Texan Leader Wants Hemp Expansion Amid License Shakedown Scandal

Texas Agriculture Commissioner Sid Miller is calling for an expansion of the state’s current cannabis laws as a license shakedown scandal swirls within his orbit.

Last week, Miller posted an editorial on the Texas Department of Agriculture website calling for a loosening of the state’s cannabis laws. Texas has only legalized medical marijuana for a very restrictive list of conditions, but the state is also a big proponent of industrial hemp.

While Miller is calling for “expanded access to the compassionate use of cannabis products in Texas,” a political consultant and former top aide for Miller, Todd Smith, is fighting accusations – among many others – that he profited off a hemp licensing scheme.

Hemp Scandal

Smith was first arrested by state authorities in May 2021, on charges of third-degree felony theft, alleging that he leveraged his relationship with Miller and the Texas Department of Agriculture (TDA) to solicit money and campaign contributions for licenses as the state was figuring out how to regulate hemp cultivation.

In a 9-page affidavit, investigators detailed how Smith used a middle man to recruit prospective clients willing to dole out thousands of dollars in exchange for a “guarantee” that they would be first in line for the state-issued licenses.

The first known instance according to the document occurred at a social event on Aug. 18, 2019, shortly after Texas Gov. Greg Abbot signed into law House Bill 1325, which legalized hemp production.

Smith’s associate, a Texas man named Keenan Williams, approached Andre Vinson – who was operating in the CBD industry before finding interest in hemp amid state implementation – and told him that he was working directly with senior leadership at the TDA, adding that there would only be 15 exclusive state hemp licenses issued in the entire state.

The going rate for just one license according to Williams at the time? $150,000.

However, there is no such cap on hemp production licenses in Texas. Each license costs $100.

“What Will Be The Cost Of A License?” on Page 5 of TDA’s Hemp FAQ Guide.

The criminal warrant chronicles at least six detailed accounts of cash handoffs and quid pro quos for exclusive access into Texas’ nascent hemp market.

In another instance, Smith gave one prospect-turned-whistleblower a $25,000 invoice to conduct a survey “to help obtain and solidify the Republican votes on hemp issues.”

“Todd Smith created by words and his conduct, a false impression of fact that affected the judgment of others in the transactions to obtain a hemp license and/or conduct a survey that was never attempted,” the affidavit said.

Miller Denials

Green Market Report previously reported that this apparently isn’t Smith’s first rodeo when it comes to influence peddling.

In 2018, the Austin American-Statesman reported that Smith promised a San Antonio businessperson an appointment with the Department of Agriculture in exchange for a $29,000 loan.

Miller and Smith’s relationship has been mutually beneficial. In 2016, Miller gave Smith’s wife a newly created assistant commissioner position, one of the highest-paying roles in the department.

Miller denied knowing anything about the allegations against Smith and Williams – even suggesting that the accusations were political fodder amid an upcoming election season – though the pending criminal case called into question by political opponents the commissioner’s own proximity to the scheme.

“That was Todd, between him and his clients,” Miller told the Texas Tribune.

Texas criminal defense attorneys Sam Bassett and Perry Minton – whom Smith hired following his arrest – said in a statement that he was “paid and performed these very duties for a number of clients interested in obtaining hemp licenses” and that Smith “never guaranteed anyone a particular outcome of any kind.”

“Todd never violated any laws and did not steal anything from anyone,” the lawyers said at the time, adding that their client “looks forward to continuing his cooperation with law enforcement and the district attorney to clear his name.”

Grand Jury Indictment

At the same time, Williams continued to cooperate with authorities following his arrest. By January 2022, a grand jury indicted Smith on felony theft charges – along with Williams – as well as commercial bribery. Miller officially cut ties with Smith the next day.

“Todd Smith and I have mutually agreed to terminate his association with my campaign effective immediately,” Miller told the Texas Tribune.

“My campaign and the (TDA) will cooperate fully with any agency involved in this matter so it can be resolved openly, fairly, and judiciously.”

In the end, the scheme earned $55,000 for Smith. Williams collected $77,500.

Market Size

In 2021, Texas has issued 760 hemp licenses and permitted 3,405 outdoor acres and 10,871,664 greenhouse square feet. Texas is third in the nation for the amount of greenhouse hemp grown.

According to Texas A&M Today, industrial hemp is the target for a plan from Texas A&M University researchers to 3D print new buildings using hempcrete.

The project will be funded by a $3.74 million grant from the U.S. Department of Energy Advanced Research Projects Agency-Energy (ARPA-E) Harnessing Emissions into Structures Taking Inputs from the Atmosphere (HESTIA) program.

While some in Texas are working towards increasing legal hemp and medical marijuana, the conservative state also has those fighting against it. The Jurist wrote in June that the Texas Supreme Court decided to uphold a ban on the production and processing of smokable hemp, saying that it was constitutional under state law.

Adam Jackson

Adam Jackson writes about the cannabis industry for the Green Market Report. He previously covered the Missouri Statehouse for the Columbia Missourian and has written for the Missouri Independent. He most recently covered retail, restaurants and other consumer companies for Bloomberg Business News. You can find him on Twitter at @adam_sjackson and email him at adam.jackson@crain.com.

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