Virginia lawmakers pass landmark recreational marijuana legalization bills

Virginia marijuana

(This story has been updated with an image of the Virginia state capitol building.)

Virginia took a major step toward becoming the 16th state in the nation to legalize a recreational marijuana market and the first in the South after the House of Delegates and Senate passed different legalization bills on Friday.

The differences in those bills, however, must be ironed out by a legislative committee for Virginia to take the milestone step.

Gov. Ralph Northam supports legalization.

In their votes Friday, House lawmakers passed their bill by 55-42 while the Senate approved its version by 23-15.

One big difference between the two bills appears to be whether vertical integration would be allowed.

Both measures call for a commercial recreational marijuana market to launch on Jan. 1, 2024, a year later than what the governor wanted.

The bills also emphasize licensing opportunities for small and minority-owned local businesses.

Unlike other recent adult-use states, the existing four vertically integrated medical marijuana operators would not be allowed under the legislation to transition first into a recreational market, according to the Virginia Mercury, a nonprofit newspaper covering state politics.

If Virginia legalizes adult use, it would reflect how quickly legalization is occurring across the United States.

Two principal factors seem to be in play:

  • A legalization domino effect along the East Coast.
  • A scramble for new revenue sources to offset state budget woes caused by the economic impacts of the coronavirus pandemic.

Adult-use marijuana experienced a clean sweep at the ballot box in November, with voters in Arizona, Montana, New Jersey and South Dakota all embracing recreational marijuana.

A delay between legalization and a market launch would give Virginia time to create an independent agency, the Cannabis Control Authority, to oversee the market, and to develop regulations and rules, lawmakers said.

“Progress takes time,” Sen. Adam Ebbin, a Democrat from Alexandria and the Senate bill sponsor, reportedly said earlier this week.

“It takes time to do things right. And, personally, I’d rather be able to get the votes to have a responsibly regulated adult-use market in 2024 than have no bill pass at all.”

The two bills broadly include the following provisions, according to Marijuana Policy Project bill summaries and media reports:

  • Early distribution of social equity licenses. Qualified applicants would have to hold at least a 66% ownership stake in the business. Recipients would have access to low-interest loans to help overcome the hurdle of raising capital.
  • Legislation proposed by the governor would have allowed vertical integration, but House lawmakers eliminated that provision. The House version, HB2312, limits businesses to one type of license in efforts to encourage more small and local businesses to participate in the industry.
  • The Senate version, SB1406, would allow companies to vertically integrate, but they would be charged a $1 million licensing fee, the proceeds of which would go to help fund social equity provisions.
  • While not allowing MMJ operators to fast-track, the Senate version would permit those operators to co-locate medical dispensaries and adult-use stores.
  • The House version would leave licensing to the state, while the Senate’s would allow local governments to ban adult-use sales through voter referendum.
  • Adult-use marijuana product sales would be taxed at 21% in addition to the standard state sales tax of 6%. Municipalities could charge up to an additional 3%.

Virginia’s medical marijuana operators had pushed for early entry into the adult-use market, arguing that they had spent tens of millions of dollars to build out operations in an industry that launched just last fall.

Only five vertically integrated MMJ licenses were issued, with each operator granted a virtual monopoly in one of five “health service” areas.

The four MMJ operators include three multistate companies – New York-based Columbia Care, Florida-based Jushi Holdings and Maryland-based Green Leaf Medical – and a Virginia-based company called Dharma Pharmaceuticals.

One license is vacant after Los Angeles-based MedMen Enterprises was forced to surrender its permit.

The Marijuana Business Factbook projects Virginia’s MMJ dispensary sales in 2021 will range from $9 million to $11 million.

Jeff Smith can be reached at [email protected].

3 comments on “Virginia lawmakers pass landmark recreational marijuana legalization bills
  1. Lawrence Goodwin on

    Thanks for the update and great news, Mr. Smith and Marijuana Business Daily!

    For sure, Virginia lawmakers are to be warmly appreciated for seeing the limitless value of female cannabis flowers. Three years to a “market launch” is way too long, though.

    Politicians and bureaucrats everywhere need to be far more efficient with public resources. A regulatory agency for cannabis growers does not have to be so complicated. Did you hear that, New York Gov. Andrew Cuomo? What gives you the right to “tax” a microscopic plant compound? Nothing! Sorry, I digress (he happens to be my governor, and his 10 years of obstruction irk me to no end).

    Arizona’s adult-use stores have already opened less than 3 months after voters there took affirmative action. The process of empowering cannabis entrepreneurs should be comparably easy in every state.

    Indeed, within 3 months, basically in all four economic quarters of every year, cannabis plants can produce an abundance of the most magnificent female flowers. The act of growing female flowers without seeds—still known as “marihuana” in our despicable federal and state laws—is best done inside thoroughly protected indoor spaces, so that pollen from male cannabis flowers gains zero entry; unless by the growers’ carefully timed intent.

    Seedless cannabis growers today utilize mostly electronic lighting systems, etc., yet some—hopefully many more—try to harmonize with the planet and save energy by relying on a combination of natural and artificial light. Sustainable water usage for these specific plants should also be a critical part of the long-term eco-friendly equation.

    Cuomo’s New York is a perfect example of government regulations being way too oppressive and stifling free markets. I’m no economist, rather humbly a servant of locals. Still, I can argue on solid ground that Cuomo is deplorable for abusing the power of his office to deny New York cannabis companies and consumers of their inalienable rights to seedless female flowers.

    He’s arbitrarily imposed a “no smoking” policy for all 6 years of the medical cannabis program. Cuomo’s arrogance, cloaked by his stated concerns for public health and human lungs, should not be emulated anywhere. Let’s not forget that his father, the late Gov. Mario Cuomo, once tried to completely wipe out the cannabis trade in New York. In the 1980s, people on the street said, his father, the State Police and local partners almost succeeded after causing a long dry spell.

    Forgive my tendency to ramble on. The fact remains that cannabis should *never* have been illegal. The quicker lawmakers and bureaucrats in Virginia provide for adult access to female flowers, the better.

    Lady Liberty stands near New York City, yet her state officials themselves clearly know nothing about it. It’s extremely depressing how so many other states are leaving New York behind.

    Reply
  2. Barbara King on

    Good for Virginia, I live in N.C. soon we will have it too.
    We have some Rep’s who don’t want it, but it’s coming.
    and you don’t die from Cannabis.

    Reply
  3. Night Sparkle on

    I am hoping this comes sooner. Currently only CBD oil is legal. I am waiting for the stores. Cause yse it will be Recreational weed. I dont plan on using it for Recreational. I am hoping it will actually help me with headaches I get often. I rather not take OxyCodone for them anymore.

    Reply
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