Two competing bills to legalize commercial marijuana sales in Virginia are now headed to votes on the floors of the House of Delegates and Senate, setting up a possible clash between lawmakers and advocates who disagree on the best way to open a retail market in the commonwealth.
On Thursday, legislation in the Senate—SB 448, from Sen. Aaron R. Rouse (D)—passed out of the body’s Finance and Appropriations Committee on a 9–5 vote, with one member abstaining. That was the measure’s final stop in a multi-committee process and it next proceeds to the Senate floor.
A separate House proposal, meanwhile—HB 698, from Rep. Paul Krizek (D)—advanced out of committee earlier in the week and is set for floor debate on Friday.
Both measures face a crossover deadline Tuesday, at which point they must be passed out of their chamber of origin in order to remain alive for the session.
Despite many similarities in the two plans, sharp differences remain that have divided stakeholders. Existing medical marijuana businesses prefer the House measure, which would allow them to begin sales on January 1, 2025—earlier than all but about two dozen equity-focused microbusinesses. Other retailers would open later in the year.
Hemp growers in the commonwealth, meanwhile, prefer the Senate bill, which would not give any category of applicants an early start on sales, though stores wouldn’t open until later in 2025.
Rouse highlighted that difference during his comments to colleagues on Thursday, saying his Senate bill offers a more fair-minded market launch.
“In this bill, no one applicant is preferred over another, and there are also no head starts,” Rouse told a Senate subcommittee earlier in the afternoon ahead of the full panel vote. “SB 448 is the only option to prevent multi-state operators from monopolizing the market and ensure that all licensees have an equal and meaningful opportunity to participate in this market on day one.”
The House bill, by contrast, would let the state’s five medical marijuana operators and up to 30 microbusinesses open for retail sales on January 1—earlier than under the Senate proposal. Each medical operators would need to pay $400,000 to six different equity-owned microbusinesses, which could also begin sales on January 1, in order to qualify for the early opening.
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Although use and possession are already legal in Virginia, efforts to allow commercial sales have been blocked by Republicans in the legislature in recent years. But with Democrats now in control of both chambers after last November’s elections, advocates are hopeful this could be the year a retail sales bill becomes law.
Gov. Glenn Youngkin (R), however, said last month that he doesn’t have “any interest” in legalizing sales under either of the Democrat-led plans.
Before the full Finance and Appropriations Committee vote, its Subcommittee on Resources approved a substitute to SB 448 that made some changes to how marijuana products would be taxed.
Rather than a 12 percent excise tax as included in an earlier version, the substitute would levy a 12.5 percent state excise tax plus up to a 3.5 percent optional local excise tax, according to a staff explanation of the change. Only a portion a portion of the state’s retail sales tax would apply, however: the 1.125 percent that funds K–12 education.
All told, legal products could see tax rates of up to 17.5 percent, staff said.
The latest version of the Senate bill also does away with a number of criminal penalties around unlicensed cannabis sales, which had been borrowed from state law around alcohol. At least one would have created a mandatory minimum penalty.
But after justice advocates called those penalties dealbreakers, the subcommittee reverted to lesser penalties that were contained in the original bill.
Another key difference between the two bills is that the House measure would prohibit outdoor cultivation entirely by licensed businesses, requiring all marijuana to be grown indoors. The Senate proposal, on the other hand, would ban outdoor grows by larger cultivators but allow smaller licensees to grow outside.
Jason Blanchette, president of the Virginia Cannabis Association, which represents a number of hemp growers, said the prohibition on outdoor grows would be a costly requirement for smaller businesses and further advantage large operators.
“It cuts out 95 percent of anybody that would want to be a small business that would want to be a cultivator if they are forced to grow just like the medical ops grow currently,” he told Marijuana Moment. “It really is a nonstarter for anybody that’s a small business owner other than someone who’s coming in with a significant amount of capital and has $20 million to plop down on a facility.”
Nevertheless, Blanchette said he feels good about the week’s developments so far.
“We have two cannabis moving through the Virginia General Assembly,” he said. “That’s amazing.”
“There’s a whole lot more game to play,” Blanchette continued, “but I would say the good thing is the stakeholders are talking behind the scenes to try to make the bills a little bit closer.”
JM Pedini, development director for NORML and executive director of the advocacy organization’s Virginia chapter, said the group’s focus remains on “ensuring that Virginia consumers have access to cannabis that is safe, convenient, and affordable sooner rather than later.”
Pedini has spoke in favor of both bills in recent weeks, recommending technical fixes along the way.
“We’re almost to the halfway mark and there’s still a lot of work to be done,” they told Marijuana Moment in an email after Thursday’s committee vote. “In order for these bills to have any chance of becoming law, there will need to be careful consideration as to what the Youngkin administration is even willing to entertain.”
When he was first elected, Youngkin said he was “not against” allowing commercial sales categorically. He expressed that there were certain Democratic “non-starters” in earlier 2021 legislation such as provisions setting labor union requirements for marijuana businesses—and he wanted to address concerns from law enforcement—but he generally indicated that there was a bill he could support.
That expectation has been tempered during the beginning of the new year, however, with some predicting the governor will veto any legal sales bill that lawmakers send him.
Blanchette, of the Virginia Cannabis Association, said he’s hopeful lawmakers can arrive at a measure that will avoid Youngkin’s veto.
“We are cautiously optimistic that if we can make it so it’s not just an absolute, egregious reason inside the bill for him to just red-pen it, then we do think it stands a shot,” he said. “We’ve taken a monumental step already, and I think we just need to continue and keep going.”
But Chelsea Higgs Wise, of the advocacy group Marijuana Justice, said the outstanding differences in the two bills “should worry every Virginian that championed 2021 legalization.”
On the House side, she said, lawmakers have worked to strengthen equity measures since that bill was introduced, while “the Senate patron has refused to include any meaningful equity and continues to champion an equal start without acknowledging that minority businesses are never on the same starting line without meaningful inclusion.”
Despite not wanting to prioritize any one group, Wise asserted, Rouse’s “‘equal start’ without direct support to minority businesses will surely mean Black and brown entrepreneurs are late to the party.”
A sales bill did advance through the Democratic-controlled Senate last session, but it stalled in committee in the House, which at the time had a GOP majority.
Separately, a Senate committee voted unanimously on Wednesday in favor of advancing a bill to would prevent the state from using marijuana alone as evidence of child abuse or neglect, or as a reason by itself to deny custody or visitation rights. The change is meant to protect parents and guardians from discrimination around state-legal cannabis.
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