The Republican Governor says he is not personally interested in the issue this year, as Virginia Democrstic legislators renew their push to allow marijuana sales.
Governor’s remarks are not encouraging for advocates who hope that commercial legalization will pass through both chambers, now controlled by Democrats. Glenn Youngkin, a Republican, has indicated that the plan may not become law even if the House of Delegates or Senate approves it.
Youngkin was asked Wednesday about the prospects of cannabis reform after his State of the Commonwealth Address.
He told journalists that he had no interest in pushing forward marijuana legislation.
The governor stated that cannabis is not something he has any interest in.
The Governor is sending a message to cannabis reformers as the session of 2024 begins. He made the short comment the same day , a bill legalizing cannabis sales in the House was introduced. The Senate counterpart is expected to be presented shortly.
As a result of a Democrat led proposal that was approved by legislators in 2021, the use, possession and limited cultivation of cannabis for adults in Virginia is now legal. After Republicans won control of both the state House of Representatives and the governor’s office during the 2021 elections they blocked the reenactment required of a regulatory structure for retail sales. The unlicensed market grew in the interim.
Some cannabis advocates are hopeful that the state will enact cannabis sale provisions this year. However, the path to success requires strong consensus within the legislature.
Youngkin’s lack of interest in marijuana reform shouldn’t come as a shock. The fact that he said he would not try to overturn his Democratic predecessor’s noncommercial legalization act of 2021 was welcomed by advocates.
Youngkin, when he won the election, said that he “was not against” commercial sales. He acknowledged that there were some Democratic “non starters” like provisions requiring labor union requirements for marijuana business owners. However, he said he was generally in favor of a bill.
This expectation was quickly dampened at the start of the new calendar year.
Last session, a cannabis sales bill did advance through the Democratic-controlled Senate, but it stalled out in committee in the House, which at the time had a GOP majority.
The newly submitted commercial legalization bill would reinstate the earlier sales provisions that were blocked by Republicans, while updating the planned regulatory scheme.
Existing medical marijuana businesses in the state would be able to begin adult-use operations on July 1 of this year, while some other businesses–including microbusinesses and a small number of hemp companies–could begin operation on January 1, 2025. The issuance of licenses for all types would not be widespread until July 1, 2020.
The legislation also creates a new microbusiness license program that replaces the previous equity licensing provisions. The microbusiness licensing program will offer small business licences to only those who are eligible, such as veterans and people from the state whose areas have historically been impacted by marijuana enforcement. It will also provide technical assistance to qualified applicants.
The state would tax adult-use products at six percent, and local governments could add an additional six percent tax. Cannabis businesses would be prohibited from cultivating cannabis outdoors, and instead required to grow indoors. The proposal would also require that cannabis businesses grow their plants indoors, instead of outdoors.
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Del. Charniele Hering (D) would, on the other hand, make some changes to criminal punishments around marijuana. She would create new crimes and ease others. HB 773 also allows people convicted of marijuana crimes to request a resentencing. If passed, these provisions would go into effect on July 1, 2025. The existing state cannabis possession law had a separate process for expungements.
Days after the GOP-controlled House rejected the prior cannabis sales proposal, it also killed a bill that would have let medical cannabis businesses made certain state-level tax deductions. Republicans also scuttled separate legislation to create a psilocybin advisory board and reschedule the psychedelic.
Meanwhile in the state, several hemp businesses were recently hit with five-figure fines as part of an effort to crack down on hemp cannabinoid products.
Two companies and a private citizen have also sued over the newly tightened rules for hemp products, which set the maximum amount of THC in hemp products at 0.3 percent concentration and 2 milligrams per package. The threshold made illegal hundreds of products already on store shelves. But in October, a judge denied their claim.
Senate President Pro Tempore Louis Lucas (D), for her part, quipped last month that her support for a plan to bring two professional sports teams to Alexandria might be contingent on getting a marijuana sales bill enacted into law.
Last year, Lucas was flagged in a media investigation around CBD products, as the co-owner of a cannabis shop in Portsmouth. Lab testing revealed the shop stocked mislabeled products, some of which contained illegal levels of THC. The problem is common among hemp-derived CBD products, which in most states remain unregulated.
Here are changes that would be made in Virginia under the new legal sales legislation:
- Existing medical marijuana businesses could begin adult-use operations on July 1, 2024, while some other businesses–including microbusinesses and a small number of hemp companies–could apply to begin operation as of January 1, 2025. Broader licensing wouldn’t happen until July 1, 2025.
- Sales of adult-use marijuana products would be taxed at 6 percent at the state level, with local governments able to impose another 6 percent tax. If a town imposes a tax, that would supersede any tax imposed by the surrounding county. Medical marijuana, meanwhile, would be taxed through a separate 12-percent state excise tax.
- The Virginia Cannabis Control Authority’s board of directors would create regulations and control the possession, sale, transportation and delivery of marijuana products. The board would also be in charge of licensing, packaging and labeling, lab testing, security requirements and sanitary standards, as well as some educational efforts around preventing marijuana-related harms.
