AUSTIN (KXAN)-- Kelly Neves has spent five years building Big Dan's Emporium from a single food truck into a nine-location hemp business across Austin. Now, with just days remaining before Gov. Greg Abbott's Sunday deadline to act on Senate Bill 3, she's preparing to throw away thousands of dollars in inventory and close the doors on her latest venture.
"Sept. 1, a lot of it, unfortunately, will have to go in the trash," Neves said from inside Club 420, the downtown nightclub and hemp dispensary she opened six months ago after a multi-year permitting process. "Whatever's left here, we don't want to hold on to and get in trouble for."
Abbott has until Sunday to veto SB 3 — which would ban all hemp-derived THC products in Texas — or allow it to become law. The legislation, championed by Lt. Gov. Dan Patrick would effectively eliminate an industry that generates $10.2 billion annually and employs 53,000 people statewide, Neves said.
The governor's veto patterns suggest an uncertain outcome for the hemp industry. Abbott has wielded his veto power strategically throughout his tenure, ranging from 20 vetoes in 2021 to a near-record 76 vetoes in 2023 when he used rejections to pressure lawmakers on property tax legislation.
Support for the legislation gained momentum this week when Allen police announced they seized more than 75,000 pounds of consumable THC during search warrants executed at three hemp warehouses in Dallas. Police say the $7 million bust involved products with THC concentrations ranging from 7% to 78%, far above the state's legal threshold of 0.3%.
Allen Police Chief Steve Dye, who advocates for SB 3, said the seizure demonstrates the current regulatory system has failed. "This product can never be regulated. Retailers have already proven many of them to be not trustworthy," Dye said, adding that the ban would simplify enforcement by requiring police to "test for presence, not quantity."
For Neves, the stakes are personal and immediate, Club 420, located at Fifth and Neches streets in Austin's entertainment district, employs 20 people and represents years of investment from her family and outside investors.
"It's probably going to bankrupt us," she said. "We have investors that have invested money into building these businesses, and they're going to see a loss as well."
Neves started Big Dan's Emporium in 2019, two weeks before Austin City Limits Music Festival, initially operating from a food truck on Barton Springs Road. The timing proved fortuitous, giving the business major exposure that fueled rapid expansion across Austin's famers markets.
"Every farmers market wanted us to be part of their thing because we were just very popular," Neves said. "We're organic, we're vegan. It's the things that people at farmers markets were really looking for."
The success led to partnership opportunities with manufacturers and the opening of multiple locations. Club 420 represents the evolution of that business model, combining a full bar with THC-infused beverages made with "high quality, super critical CO2 extracted THC from hemp."
However, SB 3 would criminalize possession of any hemp product containing cannabinoids other than CBD and CBG, making Neves' entire product line illegal overnight. The bill includes felony penalties for manufacturing or selling prohibited products and misdemeanor charges for simple possession.
"This isn't a surprise. They didn't pull a rabbit out of a hat," Neves said. "We expected there to be modifications, but not a complete ban."
The legislation has drawn opposition from hemp advocates who delivered more than 118,000 petition signatures to Abbott's office urging a veto. Supporters argue the products pose safety risks, particularly to children.
For small business owners like Neves, who said she invested 20 months and significant capital to open Club 420, the timing couldn't be worse. The business lease expires at year's end, and without THC sales to supplement bar revenue, she doesn't expect to renew.
"Here we are a successful business that's doing great. We're supporting 20 employees," she said. "Now we're going to lose it all."
The hemp industry in Texas consists largely of small, independent businesses rather than major corporations, making the potential ban particularly devastating for entrepreneurs who built companies around products that have been legal for more than five years.
As Sunday's deadline approaches, Neves joins thousands of other business owners awaiting Abbott's decision on legislation that could transform Texas from a hemp-friendly state into one with some of the nation's strictest cannabis laws.
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