As Texas enters 2026, a wide range of policy decisions, court cases, and administrative changes are poised to shape the state’s political, economic, and social landscape. From shifting regulations on hemp products to major legal battles over education, public health, and prison conditions, the year ahead will test how state agencies, lawmakers, courts, and local governments respond to unresolved issues that gained momentum in recent years. Several of these developments also carry national implications, given Texas’ size, economy, and influence.
Below is a detailed look at some of the most significant Texas stories expected to unfold in 2026.
Hemp Regulation and Federal Uncertainty
After years of operating in a regulatory gray area, the consumable hemp industry in Texas is facing major changes. Hemp-derived products such as smokable flower, gummies, beverages, and tinctures have been widely sold across the state for more than five years, often with limited oversight. That period saw rapid industry growth alongside increasing concern from lawmakers, law enforcement, and public health officials.
In early 2026, two state agencies are expected to finalize long-term rules governing the sale of consumable hemp. The Texas Alcoholic Beverage Commission plans to adopt its permanent rules on Jan. 20, while the Department of State Health Services is working toward finalizing emergency rules within the first few months of the year. These actions follow a 2025 legislative session in which lawmakers attempted, but failed, to pass a full ban on consumable hemp. After vetoing that measure, Gov. Greg Abbott directed the agencies to impose tighter restrictions, including limiting sales to people age 21 and older.
At the same time, the industry faces a looming federal threat. A provision included in a congressional bill that reopened the federal government in November is set to ban the sale of consumable hemp nationwide beginning in November 2026. That provision has already sparked opposition from hemp advocates and bipartisan concern among some lawmakers, who say they plan to revisit the issue before it takes effect. Whether Congress ultimately repeals or delays the ban will significantly affect Texas businesses that have invested heavily in hemp production and retail.
High-Stakes Trade Talks Under USMCA
Texas’ economy is deeply intertwined with international trade, particularly with Mexico and Canada. In July 2026, the United States-Mexico-Canada Agreement will undergo its first mandatory review since it replaced NAFTA. The agreement governs trade among the three countries and has largely shielded Texas from the worst effects of President Donald Trump’s broader trade war by exempting most cross-border trade from tariffs.
Mexico and Canada are Texas’ two largest trading partners. In 2024 alone, Texas-Mexico trade totaled $281 billion, while trade with Canada reached $76.1 billion. Because of those ties, any disruption to the agreement could have major consequences for industries ranging from energy and agriculture to manufacturing and logistics.
Formal discussions for the review are expected to begin in mid-January and continue through much of the first half of the year. While the review was designed as a routine check-in, it is widely expected to become a contentious negotiation. The Trump administration is likely to push for concessions related not only to trade, but also to issues such as drug trafficking and migration.
If all three countries agree to renew the deal, it will remain in place for another 16 years. If renewal is delayed or denied, the agreement could enter a period of annual reviews, or one or more countries could withdraw altogether, fundamentally altering North American trade policy.
Oversight and Legal Battles in Higher Education
Texas public universities will face increased scrutiny in 2026, beginning with the launch of a new statewide Office of the Ombudsman. The office is expected to start accepting complaints related to curriculum decisions, faculty hiring, and disciplinary actions. It will have the authority to investigate campuses and recommend funding penalties.
Gov. Abbott appointed Brandon Simmons, the former chair of the Texas Southern University Board of Regents, to lead the office. His appointment comes as TSU itself remains under investigation following findings of poor bookkeeping and financial mismanagement.
University governing boards are also expected to receive updates on curriculum reviews initiated in fall 2025. New systemwide rules at Texas A&M and Texas Tech could lead to revisions or cancellations of courses that address race, sex, and gender, particularly in the spring semester.
Legislative attention will continue as well. House and Senate Select Committees on Civil Discourse and Freedom of Speech in Higher Education are expected to hold public hearings. These committees were formed after controversial campus reactions to the killing of conservative activist Charlie Kirk. Lawmakers are examining how universities are enforcing new state laws on protests and speech, including Senate Bill 2972, parts of which are currently blocked by a lawsuit.
