The National Cannabis Violations Texas Cannot Ignore

For the first time, the nation’s biggest cannabis corporations—multi-state operators with headquarters, licenses, and major market share in Illinois and other key states—are lining up for a limited number of medical cannabis licenses here. These are the companies that dominate Chicago’s cannabis economy and reach deep into markets across the country. They are not unknown quantities. Their names appear again and again in court dockets, OSHA files, enforcement notices, ethics decisions, and class-action complaints.

 

If Texas chooses to let them in, it will be importing that history along with them.

 

DPS’s Scoring System: A Framework Without a Process

 

The Texas Department of Public Safety has published what it claims is a scoring rubric for Compassionate Use applicants. In reality, it is a handful of headings—security, financial responsibility, operations, and technical capability—devoid of detail. The document does not explain what constitutes a strong submission in any of those categories. It does not say how points are assigned, what makes a deficiency fatal, or whether out-of-state violations are considered at all.

 

Nowhere does DPS tell Texans whether a history of mislabeling products in Illinois matters. Nowhere does it say whether pesticide violations, unaccounted-for inventory, or OSHA findings from other states affect an applicant’s standing. There is no guidance on how regulators will treat companies accused of gaming potency limits, misclassifying products to evade state caps, or letting contaminated products reach patients.

 

The public is effectively asked to take DPS’s word for it that the agency is doing its job. That might be acceptable if DPS had a track record of transparent, scientifically grounded decision-making in this space. It does not.

 

The Armstrong Labs Warning Texas Has Not Heeded

 

The Armstrong Labs episode remains the clearest example of what happens when DPS makes critical decisions behind closed doors. A lab favored by law enforcement used a testing method that critics, attorneys, and the Texas Forensic Science Commission all said could convert THCA into delta-9 THC during analysis—transforming lawful hemp into apparent contraband. Retailers were raided, products were seized, and businesses collapsed, not because those businesses set out to break the law, but because DPS chose a contractor whose methodology could not withstand scientific scrutiny.

 

The Forensic Science Commission’s involvement underscored how serious the problem was. But DPS never gave Texans a full accounting of how it selected that lab, why it trusted that method, or how it planned to prevent similar failures in the future. It simply closed the door and moved on.

That kind of opacity might be survivable in a small program. It is reckless in a licensing round involving some of the largest and most legally exposed operators in the American cannabis industry.

 

The Illinois MSOs: A Record of Misconduct That Leads the Nation

To understand the risk Texas is facing, it is necessary to start where so much of the American cannabis business is headquartered: Illinois. The state has become a hub for multi-state operators, and the misconduct tied to those operators is now a matter of public record.

 

Cresco Labs, based in Chicago, is at the center of multiple lawsuits in Illinois accusing it of manipulating labels and product classifications to evade THC limits established under state law. In Matthews v. Cresco Labs and related cases, plaintiffs allege that Cresco mislabeled certain vapable oil products and deliberately classified infused products as “concentrates” so they could carry higher THC levels than Illinois law allows.  These cases go to the heart of market integrity: if a medical cannabis company will not tell the truth on its labels, it cannot be trusted to protect patients or comply with dosage limits.

 

Green Thumb Industries, another Chicago-based giant, is facing its own THC-potency class action in Illinois, with plaintiffs alleging that GTI and its subsidiaries misrepresented the strength of their products.  The company has also appeared in enforcement actions beyond Illinois. In New Jersey, regulators fined Green Thumb and Verano for rule violations, including failures around packaging, testing, and record-keeping.  Together, these cases paint a picture of operators that routinely push or cross regulatory lines and then resist accountability when challenged.

 

Verano, also rooted in the Chicago market, shows up repeatedly in litigation and enforcement records. It was a co-defendant in an $860 million lawsuit tied to a failed acquisition, a case that highlighted aggressive, boom-time deal-making and the fallout when stock prices collapsed.  Verano has been fined in New Jersey and has faced scrutiny in other states over compliance and rule adherence.  It has settled complex litigation with another operator, Vireo Growth, after years of dispute, underscoring how much time and money these companies are willing to expend fighting over deals rather than focusing on stable, compliant operations.

