Virginia has been on a fast-track to legalize since Governor Ralph Northam included cannabis legalization in his budget in December. During his State of the Commonwealth speech this week, Northam reiterated his support for legalization, calling specifically for legalization focused on equity and acknowledging that the criminal justice system “treats different people unfairly.”
“Marijuana is a great example,” Northam said, noting that while white and Black people use cannabis at similar rates, Black people are three and a half times more likely to be charged with a cannabis-related crime, and are almost four times as likely to be convicted. “It’s time,” he said, to “make marijuana legal and end the current system rooted in inequity. We’ve done the research and we can do this the right way, leading with social equity, public health, and public safety.”
Now, Virginia’s legalization plan is already coming together, with the formation of a “Marijuana” subcommittee that is planning to meet twice next week. Details emerged during Friday’s Senate Rehabilitation and Social Services committee meeting.
The subcommittee on Marijuana is scheduled to meet on Tuesday and Wednesday morning to begin discussion of the legislation unveiled by the governor and lawmakers this week. Senator Jeremy McPike will serve as chair. Other members include Senators Ryan McDougle, Scott Surovell, Bryce Reeves, Jennifer Kiggans, Jennifer Boysko, and Lionell Spruill, Sr.
On Friday, Deputy Secretary of Agriculture and Forestry Bradley Copenhaver gave an overview of the legalization proposal. When Northam came out in support of legalization, he established five priorities, which included: social, racial, and economic equity; public health; protections for young people; the requirement to uphold the Virginia Indoor Clean Air Act; and, finally, data collection, which Virginia officials hope positions the state as a model in its approach to legalization.
“This is an area where Virginia has an opportunity to be a real national leader on this issue. According to public health experts that we spoke to, no other state has taken such a comprehensive preemptive approach to collect robust data on all these topics before the legal market opens. So we’re really going to monitor the impact of the policies that we implement,” Copenhaver said during Friday’s meeting.
Zooming in on the timeline, legal sales could start by January 1, 2023, with regulators promulgating rules by July 1, 2022. Expungement would start when the bill takes effect, as soon as July 1, 2021. Home grow of two mature and two immature plants would be allowed per household, and the state is looking to control the density of shops. As Cannabis Wire recently reported, results of a RAND Corporation study showed that the density of licensed cannabis shops was “associated” with young adults consuming cannabis, more frequent use, and intentions to consume, and the density of illicit, or unlicensed, shops was linked to young adults’ “heavy” cannabis consumption.
“Efforts to regulate unlicensed retailers and reduce the density of marijuana retailers may be important factors to be considered when developing strategies to mitigate potential public health harms from expanded legal access to marijuana,” lead author Eric Pedersen said in a release about the study.
Virginia’s Alcoholic Beverage Control Authority would regulate cannabis, and a new cannabis advisory board would “counsel” the board. There will also be a Cannabis Health Advisory Council, and the medical cannabis program will be “as untouched as possible,” but move to ABC during a timeline that works for regulators.
“What we learned from other states is that it’s really a good idea to have all marijuana programs under one umbrella,” Copenhaver said, adding that the licensing program would cover cultivation, manufacturing, retail, wholesale, and testing, with a priority for social equity applicants. ABC could limit the number of licenses that can be allocated.
Copenhaver noted that some other states “have not managed their marijuana market as well as they could,” and he pointed to Oregon, which, he said, ”has seen a lot of problems with supply and demand.” (Read Cannabis Wire’s feature on Oregon’s struggle to regulate cannabis.)
Cannabis products would not be allowed to contain nicotine or alcohol, would contain a universal THC symbol, and would be packaged in opaque materials. Retailers would be required to communicate potential risks of using those products.
Under Northam’s plan, taxes would be collected at point of sale, and products would have a 21% excise tax, plus the state’s existing sales tax, and a 3% local tax, bringing the total taxes levied to roughly, 30%, “which is in line with states such as Colorado and Illinois,” Copenhaver said.
“Our goal is really to generate enough revenue for the program and to cover other revenue goals, but then low enough to capture the illicit market,” Copenhaver said.
Copenhaver described the “keystone” of the bill as equity, adding that after work with the Office of Diversity, Equity, and Inclusion, “we feel like we have set up a really good set of principles in this bill.” Equity provisions include reduced license and application fees, and a new cannabis business and equity support team to help applicants through the process, as well as low-interest loans.
A new Cannabis Equity Reinvestment Fund, which would be overseen by a 20-member board, would receive 30% of cannabis tax revenue, to be used for scholarships, grants for workforce development, mentoring, job training, and reentry programs. These revenues would also contribute to the state’s Indigent Defense Fund, and go toward the Cannabis Equity Loan Fund.
“Thousands have been working on this issue of marijuana legalization for a long time,” Copenhaver said. “This bill didn’t appear out of nowhere. It’s the result, really, of a multi-year effort that has culminated in a piece of legislation that our team feels like we can all be proud of.”