Court decisions could further shape university policies. In January, the Fifth Circuit Court of Appeals is scheduled to rehear a case challenging West Texas A&M University’s ban on drag shows. The outcome could influence similar restrictions across the state, including a separate challenge to a Texas A&M Systemwide ban.
Launch of the School Voucher Program
Texas’ long-debated school voucher program will begin moving from policy to practice in early 2026. Applications for families will open Feb. 4 and close March 17, ahead of the program’s official launch in the 2026–27 school year.
Under the program, most participating private school students will receive $10,474 per year, while families who homeschool will receive $2,000. The funds will be distributed through education savings accounts beginning July 1, allowing families to pay tuition and make approved educational purchases through a state-managed digital platform.
The comptroller’s office, which is overseeing the program, expects to notify families of awards in early April. Applications for private schools and vendors opened in December and will be accepted on a rolling basis. As implementation begins, lawmakers, educators, and parents will closely watch participation levels, oversight mechanisms, and the program’s impact on public school funding.
Ten Commandments Law Heads to Appeals Court
One of the most closely watched church-state cases in the country will advance in January when the Fifth U.S. Circuit Court of Appeals hears arguments over a Texas law requiring public schools to display the Ten Commandments in every classroom. The case will be heard alongside a similar challenge from Louisiana, the first state to enact such a requirement.
The appeals hearing comes amid a growing number of legal challenges. Two federal judges have already blocked a total of 25 Texas school districts from complying with the law, ruling the requirement unconstitutional. A separate class action lawsuit seeks to block all districts statewide from displaying the posters.
Meanwhile, Texas Attorney General Ken Paxton has sued several districts, including Round Rock, Leander, and Galveston, for allegedly failing to comply with the law while litigation continues.
The disputes center on the First Amendment’s protections of religious freedom and the historical role of religion in American public life. The case could ultimately reach the U.S. Supreme Court, where supporters of the law hope to overturn a 1980 decision that barred Ten Commandments displays in classrooms.
School Accountability and State Takeovers
Texas is expanding its use of state intervention in public education. In 2026, Fort Worth, Beaumont, Connally, and Lake Worth school districts will all have their locally elected school boards replaced by state-appointed boards of managers. The takeovers stem from chronic academic underperformance, with state law allowing intervention after five consecutive years of failing grades at a single campus.
A fifth district, Wichita Falls, has also met the threshold for takeover, though the Texas Education Agency has not yet announced its plans there.
Legal challenges to the accountability system largely concluded in 2025, clearing the way for the release of three years of school grades. Those grades triggered new penalties and interventions.
At the same time, Texas is overhauling its testing system. Lawmakers replaced the STAAR exam in 2025, and the TEA is developing three shorter assessments to be given throughout the school year. The new tests are scheduled to launch in the 2026–27 school year.
Flood Warning Systems After Deadly Disasters
Following devastating July floods in Kerr County that killed more than 100 people, Texas lawmakers approved $50 million to help communities accelerate flood preparedness projects, particularly in the flood-prone Hill Country.
Kerr County plans to build a flood warning system that would include sirens, rain gauges, flashing signs, and a public tracking website. While the website is already underway, funding remains a challenge for the full system.
The Texas Water Development Board has fast-tracked smaller grants, but larger funding requests still face lengthy approval processes. Experts warn that funding alone does not guarantee construction and that many past flood projects have stalled due to insufficient resources. Whether systems can be installed before the next major rainy season remains uncertain.
Dementia Research Fund Lawsuit
A lawsuit filed by three voters is blocking the implementation of Texas’ $3 billion Dementia Prevention and Research Institute of Texas, approved by voters in November. The plaintiffs argue that voting machines used in the election were faulty.
State leaders and legal experts say such lawsuits often aim to halt large spending initiatives rather than address election mechanics. Similar challenges in the past have delayed constitutional amendments for years, though some were eventually dismissed on procedural grounds.
If implemented, the dementia fund would provide $3 billion initially, with up to $300 million annually thereafter, making it one of the largest research investments in state history.
Together, these developments highlight a year of significant legal, political, and policy crossroads for Texas, with outcomes that may reverberate well beyond state lines.
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