- The board could set a maximum THC level on marijuana and cannabis products, though edibles couldn’t exceed 10 milligrams per serving or 100 mg per package.
- Licensees could be granted or have an interest in multiple license types, including cultivation, manufacturing, wholesale and retail, but regulations “shall be drawn narrowly to limit vertical integration to small businesses and ensure that all licensees have an equal and meaningful opportunity to participate in the market,” the bill says. No member of the board could have a financial interest in any licensee or applicant.
- Local governments could opt out of allowing all marijuana establishments, but only with the approval of local voters. Towns within a county could allow the businesses even if the county it’s in prohibits them.
- As for medical marijuana, the board would be required to align existing regulations with any new requirements that “establish health, safety, and security requirements for pharmaceutical processors and cannabis dispensing facilities.”
- The board would also create Cannabis Micro Business Liaison, who would lead a microbusiness support team designed to assist eligible microbusiness applicants through business accelerator plans, conduct an analysis of potential barriers to entry to the legal market, spread awareness of business opportunities in historically economically disadvantaged communities, provide technical assistance and conduct outreach.
- Microbusinesses would be created as a license category reflecting some social equity considerations, with eligibility open to businesses owned at least two-thirds by qualifying individuals. Those include military veterans, people who resided for at least three of the past five years in historically economically disadvantaged communities, people who attended at least five years of public elementary or secondary school in such areas or people who received federal Pell grants or attended a school where at least 30 percent of students are eligible for Pell grants.
- “Historically economically disadvantaged communities” would be defined as either as jurisdictions in which “offenses for marijuana possession were committed at a rate in excess of 150 percent of the statewide average for marijuana possession offenses during the previous 10 years” or federally defined historically underutilized business zones (HUBZones).
- Microbusinesses could enter into cooperative agreements with other microbusinesses as well as lease space and equipment “and cultivate, manufacture, and sell” cannabis products on the premises of another licensee.
- Microbusinesses could not manufacture more than 1,000 pounds of marijuana products per year or sell at wholesale more than $500,000 products annually. They would also be limited to no more than 10,000 square feet of canopy space.
- Retailers would need to be no more than 1,500 feet in area, though medical processors or facilities would be grandfathered in so long as they were permitted prior to July 1, 2024 and the retail portion of their facilities don’t expand after that date.
- Cultivation facilities would be limited to 150,000 square feet of canopy, with similar grandfathered-in exemptions for existing medical facilities, which are limited to 200,000 square feet.
- Maximum purchase limits, in terms of purchasable amounts over a given period of time, would be set by regulators, and the bill would require creation of “a retail sales monitoring program to ensure compliance” regarding sales to a single purchaser.
- No cannabis retailer would be allowed to be located within a quarter mile of another marijuana store. Regulators would also be required to ensure that licensees are in compliance with other applicable zoning and land use restrictions.
- Labels on cannabis products would need to be “complete, accurate, easily discernable [sic], and uniform among different products and brands,” and would also need to be accessible through licensees’ websites. Among other details, labels would also need to include all active and inactive ingredients, the total percentage and milligrams of THC and CBD, serving size, usage instructions as well as child and safety warnings “in a conspicuous font.”
- Laboratory testing would need to analyze a sample from each batch of cannabis, with thresholds for failure set in accordance with other states’ standards. Processed products would need to be tested after manufacture of the product is complete. “In the case of retail marijuana,” the bill says, regulators could limit testing to CBD, THC, terpenes, pesticide residue, heavy metals, mycotoxins, moisture and microbial contaminants.
- Regulators would create rules around routine inspections of all cannabis establishments, which under the bill would need to occur at least annually. Rules would also need to be made around minimum equipment and resource requirements, safe and secure dispensing, wholesale distribution and transfer to retail establishments and sale of devices, among other details.
- Rules on the number of licenses any person could be granted would need to both “ensure that all licensees have an equal and meaningful opportunity to participate in the market” and forbid people who hold multiple categories of business licenses from transferring a license to any other person who owns more than one license type.
- Regulators would need to craft a process allowing “certain licensees” to acquire hemp extracts “grown and processed in the Commonwealth in compliance with state and federal law” as well as a process allowing cannabis licensees “to formulate such extracts into retail marijuana products.”
- Providing marijuana or marijuana paraphernalia to individuals who are under 21 would be a Class 1 misdemeanor, which carries penalties of up to a year in jail and a $2,500 fine. Advertising marijuana to minors in any type of publication would also be a Class 1 misdemeanor. Failing to check ID prior to selling cannabis to a minor, meanwhile, would be a Class 3 misdemeanor, carrying up to a $500 fine.
- Minors who attempt to use false documentation to buy marijuana would also be subject to a Class 1 misdemeanor.
- Providing marijuana to an intoxicated person would also be a Class 1 misdemeanor, as would buying marijuana on behalf of an intoxicated person.
- Regulations would need to be “commercially reasonable” and consistent with “standards in states with regulated cannabis markets.”
- Banks and credit unions that work with cannabis businesses would not be held liable under state law for working with the legal industry, though nothing would require financial institutions to work with marijuana clients.
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Photo courtesy of Philip Steffan.
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