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The five Ws of weed in the commonwealth

A portrait of Sen. Rouse
Shaban Athuman
/
VPM News
State Sen. Aaron Rouse, D–Virginia Beach, talks about his bill SB 448, which would create a framework to establish a retail marijuana market starting in January 2025.

Two General Assembly bills offer different futures for cannabis in Virginia.

Possession of small amounts of marijuana has been legal in Virginia since 2021. But when state legislators legalized it, they didn’t set up an adult-use market, the term for marijuana retail sales that don’t require a certification from a medical professional.

While the 2021 bill technically allowed for sales beginning in 2024, the General Assembly needed to enact a legislative framework to create the market and set rules and regulations that the Virginia Cannabis Control Authority would enforce. During the 2023 session, the Republican-controlled House of Delegates let a retail market bill, which passed through the Democrat-controlled Senate, die in committee.

This year, the Democrat majority in the General Assembly is considering how to set up that retail market. This includes not just dispensaries, but also growers, processors, shipping and testing facilities. Republican Gov. Glenn Youngkin has indicated he won’t sign a bill, saying he’s “not interested” in legal cannabis.

Lawmakers have submitted two competing frameworks, which have seen significant changes as they move through the legislative process. The Senate’s working version of the bill is sponsored by state Sen. Aaron Rouse (D–Virginia Beach) and incorporates another bill sponsored by state Sen. Adam Ebbin (D–Alexandria). The House of Delegates' bill — that chamber’s version of Ebbin’s bill — is sponsored by Del. Paul Krizek (D–Fairfax).

Both proposals would allow those 21 and older to purchase retail weed, except when a retailer “knows or has reason to believe” the buyer is intoxicated or is making the purchase for someone under 21.

But there are significant differences in how each proposal would set up the market — and enforce regulations. Below are highlights from each bill’s approach.

Who?

Senate bill: Businesses could apply for licenses for retail, cultivation and transport of cannabis when approved by the CCA, which would set fees for the license. But the CCA could also waive the fees for applicants with an eye toward equity.

“I wouldn't bring forth a new bill that doesn't have a social equity component to it,” Rouse said in an interview .

This bill would require the CCA to set out a process geared toward identifying applicants for cannabis businesses that are owned by members of a minority group or someone who may have been affected by laws criminalizing marijuana. But the bill lacks any requirements for issuing licenses to applicants identified in those groups.

Sen. Rouse gives remaks to members of the media
Shaban Athuman
/
VPM News
Sen. Aaron Rouse, D-Virginia Beach, gives remarks to members of the media after a Senate Committee on Rehabilitation and Social Services subcommittee heard his Senate Bill 448, which would create a framework to establish a retail marijuana market starting in January 2025, on Thursday, January 25, 2024, at the General Assembly Building in Richmond, Virginia.

Inclusion would be determined through residency in “historically economically disadvantaged communities,” attendance in higher education settings where 30% of students are eligible for Pell grants or being a military veteran. Historically economically disadvantaged communities are defined as a place “in which a majority of the population are people of color” or “a low-income geographic area.”

“We have still not carved out any way for the [people] most impacted to be intentionally included,” said Chelsea Higgs Wise, head of the advocacy organization Marijuana Justice, while recently discussing drug laws’ damage to the Black community.

The bill would also identify hemp growers who have been in the industry since January 2021, prioritizing some businesses.

This language asking CCA to identify hemp growers and small businesses doesn’t affect the CCA’s ability to issue licenses, but provides “heightened criteria” for consideration, said Greg Habeeb, a lobbyist representing the Virginia Cannabis Association.

The bill would also set up a minority and small business liaison, and a support team that would work on small business participation.

Rouse said he wanted to avoid “head starts” for anyone in the industry.

“There's a lot of work that has to be done in order to stand up this this retail market for cannabis,” he said in an interview last week.

House bill: The medical marijuana industry has given favorable testimony to this bill in hearings. If medical marijuana companies pay a fee to the Department of Taxation, they would be able to start selling cannabis for adult use on July 1. Last week, a House committee voted to increase this fee to $2.4 million from $1.2 million.

Medical marijuana companies also would have to incubate “microbusinesses” — funded through licensing fees — for at least a year. Owners of the microbusinesses would have to meet criteria similar to stipulations in the Senate bill: attending a school in a historically economically disadvantaged community, being a veteran, or receiving a Pell grant or attending a higher education institution where 30% of students are eligible for a Pell grant.

A House committee voted last week to adopt language that gives preference to applicants meeting more than one of those criteria.

The CCA would identify appropriate applicants and set up a path to give microbusinesses preferential consideration in the licensing process, as well as lowering barriers to entry.

Those microbusinesses and five industrial hemp processors could start operating on Jan. 1, 2025, and other businesses could start in July 2025.

What?

Senate bill: This bill raises the amount of botanical cannabis a person can legally carry from 1 ounce to 2.5 ounces. Retail stores wouldn’t be able to sell more than 2.5 ounces to a customer in a single transaction.