 

PharmaCann, whose parent entity is organized as an Illinois LLC based in downtown Chicago, has faced worker-safety enforcement from OSHA and disciplinary action in Maryland. OSHA cited PharmaCann for potential workplace hazards at a greenhouse in New York; the company paid a fine to settle the case.  In Maryland, regulators issued a consent order addressing violations of company code of conduct, including misappropriation and related misconduct.  This is an operator that has struggled not just with regulatory compliance, but with internal culture and control.

 

Ascend Wellness, another major player with a strong Illinois footprint, has found itself simultaneously entangled in litigation and ethics concerns. In Illinois, Ascend has been hit with a class-action lawsuit alleging its vape products misled consumers—part of a broader wave of potency and labeling suits hitting the state’s largest operators.  Separately, the Illinois Office of Executive Inspector General found that a deputy director of the state’s cannabis regulation office accepted employment with Ascend while still serving in his government role, flagging the kind of revolving-door risk that can erode public trust in any licensing regime.  Ascend has also drawn enforcement in Massachusetts, where regulators have named it alongside other national firms in disciplinary actions.

 

These are not marginal actors. Cresco, Green Thumb, Verano, PharmaCann, and Ascend together represent the core of Illinois’s MSO tier. Their violations span mislabeling, misclassification to evade potency caps, worker-safety hazards, rule violations in multiple states, and ethics concerns involving former regulators.

 

They are also exactly the kind of companies now looking toward Texas.

 

Curaleaf and Trulieve: National Patterns of Risk

Outside Illinois, other large MSOs with designs on national expansion—including into Texas—have compiled their own disturbing records.

 

Curaleaf has been accused in Oregon of one of the most notorious mislabeling blunders in the industry: selling products advertised as CBD that in fact contained significant THC. The company settled at least ten lawsuits, paid regulatory fines, and endured a license suspension over the incident, then paid an additional $100,000 to resolve a separate class-action suit.  More recently, a former regional compliance director has alleged in federal court that Illinois regulators flagged “systemic diversion” at Curaleaf’s Litchfield, Illinois facility, citing vast amounts of unaccounted-for inventory.  That combination—dangerously mislabeled products in one state and suspected diversion in another—should alarm any regulator.

 

Trulieve has become a national case study in how worker-safety failures can turn deadly. In Holyoke, Massachusetts, a 27-year-old employee died after an occupational asthma attack triggered by inhaling ground cannabis dust. OSHA cited the company; Trulieve ultimately settled with a reduced fine after the agency withdrew some of its initial citations.  The Massachusetts Cannabis Control Commission later imposed a $350,000 fine for noncompliance connected to that death.  The incident has helped spur new workplace-safety legislation for the cannabis sector in Massachusetts and is widely recognized as the first officially reported occupational asthma death in the U.S. cannabis production industry.

 

This is the caliber of operator lining up at Texas’s door: companies with histories that include worker fatalities, systemic diversion allegations, pesticide penalties, mislabeling scandals, ethics violations, and repeated efforts to stretch or evade state rules.

 

DPS has given no public indication that it views any of this as relevant.

 

How Texas Conservatives Once Understood Good Government

This failure of process would sting less if it did not contradict forty years of Texas conservative doctrine. When I was young—long before I stepped into policy or politics—I absorbed a mantra that shaped Texas Republican identity: government should be run like a business. It was the rallying cry of the era, a promise of efficiency, accountability, transparency, and discipline.

 

Ross Perot built an entire political movement around this ideal. His charts, his data obsession, his blunt insistence that government should be audited, measured, and forced to justify its decisions—these were the qualities Texans admired because they reflected the sensibilities of a state that expected competence.

 

Texas governors echoed the theme whenever an agency faltered. Ann Richards invoked business discipline when restructuring TDCJ and modernizing mental health oversight. George W. Bush reorganized agencies around performance metrics and measurable outcomes. Rick Perry spoke frequently about efficiency reforms in workforce development, procurement, and human services. Greg Abbott has demanded data-driven performance from state agencies and has publicly rebuked those that failed to meet clear operational standards.

 

For decades, Texans were told that government must be transparent, accountable, and grounded in expertise—because those are the principles that guide successful businesses.

 

DPS has abandoned all of them.

 

No business evaluates multi-billion-dollar proposals without publishing evaluation criteria. No business refuses to examine the track record of a potential partner. No business exposes its advisors to suspicion by refusing to define their roles. No business hides its scoring methodology from its own stakeholders. And no business treats the past behavior of applicants as irrelevant to future performance.

