The Virginia House of Delegates approved identical versions of the legislation on Wednesday to legalize retail marijuana sales, which puts the reform just one step away from being signed by the Governor. These actions come after amendments threatened to upset the bicameral deal on cannabis.
The measure will then be sent to the Governor after either chamber signs off on it, which is expected to occur on Thursday. Glenn Youngkin (R). The governor has said in the past that he is not interested in moving forward with Democrat-led initiatives.
Democrats spent the last few weeks trying to reach a consensus and a compromise after introducing competing legislation–HB 698 vs SB 448 at the start of the session. This compromise was reached after a flurry of amendments on various committees and in the chamber.
“The floor substitution of this Senate Bill is the result of many hours of work”, Del. Paul Krizek, a Democrat, spoke about the measure in the House on Tuesday. He thanked Sen. Aaron Rouse’s (D), the sponsor of the legislation, “for working with [me] so that we didn’t have go into conference.”
Krizek added, “We needed to iron out these last few little bits.” Krizek is the primary sponsor of the House Bill.
Although the earlier versions of the measure shared many similarities, there were key differences, such as the date when retail stores would be opened, the rate at the which sales would be taxed and whether or not cultivators could grow marijuana outdoors.
The final issue before the floor vote on Wednesday was taxes.
In a compromise announced last week, both bill were amended so that marijuana purchases would be taxed at 9 percent. This tax is composed of a state tax of 4.5 percent and a local tax up to 4.5 percentage points. A Senate committee, however, departed from this compromise and raised the proposed tax rate for HB 698 by just over 17 per cent.
The floor substitutes that were adopted by both chambers on Wednesday restored harmony to these provisions. Both bills now include a tax of 11,625%–8 percent for state, a 2.5 percent optional tax for local government and the 1,125 percent of the state sales tax which funds schools.
The legislation was passed by both chambers with narrow margins, and along partisan lines. The Senate approved HB 698 by a margin of 21-18, while the House voted later on SB 448 with a 51-47 vote.
Rouse made a joke in the Senate that he regretted dropping the nearly 100-page bill to his colleagues.
He said, “Let’s apologize for the thickness” of the floor replacement. “This is what you do when you don’t want to attend a conference.”
Sen. Barbara Favola, (D), told the chamber that, “someone spent many hours on this bill in order to get it to the point where we now have a compromis.”
She said that “parts of this bill have been seen before probably in the last two or three year,” “The difference is that we were able to combine some of the issues requested by medical cannabis growers with those who really wanted to bring marijuana to the general retail market.”
Favola continued, having participated in the negotiations that led to the final compromise. “It is a very, extremely good framework. I think that the governor should take it into consideration.”
This is what the latest versions would do, if they were passed:
- Retail sales can begin as early as May 1, 2025.
- 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 will be subject to a state tax of 11.625%. A tax of 11.625 percent will be applied to any cannabis product sold at retail.
- 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 a referendum opting out.
- 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 dedicated to marijuana cultivation. This is known as canopy size. Indoor and outdoor marijuana growing would be permitted, but only those in the lower tiers – with smaller limits on 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 legislation 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.
- Existing medical marijuana providers who enter the adult market can apply to open five additional retail outlets, which must be located at 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.
- Employees of police and sheriff’s offices who are responsible for enforcing the penal, traffic, or motor vehicle laws in the commonwealth, or those convicted of felonies within the last seven years, would also be ineligible for licensure.
- 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 colleges or universities 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.
- The tax revenue generated by the program will first be used to cover the cost of administering and enforcing California’s cannabis laws. The remaining 60 percent will go towards the Cannabis Equity Reinvestment Fund. 25 percent goes to substance abuse disorder treatment and prevention. 10 percent is allocated for pre-K programs and 5 percent goes toward a public awareness and health campaign.
- 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 be punishable with up to one year in prison and a maximum fine of $2,500. The same would apply to selling cannabis to someone who is reasonably believed to have been intoxicated. 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 attempting to obtain marijuana.
- 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 fine.
- Homegrown marijuana could be processed into edibles. However, the use of butane or other volatile solvents is punishable as Class 1 misdemeanor.
During the Wednesday floor session, Republicans expressed skepticism about the latest proposal.
Sen. David Suetterlein, (R), said that the tax rate included in the bill “concerns” him. He argued that the tax is “lower than what you pay at Kroger for rotisserie prepared chicken”.
He said: “It’s not right to tax working families more on rotisserie poultry than cannabis in the future.”
Del. Todd Gilbert (R), meanwhile, said that “the notion that this will get rid of black market is ridiculous.”
He claimed that “in every state where it’s been legalized, the black market is more robust, bigger and more dominant.”
Gilbert didn’t provide any evidence to support his claim. However, he did mention the difficulties in California where local governments have prohibited licensed stores.
Krizek replied that he would “not be introducing this Bill, and I doubt anyone would vote for it if we did not believe that this could eliminate or put a serious dent in black market.”
Drug dealers do not ID. They don’t check for age. These products have not been lab-tested for potency or purity. The products are not accurately labelled. They don’t have child-proof packaging. “This bill mandates that all of these things be done,” he added. “I’m trying to put this in a regulatory framework to protect our children and the commonwealth.”
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The governor has not explicitly said he’ll veto a retail marijuana bill, but he did signal last month that he a data-google-interstitial=”false” href=”https://www.marijuanamoment.net/gop-virginia Governor does not have any interest in legalizing marijuana sales under new democrat led bills/” rel=”noopener” target=”_blank>doesn’t 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 the Democrat’s 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 required 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, which at the time had a GOP majority.
The state legislature passed earlier this week a bill to protect workers in the public sector, including government officials, teachers and school administrators, from being terminated for using medical marijuana. This measure now goes to the governor.
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