INDUSTRY

Is Cannabis Legal in Virginia? Lawmakers Approve Historical Legislation

By Gregory Frye

The domino effect continues…

On Friday, Feb. 5, 2021, Virginia lawmakers passed two different bills to legalize adult-use cannabis in the state.

While the two bills – one passed by the House of Delegates and the other by the Senate – contain important differences which must be addressed, the intent is to launch open adult-use cannabis dispensaries in Virgina on Jan. 1, 2024.

Gov. Ralph Northam has unequivocally supported cannabis legalization, which means as soon as a finalized bill lands on his desk, Virginia is expected to become the 16th state in the U.S. to embrace adult-use cannabis. On paper at least.

The Virginia-Pilot reported that, “Beginning in 2024, cannabis can be sold in regulated stores, with tax revenue going to pre-K and public health programs, addiction treatment and a fund to remedy the effects of the drug’s criminalization.”

Some of the notable commonalities between the two bills include social equity licensing opportunities and the inability for the state’s current medical cannabis operators to be first in line for adult-use cannabis licensing.

However, lawmakers still have several issues to sort out, such as whether or not to allow vertical integration or the ability for local governments to ban adult-use sales.

A More Nuanced Approach to Social Equity?

Virginia’s proposed approach to social equity feels much tighter than what we’ve seen from other markets.

In cannabis, the concept of social equity revolves around giving minorities and people of color a fair opportunity to participate in the industry after having been disproportionately impacted by prohibition for so many decades.

In Virginia, for example, Blacks are currently 3.5 times more likely to be arrested for cannabis compared to Whites – despite similar rates of use.

(In some states, this discrepancy is much higher with Blacks as much as nine times more likely to be arrested.)

The war on drugs has been racist from the start, and when you deeply consider the impact prohibition has had on minorities, it only makes sense to ensure they have fair opportunities to be a part of the legal industry.

Social equity in cannabis is an important effort to restore balance, and the surprisingly few cannabis markets who have tried to embrace it have mostly failed in their efforts.

Virginia seemingly aims to tighten things up here with an early wave of social equity licenses where qualifying applicants must hold at least a 66 percent stake of the business, according to the Virginia Mercury.

House Majority Leader Charniele Herring, who sponsored the legislation, has argued during committee meetings that they equity provisions are essential to redressing past wrongs.

“People who look like me don’t have generational wealth,” said House Majority Leader Charniele Herring, who sponsored the legislation.

“This bill is a business opportunity for probably some of the sharpest minds out there and an opportunity for them to participate in a legal market.”

Proposed social equity provisions also include license application assistance and low-interest loans from the state to help with startup funds.

Both the House and the Senate also introduced a measure that would prevent successful social equity applicants from transferring their licenses to people who wouldn’t otherwise qualify.

Additionally, the Mercury reported that:

“Both chambers also added language that would also make the licenses available to someone who attended a historically Black college or university in Virginia, addressing complaints that emerged during public hearings that tying the licenses to criminal charges or areas of residence would unfairly exclude would-be minority entrepreneurs who were nonetheless impacted by prohibition.”

Why Such a Long Timeline to Legalization?

The proposed start of retail sales in 2024 is one year later than the date proposed by Gov. Northam.

This would certainly give the state time to create a regulatory agency – the Cannabis Control Authority – instead of putting the industry into the hands of the Virginia Alcoholic Beverage Control Authority.

However, there is concern about the gap between voting in adult-use cannabis measures and the actual rollout of legal retail sales.

The Virginia Mercury quoted Sen. Jennifer McClellan, D-Richmond, who recently argued about this point in a committee hearing meeting.

“If we know we’re going down the road of legalizing, it seems to me the repeal of simple possession at a minimum should take effect July 1 of this year,” Sen. McClellan said.

“Otherwise all we’re doing is setting up a situation where people are going to continue paying civil fines for something that’s going to be completely legal eventually. And that maintains the disproportionate impact on certain communities, particularly communities of color and poorer communities.”

Although Virginia on July 1, 2020 decriminalized cannabis to a $25 fine for possession of an ounce or less, police across the state have since written more than 4,500 tickets.

If and when Governor Northam signs the new cannabis legislation into law, one has to wonder why not stop cannabis possession fines immediately?

“Progress takes time,” Sen. Adam Ebbin, D-Alexandria, said. “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. And that may well end up being the choice.”

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