After Virginia Sen. Adam Ebbin’s (D) confidence that a marijuana sale bill would pass the legislature this year and reach the Governor’s desk, lawmakers have now officially filed legislation for it to happen.
Del. Paul Krizek, a Democrat, introduced HB 698 in the House of Delegates, and a similar bill is expected to be filed by Ebbin in the Senate soon. The legislation follows a proposal Ebbin put forward last session that passed the Democratic-controlled Senate but died in committee in the GOP majority House of Delegates.
Virginia has already made it legal for adults to use, possess, and grow cannabis in a limited way. This is the result of a proposal that was approved by legislators in 2021 . 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 that Democrats build consensus in the legislature and that a bill is passed that can avoid the possible veto of Virginia Governor. Glenn Youngkin, R–or rallying enough legislators in the polarized Virginia state to override a possible veto.
Ebbin said to Marijuana Moment that “this is a sensible idea whose time has finally come” and “we now have the majority of legislators who are willing to make it happen.”
The new bill would reinstate the earlier provisions on sales that were blocked by Republicans, while updating the 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 who have been historically impacted by marijuana law enforcement. It will also provide technical assistance to qualified applicants.
The state would tax adult-use products at 6 percent, and local governments could add an additional 6 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.
The revised bill was welcomed by some advocates, who noted that it is more concise and accessible than previous versions, which they believe is crucial for gaining approval from legislators and possibly the governor.
The size, readability, and substance of this bill is a major improvement over previous efforts, said JM. Pedini. He’s the development director at the advocacy group NORML, and the executive director of its Virginia chapter.
Pedini said, “Virginians want the rest of legalization to take place,” and these bills are preventing Democrats and Republicans from delivering just that.
Some cannabis businesses have expressed concern about the bill’s provisions. These include the introduction of new criminal penalties, and the benefits that the bill will give to existing and large businesses.
Chelsea Higgs Wise criticized several elements of the Marijuana Justice bill in comments made to Marijuana Moment.
She said that the bill would erase those who are directly affected. People who have been arrested or convicted for criminal cannabis charges will not be eligible for any benefits. She said that the microbusiness program was trying to incorporate equity into the proposed system. However, there is nothing stopping regulators from only granting licenses to veterans.
She argued that allowing medical marijuana businesses to enter the market too early would further hamper equity efforts, making it more difficult for later arrivals in the market to establish themselves. She noted that a licensing procedure is still being determined and “there’s no guarantee” of when others will be operational.
Together, Wise stated that the changes “amount to a stripping away of the promises made to our communities about creating an equitable marketplace.”
Wise stated, “I am really concerned with how far we have strayed away from our original language, and what we promised the people of the Commonwealth our industry would look, how inclusive, how intentional, it would be.” “That’s the reason we need to stop making these same compromises.”
Marijuana Justice wants to remove the opt-out clause that allows local governments to ban marijuana businesses when voters approve. She said that she used to support this provision, which she had accepted in the past as necessary from a political standpoint.
Wise believes that Youngkin will ultimately veto any bill passed this year by Democrats, no matter how carefully Democrats draft the bill. She repeated a prediction made last year that the bill would be vetoed. “But I think it’s still important that we are transparent with our constituents who voted for a new majority, and what their priorities in cannabis are.”
Ebbin responded: “I am working on passing a bill.” You want me talk about hypotheticals about what would happen if the bill was vetoed when it hasn’t passed yet?
Ebbin, when asked about Youngkin’s position on the bill referred to it as “an unknown.”
“The Governor has not been forthcoming with his views on this subject. We’ll get over that bridge if and when it happens, but this bill does not have a majority strong enough to override a governor’s veto. Not yet. “I’d love to, but we are working on a positive approach to get the Marketplace Bill passed and to the Governor’s desk.”
Del. Charniele Hering (D) would, on the other hand, make some changes to criminal penalties surrounding marijuana, creating new crimes and easing others. The HB 773 also created a petition system to allow marijuana offenders to request 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.
Ebbin’s last-year bill included similar resentencing clauses, but these are not included in his latest proposal. He said that he wasn’t familiar with Herring’s bill.
The new legislation in Virginia that will allow for legal sales
- 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. The licensing of a broader range of products would not happen until July 1, 2020.
- State-level taxes on adult-use marijuana would be 6 percent, and local governments could impose an additional 6 percent. Taxes levied by a municipality would override those levied by surrounding counties. Medicinal marijuana would be subject to a 12-percent excise state tax.
- Board of Directors of the Virginia Cannabis Control Authority would be responsible for creating regulations that regulate possession, sale and transportation of marijuana products. The board will also be responsible for licensing, packaging, labeling, lab tests, security standards and sanitary requirements, as well some educational efforts to prevent marijuana-related harms.
- The board can set a maximum THC content for marijuana and cannabis products. However, edibles cannot exceed 100 mg or 10 milligrams of THC per package.
- The bill states that licensees may be granted multiple types of licenses, such as cultivation, manufacturing and wholesale, or they can have an interest in them. However, regulations must be “drawn narrowly” to limit vertical integration for small businesses, and to ensure all licensees are given an equal opportunity to participate on the market. The board members could not have any financial interest in a licensee or an applicant.
- Local governments can opt to not allow all marijuana establishments. However, this is only possible with local voter approval. Even if a county prohibits the business, towns within that county can allow it.
- The board will be required to ensure that existing regulations are aligned with any new requirements “that establish health, safety and security requirements for cannabis dispensing and pharmaceutical processing facilities.”
