The Senate Committee on Tuesday adopted amendments to the pending legislation that would legalize retail marijuana sales in Virginia. Supporters are now scrambling to get their bill passed. The Senate’s changes have moved the House-passed bill away from the compromise that was reached last week. This could ultimately send the issue to the bicameral Conference Committee to iron out the differences.
In order to avoid this, legislators are exploring ways to bring the House bill in line with the Senate version that has been passed.
The House has already paused the Senate’s legal sales measure, Senate Bill 448 from Sen. Aaron Rouse. The bill that the Senate gave its preliminary approval on Monday was scheduled for a final reading on Tuesday. After the Senate’s changes, however, the House passed the bill by for the day on the request of Del. Paul Krizek (D).
In an email sent from the House floor, Krizek, who sponsored the retail marijuana bill HB 698 that was passed by the House, told Marijuana Moment, “I passed it to give us another opportunity to keep it out conference.” If we reach an agreement today, we can amend the bill on the floor tomorrow and the Senate can do the exact same.
The HB698 changes, which were made first in a Senate Finance and Appropriations Subcommittee and later in the full committee, changed both the tax rate proposed on cannabis sales and where licensing fees should be spent. The committee raised the 9 percent tax rate to 17 percent, reflecting the rate of Rouse’s Senate bill before the compromise. They also decreased the licensing fee share that would be going to an equity-focused program for microbusinesses. Instead of receiving 100% of licensing fees, this program would receive 75%, and the remaining 25% would go to the Cannabis Control Authority which would regulate the industry.
Rouse, who is the sponsor of SB 448, has not yet publicly commented on the changes made to Krizek’s bill. He didn’t appear to be at the Senate meeting on Tuesday morning and his office did no respond to Marijuana Moment’s email.
In an email sent by Rouse’s Office on Monday before the changes were made, the Senator said that he was proud to have reached a compromise earlier.
He said, “We believe this bill is the best way to regulate Virginia’s illicit market, generate revenue, create jobs, and address some public health issues that are arising from our unregulated market.” “We will work with stakeholders, colleagues in the General Assembly, and the Administration to ensure final passage.”
Some supporters say they are open to new changes. However, they hope that lawmakers will quickly resolve the matter so that a final proposal can be sent to the governor.
Chelsea Higgs Wise is the executive director of Marijuana Justice. She stated that “our position is that Virginia should have a competitive, healthy market so that it doesn’t lose customers to Maryland due to better prices and convenience.” “We support a compromise, such as a gradual increase in taxes. But we hope that discussions will lead to a law both chambers agree on and can send to the Governor.”
Jason Blanchette of the Virginia Cannabis Association called the 17.125 per cent tax “too much.”
He told Marijuana Moment: “Fingers Crossed… Who’d have thought this bill would be derailed by chambers disagreeing on taxes?”
JM Pedini is the development director at the NORML advocacy group and the executive director of its Virginia chapter. He said that they prefer the House-approved lower rate.
Pedini stated that the compromise tax rate agreed to previously of nine percent was a smarter approach. “This ensures that high prices do not dissuade customers from switching to the legal market.”
The two bills are largely unchanged despite the recent compromise.
This is what the compromise bill will do if it becomes law:
- Retail sales will not start until May 1, 2025, which is later than what the proponents had said was likely to be a start date of March in the revised legislation and even later than the January 1, 2019 date that the House and Senate separately adopted earlier in this session.
- Adults will be allowed to buy up to 2.5 ounces in one transaction or an equivalent amount of cannabis products, as determined by the regulators.
- Retail sales of cannabis products would be subject to a state tax of 4.5 %. Local governments could also impose an additional tax up to 4.5 %. The rate of HB 698 has been adjusted by senators to 17.125 percent. )
- Virginia Cannabis Control Authority will oversee the licensing and regulation for this new industry. The board of directors of the Virginia Cannabis Control Authority would be able to regulate possession, sale and distribution of marijuana, as well as testing.
- Local governments can ban marijuana establishments but only after voters approve an opt out referendum.
- The locations of marijuana retailers cannot be located within 1,000 feet of each other.
- Cultivators will be regulated based on the amount of space they dedicate to marijuana cultivation (also known as canopy size) rather than how many plants they actually grow.
