Virginia is on the verge of becoming the latest state to legalize and regulate the retail sale of cannabis to adults 21 and older. However, the path to legalization is not without challenges, as lawmakers from both chambers of the legislature have advanced competing proposals that differ significantly in their approach and vision for the cannabis industry. In this article, we will examine the key features and implications of the two bills, and the prospects of reaching a consensus before the end of the session.
The House Bill: A Pragmatic and Exclusive Framework
The House of Delegates passed HB 698, sponsored by Del. Paul Krizek (D), by a narrow margin of 52-48 on Monday. The bill proposes a pragmatic and exclusive framework for cannabis sales, with a focus on public safety and regulatory oversight. Some of the main aspects of the bill are:
- It would license cannabis cultivators, manufacturers, and retailers, and set a 9% tax rate for the industry.
- It would ban outdoor commercial cannabis cultivation, citing environmental and security concerns.
- It would allow existing medical cannabis operators, several hemp companies, and up to 60 equity-focused microbusinesses to launch adult-use enterprises at the start of next year, subject to a hefty fee of $400,000 for the former, which would be used to support the latter through an accelerator program.
- It would create a Cannabis Control Authority to regulate the industry, and a Cannabis Public Health Advisory Council to monitor and evaluate the public health impacts of legalization.
The House bill reflects a cautious and conservative stance towards cannabis legalization, aiming to create a tightly controlled and limited market that minimizes potential social harms and maximizes public safety. However, critics of the bill argue that it fails to address the social justice and economic development aspects of legalization, and that it favors existing operators over new entrants and small businesses.
The Senate Bill: A Comprehensive and Equitable Framework
The Senate approved SB 448, sponsored by Sen. Aaron R. Rouse (D), in a voice vote on Monday, setting the bill up for a final vote on Tuesday. The bill proposes a comprehensive and equitable framework for cannabis sales, with an emphasis on social justice and community reinvestment. Some of the main aspects of the bill are:
- It would set the maximum tax rate for cannabis products at 17.5%, which includes a 12.5% excise tax, up to a 3.5% local tax, and a 1.125% tax to fund K-12 education.
- It would facilitate a general licensing period, with retailers expected to open sometime in 2025. There are no special carve-outs for existing operators or social equity applicants, but the bill mandates that at least 40% of the licenses be awarded to social equity applicants, defined as those who have been disproportionately impacted by previous cannabis laws or who operate in economically distressed areas.
- It would create a Cannabis Control Board to regulate the industry, and a Cannabis Equity Reinvestment Board to allocate funds for various programs and initiatives aimed at addressing the historical and ongoing harms of cannabis prohibition, such as expungement, workforce development, youth mentoring, and substance abuse treatment.
The Senate bill reflects a progressive and inclusive stance towards cannabis legalization, aiming to create a diverse and competitive market that benefits communities that have been marginalized and harmed by previous cannabis laws. However, supporters of the bill face opposition from the Republican governor, Glenn Youngkin, who has expressed skepticism about further cannabis reforms, and from some law enforcement and public health groups, who have raised concerns about the potential negative consequences of legalization.
The Road Ahead: Reconciliation and Compromise
The advancement of the two bills marks a significant step in Virginia’s journey towards cannabis legalization, but it also signals a complex and contentious process of reconciliation and compromise. The two bills differ substantially in their vision and approach for the cannabis industry, and lawmakers from both chambers will have to work out their differences before the end of the session on March 10. Some of the key issues that will need to be resolved include:
- The tax rate and allocation of revenue
- The licensing structure and criteria
- The regulatory and advisory bodies
- The timeline and scope of legalization
The outcome of the negotiations will determine the shape and size of Virginia’s cannabis market, and the impact of legalization on the state’s economy, society, and public health. While the prospects of reaching a consensus are uncertain, advocates of legalization are hopeful that lawmakers will put aside their partisan and ideological differences, and craft a bill that reflects the will and interests of the majority of Virginians, who have expressed strong support for legalizing cannabis sales.