- The board will also create a Cannabis Micro Business Liaison who will lead a team of microbusiness support staff to assist eligible applicants with business accelerator plans. They would conduct an analysis of possible barriers to entry into the legal market and spread awareness about business opportunities to historically economically depressed communities.
- Microbusinesses will be created as license categories reflecting social equity considerations. Businesses owned by at least two thirds of qualifying individuals are eligible. These include veterans, those who have lived in historically economically depressed communities for at least the last three years, and people who have attended public elementary or secondary schools in these areas for at least five consecutive years.
- The term “historically economically disadvantaged communities”, would refer to either jurisdictions where “offenses of marijuana possession have been committed at a higher rate than the state average in the last 10 years” (or zones defined by the federal government as historically underutilized businesses (HUBZones).
- Microbusinesses can enter into cooperative agreements and lease equipment with other microbusinesses. They may also rent space and equipment and “and manufacture and sell” cannabis on the premises or another licensee.
- Microbusinesses cannot produce or sell more than 1,000 pounds marijuana per year. The canopy area would be limited to a maximum of 10,000 square feet.
- Retailers will be limited to 1,500 square feet, but medical facilities or processors are grandfathered if they have been permitted before July 1, 2024.
- The canopy size of cultivation facilities is limited to 150,000 sq. ft., while existing medical facilities are grandfathered in to the same limit.
- The bill requires the creation of a “retail sales monitoring program” to ensure compliance with sales to one purchaser.
- A cannabis retailer cannot be within a quarter-mile of another marijuana shop. The regulators would be required to make sure that licensees comply with all other land use and zoning restrictions.
- Labels for cannabis products will need to be “complete and accurate, easily discernable and uniform across different products and brands” and accessible via licensees’ website. Labels would need to contain, among other things, all the active and inactive components, as well as the milligrams and percentages of THC, CBD, as well as serving sizes, instructions for use, and child and safety warnings.
- Lab testing would require a sample of each batch to be analyzed, and thresholds for failure would be set according to other state standards. After the manufacturing process is completed, processed products will need to be tested. The bill states that regulators can limit testing for retail marijuana to CBD, THC and terpenes. They could also test for pesticide residues, heavy metals or mycotoxins.
- The bill requires that regulators create rules for routine inspections at all cannabis establishments. These must be done at least once a year. There would be rules governing minimum equipment requirements, secure dispensing methods, wholesale distribution, transfer to retail stores, and the sale of devices.
- The rules on the number licenses that a person can be granted must “ensure all licensees are given an equal opportunity to participate in market”, and prohibit people who have multiple types of business licenses to transfer a license to anyone else who has more than one type of license.
- Regulators will need to create a procedure that allows “certain licensees to obtain hemp extracts, “grown and processed within the Commonwealth according to state and federal laws” and a procedure to allow cannabis licensees to “formulate such extracts into retail products.”
- A Class 1 misdemeanor is committed if marijuana or marijuana paraphernalia are provided to anyone under the age of 21. This can result in a fine up to $2,500 and up to one year imprisonment. A Class 1 misdemeanor would be to advertise marijuana in any publication. Failure to check ID before selling cannabis to minors is a Class 3 Misdemeanor that can carry a fine of up to $500.
- Minors who try to purchase marijuana using false documents will also be charged with a Class I misdemeanor.
- The same would apply if you bought marijuana for an intoxicated individual.
- The regulations would have to be “commercially sensible” and in line with “standards of states that regulate cannabis markets”.
- Under state law, banks and credit unions who work with cannabis businesses are not liable for their involvement in the legal sector. However, nothing requires financial institutions to deal with marijuana clients.
Advocates are confident that Virginians will support legal sales provisions. A Gallup survey released in November showed that a majority among Republicans, along with 70 percent of Americans as a whole, support legalizing marijuana .
According to Ebbin’s bill from the last legislative session recreational cannabis sales were set to begin on January 1, 2024. The sales would have been made through medical cannabis dispensaries and new businesses operated by people living in “historically economic disadvantaged communities”. These operators would also be eligible for support and training from existing medical cannabis companies.
Under the previous bill, marijuana products would have been subjected to an excise duty of 21 percent. Localities could also have added a three percent additional tax. The revenue would have been used to support reinvestment programmes for historically economically depressed communities, education programs for youth at risk and addiction prevention services.
After the GOP-controlled House rejected this proposal, they also killed a separate bill which would have allowed medical cannabis businesses to make certain state-level deductions. Republicans also killed separate legislation that would have create an advisory board for psilocybin and reschedule psychedelic.
In the state, several businesses that deal with hemp were recently fined five figures in an effort to crackdown on hemp cannabinoid-based products.
Two companies, as well as a private citizen, have also filed a lawsuit over the new tightened rules for the hemp products. These set the maximum THC concentration in hemp products to 0.3 percent and 2 milligrams each package. This threshold rendered hundreds products that were already available illegal. In October, however, a court denied their claim.
Last month, Senate President Pro Tempore Louis Lucas’ (D) joked that her support of a plan to bring in two professional sports teams in Alexandria could be conditional on the passage of a marijuana sale bill.
Lucas was named as the co-owner in a media report last year in relation to CBD products. He also owned a cannabis store in Portsmouth. The shop was found to have mislabeled items, including some that contained THC at illegal levels. This problem is prevalent among hemp-derived CBD, which are unregulated in many states.
Why some activists fear marijuana rescheduling: Responding to former FDA official’s dismissal of our concerns (Op-Ed).
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