- Indoor and outdoor marijuana growing would be permitted, but only those in the lower tiers – with smaller canopy sizes – could grow plants outdoors. The larger growers will need to cultivate their plants indoors. Indoor cultivation would include secure greenhouses.
- Only face-to-face, direct transactions will be allowed. The bill would ban the use of any other means, including vending machines and drive-through windows. It also prohibits internet-based platforms, delivery services, and online sales platforms.
- If medical marijuana providers already licensed for adult-use enter the market, they can apply to open five additional retail outlets. These establishments must be located in their current licensed facilities.
- The maximum serving size would be 10 milligrams of THC. This means that no more than 100mg THC can be contained in a package.
- A person cannot hold or be granted more than five licenses in total, excluding transporter’s licenses.
- Those who have been convicted of felonies, or crimes that involve moral turpitude, within the last seven years, are ineligible for licensing. The same goes for employees of police and sheriff departments, if they are responsible for enforcing the penal laws, traffic laws, or motor vehicle law of the Commonwealth.
- The equity-focused program will grant licenses for entities that are at least two thirds owned and controlled by the eligible applicants. This includes people with previous cannabis misdemeanors and their family members, veterans, people who have lived in “historically economically challenged communities” at least three out of the last five years, people who attended school in these areas, and people who received federal Pell grants or attended a university or college where at least 30% of students qualify for Pell grants.
- A historically economically disadvantaged area is one where marijuana possession offences have been at or above the state average from 2009 to 2019.
- Adults can also share up 2.5 ounces of marijuana with other adults, without remuneration. However, gray-market “gifting”, of marijuana in conjunction with another transaction is punishable as Class 2 misdemeanors and Class 1 misdemeanors for second and subsequent offenses.
- Other criminal penalties will be introduced. Selling or giving marijuana, or marijuana paraphernalia, to anyone under 21 would, for example, be punishable with up to one year in prison and a maximum fine of $2,500, just as selling cannabis to someone who is reasonably believed to have been intoxicated would be. Advertising the sale of paraphernalia containing marijuana to those under 21 is also a Class 1 Misdemeanor.
- A Class 1 misdemeanor would be committed if you knew that someone under the age of 21 was obtaining marijuana for your benefit.
- Under 21s who use or possess marijuana or try to get it would face a civil fine of up to $25, and be ordered to enroll in a treatment program for substance abuse disorders.
- Illegal production or cultivation of marijuana (excluding legal homegrown) would be a Class 6-felony punishable by up five years in prison and $2,500 in fine.
- Homegrown marijuana could be processed into edibles. However, the use of butane or other volatile solvents is punishable as Class 1 misdemeanor.
A separate Senate committee as well as a House both advanced the compromise legislation late last week.
Even if a bill for legalization is passed by the legislature this session, it still has to be approved by Gov. Glenn Youngkin, a Republican who has mixed messages on legalization. The governor hasn’t explicitly stated that he will veto a bill legalizing retail marijuana sales, but he did indicate last month that he does not have “anyinterest” in doing so under Democrat-led plans.
Youngkin, when he first was elected, said that he “was not against” categorically commercial sales.
Virginia has already made it legal for adults to use, possess and grow cannabis in limited quantities. This is the result of a Democrat proposal that was approved by legislators in 2021. After Republicans gained control of both the House of Representatives and the Governor’s Office later that same year, they blocked the necessary reenactment for retail sales. Since then, illegal stores have opened to meet the demand of consumers.
After the last election, Democrats gained control of both chambers in the legislature.
A sales bill did advance through the Democratic-controlled Senate last session, but it stalled in committee in the House, though at the time the chamber had a GOP majority.
Virginia lawmakers, however, passed earlier this week a bill that would protect workers in the public sector, such as teachers and government officials, from being fired due to their use of medical marijuana. The proposal was sent to Youngkin.
Congresswoman Tells DEA to ‘Reject any Argument’ that Marijuana Reclassification Would Violate International Treaties
Photo by Philip Steffan.
The article New amendments to Virginia Marijuana Sales Bill risk upsetting earlier Compromise between House and Senate first appeared on Marijuana Moment.
