A Virginia Senate subcommittee has approved a bill that would create a retail market for cannabis in the state, paving the way for legal sales to begin in January 2025. The bill, sponsored by Sen. Aaron Rouse, D-Virginia Beach, would also allow for outdoor cultivation of cannabis, which was not permitted in a rival proposal by Sen. Adam Ebbin, D-Alexandria.
The subcommittee, which is part of the Senate Rehabilitation and Social Services Committee, voted 3-2 to advance Rouse’s bill, merging it with Ebbin’s bill. The main point of contention was whether to give medical marijuana companies a head start in the market, as Ebbin’s bill proposed. Rouse’s bill, on the other hand, would create a level playing field for big and small players alike, and would also require the Cannabis Control Authority, the agency that would oversee the market, to consider factors such as economic disadvantage and social equity when issuing licenses.
“I’m not very comfortable with a head start. I think we can have a process where everybody is trying at the same time to make it work,” said Sen. Schuyler VanValkenburg, D-Henrico County, a member of the subcommittee.
Virginia legalized possession and home growing of cannabis in 2021
Virginia became the first state in the South to legalize the possession and home growing of cannabis in 2021, following the passage of a bill by the Democratic-controlled General Assembly. However, the bill did not finalize the details of a regulated marketplace, which was supposed to be established by 2024. The bill also allowed localities to opt out of allowing retail sales within their borders, subject to a referendum.
However, after Republicans regained the majority in the House of Delegates in 2022, they did not make it a legislative priority to create a retail market for cannabis, leaving a vacuum that allowed the illicit market to flourish. According to New Frontier, a group that studies the cannabis industry, the black market for cannabis in Virginia grew from $1.8 billion a year in 2021 to $2.4 billion in 2023.
“We already have a very large cannabis market,” Ebbin said. “Unfortunately, it’s controlled by cartels and organized crime.”
Virginia aims to create a safe, regulated, and equitable cannabis market
The bill that the subcommittee approved on Thursday aims to create a safe, regulated, and equitable cannabis market in Virginia, that would generate tax revenue, create jobs, and reduce the harms of prohibition. The bill would set a 12% tax rate on cannabis sales, which would be in addition to the existing sales tax. The revenue from the tax would be allocated to various funds, such as the Cannabis Equity Reinvestment Fund, the Cannabis Prevention and Treatment Fund, and the Cannabis Regulation Fund.
The bill would also create five types of licenses for the cannabis industry: cultivation, processing, distribution, retail, and testing. The number of licenses in each sector would be determined by the Cannabis Control Authority, based on market demand and public health and safety. The bill would also prioritize social equity applicants, who are defined as those who have been disproportionately impacted by the enforcement of cannabis laws, or who are from economically disadvantaged communities.
The bill would also allow adults 21 and older to possess up to one ounce of cannabis, and to grow up to four plants per household, as long as they are not visible from a public place. The bill would also expunge the records of those who have been convicted of simple possession of cannabis, and would provide for the automatic sealing of records for other cannabis-related offenses.
The bill faces an uncertain future in the full Senate and the House
The bill that the subcommittee approved still has to pass the full Senate Rehabilitation and Social Services Committee, and then the full Senate, before it can move to the House of Delegates, where it faces an uncertain future. The House has not taken up any cannabis-related bills this session, and the Republican leadership has expressed skepticism about legalizing cannabis sales.
House Speaker Todd Gilbert, R-Shenandoah County, said in a statement earlier this month that he was “not convinced that the social costs of legalizing marijuana outweigh any perceived benefits.” He also said that he was concerned about the impact of cannabis on mental health, public safety, and youth.
However, advocates for cannabis reform are hopeful that the bill will gain momentum and support from both parties, as more states across the country have legalized cannabis for medical or recreational use. According to a poll by the Wason Center for Civic Leadership at Christopher Newport University, 68% of Virginia voters support legalizing cannabis for adult use.
“It’s about time that Virginia joins the 19 other states and the District of Columbia that have already legalized cannabis for adult use,” said Jenn Michelle Pedini, the executive director of Virginia NORML, the state chapter of the National Organization for the Reform of Marijuana Laws. “Virginians deserve access to a safe, regulated, and equitable cannabis market, that will benefit our communities, our economy, and our health.”