 

Ross Perot once said, “If you see a snake, don’t appoint a committee—kill the snake.” DPS is simply refusing to open the box.

 

 

 

An Agency Built to Interdict, Not to Regulate

There is a deeper structural problem. DPS is a law enforcement agency being asked to run a highly technical licensing program for a plant it has spent decades trying to intercept and destroy.

For generations, the mission of Texas DPS has been to stop drug trafficking, enforce criminal statutes, and treat cannabis as contraband. Training, culture, and institutional memory have all reinforced the same bedrock assumption: marijuana is bad, and the people who cultivate, process, or distribute it are on the wrong side of the law. In recent years, federal agencies and some state and local departments have begun to adjust to a world in which cannabis is regulated, taxed, and—in many cases—treated as medicine. DPS has not undergone that transformation. Texas never created a dedicated health or science-oriented cannabis regulator. It simply handed the job to the state’s primary law-enforcement agency and walked away.

 

At the same time, the Legislature that made this decision is populated by talented people whose backgrounds are in law, business, real estate, entertainment, consulting, and advocacy—not in pharmaceutical manufacturing, lab science, agricultural regulation, or medical program design. Expecting them to build a sophisticated, transparent licensing regime without dedicated subject-matter expertise was unrealistic from the outset.

 

Layered on top of this design flaw is the predictable gravitational pull of insider dealing that follows every limited-license cannabis program. Wherever a small number of highly valuable licenses are at stake, politically connected players look for an angle. Texas has already seen early evidence of attempted preferential positioning and overlapping business relationships. None of this is surprising. What is surprising is that DPS and legislative leadership chose to build a system that invites suspicion by shrouding the entire process in secrecy.

 

A law-enforcement agency with a cultural bias against cannabis, operating without true regulatory expertise, following a blueprint written by non-technical policymakers, and administering a closed-door licensing process is not equipped to keep powerful MSOs in check. It is, instead, exactly the kind of environment those companies have learned to exploit.

 

What a Well-Regulated Licensing System Would Look Like

A sound licensing regime in Texas would start by acknowledging reality: the companies applying for licenses have long, complicated histories, and those histories matter. A competent regulator would publish detailed scoring criteria in advance, explain how out-of-state violations affect eligibility, and specify how issues like mislabeling, potency fraud, OSHA findings, and diversion allegations will be weighed.

 

It would separate advisors from decision-makers and make both roles visible to the public. It would release redacted versions of applications, publish scores and the reasoning behind them, and provide written explanations to both successful and unsuccessful applicants. It would subject MSOs with heavy violation histories to enhanced oversight once licensed, with regular audits, surprise inspections, and public reporting of compliance events. And it would treat patients, caregivers, and Texas small businesses as stakeholders rather than bystanders.

 

That is what a serious state does when it confronts national operators with this kind of record.

 

Texas Cannot Pretend Not to Know Who These Companies Are

The time when Texas could plausibly claim ignorance about MSO misconduct is over. Illinois has documented mislabeling and misclassification schemes tied to major operators.  Oregon, Massachusetts, New Jersey, Maryland, New York, and other states have issued fines, consent orders, and disciplinary actions that describe in detail how these companies have behaved when they thought no one was looking too closely.

 

Texas now knows—or should know—that many of the MSOs seeking licenses here have treated rules in other states as obstacles to be navigated rather than standards to be honored. DPS and the Legislature cannot say they believe in running government “like a business” while ignoring the most basic business principle of all: you evaluate a partner by its track record.

 

If Texas chooses to hand the keys of its medical cannabis program to companies with this history, without transparent standards, without serious scrutiny, and under the supervision of a law-enforcement agency unprepared for the job, the outcome is not hard to predict. It will look like Illinois, Massachusetts, Oregon, New Jersey, and every other state that thought it could keep these operators in line without doing the hard work of real regulation.

The harm will not fall on Cresco, Green Thumb, Verano, PharmaCann, Ascend, Curaleaf, or Trulieve. They have already built systems to absorb fines, settle lawsuits, and move on. The harm will fall on Texas patients, Texas workers, and Texas businesses who were told they could trust a program overseen by DPS.

Companies do not reinvent themselves at the Texas border. Their past follows them. The only question now is whether DPS and the Legislature will pretend not to see it—or finally take it seriously enough to protect the people they serve.