The CCA would set THC limits on various forms of cannabis, like food, liquids or oils. Currently, the ceiling is 10 mg per serving and 100 mg per package, though the control authority could lower the limits.

House bill: Possession limits would not change. Pharmaceutical retailers would be prohibited from selling more than 1 ounce of botanical cannabis, 5 grams of cannabis concentrate products and cannabis products with more than 500 mg of THC to an individual in a single purchase.

When?

Senate bill: The CCA would issue licenses on July 1. But retail sales wouldn’t begin until Jan. 1, 2025.

“I introduced my bill as just a framework to ensure that everyone has an opportunity to go to market at the same time,” said Rouse in an interview last week. The six months between the licensing process and the sales start date would allow for small businesses to have products for the market, he said.

Crisco with weed
Shaban Athuman
/
VPM News
Jake Crisco, general manager of the Green Leaf Medical Cannibis facility, holds up a piece of matured weed on Thursday, February 1, 2024 in Richmond, Virginia.

House bill: Existing medical marijuana retailers could sell retail weed beginning July 1. All other retailers in the recreational market would be able to obtain a license on that date — but begin sales on Jan. 1, 2025.

“NORML’s priority is ensuring that consumers have access to marijuana that is safe, convenient and affordable. And in this case, sooner rather than later,” said JM Pedini, the executive director of Virginia’s branch of the National Organization for the Reform of Marijuana Laws.

Where?

Senate bill: The bill limits how many licenses are dispensed: 400 retail stores, 450 cultivation facilities and 50 marijuana transporters, among other categories.

The bill has fewer restrictions on how marijuana licensees are distributed across the commonwealth, aiming for a more market-based approach.

Higgs Wise said that medical operators’ existing facilities could hamper an even geographic distribution of facilities by monopolizing the areas where they’re already running.

Through a referendum, localities can prohibit retail marijuana stores from opening, but other businesses in the new industry would be allowed.

House bill: The bill issues licensees based on senatorial districts, which correspond to the 2020 census. The CCA would issue at least eight retail licenses per district and five cultivation licenses per district, for example.

Pedini said this would ensure a more equal distribution of license types, avoiding more cultivation in an area like rural Southwest Virginia and more retail in suburban Northern Virginia.

Pharmaceutical processors and dispensaries with permits from before Feb. 1 aren’t subject to the license requirements.

This bill also has an opt-out referendum for all types of marijuana stores. But short of a special referendum, an opt-out vote would likely happen in November — after the potential start date for marijuana sales.

Why?

Both bills seek to regulate an existing market for marijuana. But at their heart, the current legislative debates are over what trade-offs should be made in creating that market.

On one hand is a quickly set-up marketplace that could deliver cannabis tested for safety and tax revenue earlier to consumers.

A 2020 report from JLARC said that depending on sales and the tax rate, commercial marijuana could create between $31 and $62 million for Virginia. But both bills levy taxes lower than what the JLARC study assumed. The Department of Planning and Budget said that the Senate bill would result in $8.24 million in taxes in 2025 and $104 million in 2030. The House bill could result in $9.73 million in 2025 and $113.91 million in 2030.

Krizek, the House bill’s sponsor, said the lower tax rate would help make legal weed more competitive with the unregulated market. A report from the CCA on medical marijuana said Virginia prices pushed those who could buy medical marijuana to obtain it from sources other than pharmaceutical processors.

On the other hand is assuring the financial benefits from a large market are equitably spread out, especially considering marijuana users and sellers historically being incarcerated or convicted of felonies.

The benefits could be huge. The JLARC study said that the marijuana industry could create between 11,000 and 18,000 jobs. And in testimony to the Senate Rehab committee, Ebbin said data from cannabis firm New Frontier Data indicated that Virginia’s unregulated market has grown from $1.8 billion before 2021’s legalization to $2.4 billion in 2023.

Wise speaks at a podium
Shaban Athuman
/
VPM News
Chelsea Higgs Wise, co-founder of Marijuana Justice Virginia, gives comments during a Senate Committee on Rehabilitation and Social Services subcommittee on Senate Bill 448 on Jan. 25.

Bonus: How (is it enforced)?

Senate bill: On Jan. 31, the Senate Courts of Justice committee attempted to mirror Virginia’s alcohol regulations when setting up enforcement of the marketplace.

Higgs Wise and Marijuana Justice said they pulled support from this bill as it made its way through the committee.

“This bill does not contain equity, it contains identification of poor people. It does not allow them to be in the market. And this type of enforcement will continue to target people from staying out of this industry,” she said last week.

House bill: The retail market bill is separate from an enforcement bill, sponsored by Del. Charniele Herring (D-Alexandria).

Jahd Khalil covers local government, the economy and labor issues for VPM News. Previously, he covered state government for RadioIQ and was a freelance journalist based in Egypt.