptions promptly or failing to produce inventory consistent with demand. This ensures that the selected MSOs and other operators must actively contribute to the market rather than sitting on valuable licenses for speculation.
Phase II Approaching
The current expansion is just Phase I. DPS is mandated to issue three additional licenses by April 1, 2026. This second round will be open to applicants who were not selected in Phase I as well as new prospective licensees. This staggered approach allows regulators to assess the initial impact of the new MSOs before finalizing the state’s roster of 15 total dispensing organizations.
