Virginia House Committee passes Marijuana Sales bill that would open some retail stores in January

On Friday, a Virginia House subcommittee approved amended legislation that would permit existing medical marijuana dispensaries to sell cannabis to adults aged 21 or older starting in January of next year. Other retailers will be licensed by 2025.

In order to take advantage of an early opening date, the medical business must “accelerate”, six microbusinesses. Each of these would receive $400,000 of aid under the current legislation. The microbusiness licenses would have to be controlled at least by two thirds by people who met certain social equity criteria. Priority is given to those meeting multiple criteria.

The subcommittee voted to send the bill back to the House General Laws Committee with a favorable report. After adopting the 54-page replacement amendment and accepting subsequent changes made during the hearing, it voted to report the bill to the full Committee.

In its current form, the law could allow dozens of marijuana retailers to open in all parts of the state by January 1, 2025.

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The proposed tax would be 9 percent on products sold.

One of the changes in Krizek’s substitute bill that equity advocates have welcomed is adding past marijuana misdemeanors convictions to a list of criteria for someone to be eligible for a license. Anyone who is the parent, child or sibling of someone who has been convicted will also be eligible.

Some other criteria include living in an historically economically depressed area, attending a public high school or college in that area, or attending a university or college with a large percentage of Pell Grant recipients.

According to an amendment that was agreed upon in principle by the lawmakers of the panel during the hearing, those who met multiple criteria will be given more preference when the regulators award microbusiness licenses.

The bill will eventually make available hundreds of non-accelerated microbusinesses licenses to conduct cannabis-related activities.

The subcommittee meeting held on Friday went relatively well, given the ongoing disagreements between lawmakers and outside activists on how to legalize the sale of marijuana in the commonwealth. Even marijuana opponents agree that it is important to regulate the cannabis market following legalization of cannabis use, home cultivation, and possession in 2021. However, stakeholders want different things from legislation to create a licensed marketplace.

The 2021 Democrat bill included retail provisions, but Republicans later blocked them after gaining control of both the House of Representatives and the Governor’s Office.

After Democrats took control of both chambers of the Virginia legislature in November last year, legislators are now working to reach a consensus on a retail sale proposal, despite Gov. McDonnell’s threat of a possible veto. Glenn Youngkin, a Republican, said this month that he has “no interest” in allowing sales to be legalized under Democrat-led legislation.

Krizek’s revised bill has a defining feature: it allows the state’s five licensed medical cannabis companies to start adult-use sales before new retailers are licensed and open for business. Critics have warned that this approach will give an unfair advantage to big medical marijuana companies from outside Virginia.

At the hearing, a representative of the Virginia Cannabis Association (which represents a number hemp businesses) said that the revised bill still “provides too many benefits for large operators in the medical field, and we will continue to work to ensure that everyone has fair and equal market access.”

Most speakers expressed an interest in working with each other to create legislation that would be approved by the legislature and reach Youngkin’s desk.

The Virginia Cannabis Association spokeswoman said, “We have concerns about this bill in its current form. But we are willing to participate in good faith and welcome the opportunity.”

NORML Virginia’s chapter has endorsed the bill. Chelsea Higgs Wise, of the Marijuana Justice group, also spoke out in support on Friday.

Wise, who has previously criticized the bill for prioritizing medical marijuana businesses – a provision that she strongly opposes in a recent Marijuana Moment Op-Ed – said the revised legislation has made significant strides towards equity by prioritizing those with previous cannabis convictions as well as ensuring a funding source for some operators.

The House panel, at her suggestion, doubled the proposed payments for accelerated microbusinesses in the substitute bill, increasing the amounts from $200,000. As proposed by Krizek, to $400,000. Wise praised the fact that direct payments allow money to move quickly. However, she encouraged lawmakers add transparency and a deadline to the payment process.

The panel initially approved a slightly larger amount, $416,666.67 for each business. However, members reduced Wise’s $2.5 million proposal from each medical marijuana company to $2.4 to make the total easier to divide by six.

She explained her support for the bill by comparing the revised House proposal with a separate legalization measure, from Sen. Aaron Rouse(D), which is and currently making its journey through the Senate.

Wise, a representative of the House, told Marijuana Moment that “this bill includes equity components, such as impacted persons, upfront capital, and a headstart,” where Rouse’s measure is only an even playing field.

Rouse’s SB 448 has already passed two Senate committees. A hearing is scheduled for next week in the Senate Finance and Appropriations Committee.

Rouse’s bill would not allow for medical marijuana companies entering the recreational market earlier than other companies. It also contains benefits to hemp growers who want to switch to marijuana. Some advocates, such as Wise from Marijuana Justice reacted negatively to the bill after it was amended with criminal penalties, one of which included mandatory minimum sentences.

Wise, at a Senate Committee hearing held this week, said that she originally planned to support Rouse’s Bill but changed her mind “because of new crimes and mandatory minimums.”

During a Senate Cannabis Subcommittee Hearing earlier this month lawmakers chose Rouse’s measure over an alternative from Sen. Adam Ebbin, (D), SB 423. The original Krizek bill was the same as Ebbin’s, but now it’s not.

At a Senate hearing held this week, advocates noted separately that hundreds of people remain incarcerated due to marijuana-related crimes. This is either because marijuana enhances penalties for other crimes or because marijuana charges are standalone. Sen. Angelia William Graves’ (D) SB 696 would provide resentencing assistance for these individuals. It would require that those incarcerated on marijuana charges receive automatic resentencing and have their punishments adjusted.

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Some cannabis advocates are hopeful, though, that the state will enact cannabis sale provisions this year, following Democrats’ wins in November last year to win control of both chambers. This path will require building consensus between Democrats in the Virginia legislature, while passing a bill which can withstand a potential veto by Virginia Governor. Glenn Youngkin, R.–or rallying enough legislators in the polarized Virginia state to override a veto.

Youngkin is likely to be skeptical of the bill’s specifics, as he said earlier in the month that he has “no interest” in legalizing the sales under the Democrat led bills.

He told reporters after his State of the Commonwealth Address that he had “no interest” in pushing forward marijuana legislation.

House Majority leader Charniele Herring said that “a regulated marketplace is important for public safety.”

She said, “The Governor should be careful.” “If a bill reaches his desk and he vetoes, I don’t know what the message will be to the public regarding their safety.”

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.

When he first became elected, Youngkin stated that he “was not against” commercial sales. He said that certain Democratic “non starters” were provisions that set labor union requirements for marijuana business–and that he wanted address concerns from the law enforcement. But he indicated that there was generally a bill that he believed he could support.

This expectation was tempered at the start of the year.

Last session, a cannabis sales bill did advance through the Democratic-controlled Senate, but it stalled in committee in the House, which at the time had a GOP majority.