Virginia House Committee Passes Marijuana Sales Bill That Would Open Some Retail Stores In January

A Virginia House subcommittee advanced amended legislation on Friday that would allow existing medical marijuana dispensaries and some small businesses to begin selling cannabis to all adults 21 and older as of next January, with plans to license other retailers over the course of 2025.

To take advantage of the early opening date, a medical business would need to “accelerate” six microbusinesses, each of which would get $400,000 in aid under the current version of the legislation. Microbusiness licenses, in turn, would need to be at least two-thirds directly controlled by people who meet certain social equity criteria, with priority given to people meeting multiple criteria.

After adopting a 54-page substitute amendment to the bill, HB 698, and approving subsequent changes during the hearing, the subcommittee of the House General Laws Committee voted 5–0 to report the bill favorably back to the full committee, with one member abstaining.

If enacted in its current form, dozens of marijuana retail stores could open across the state on January 1, 2025.

Del. Paul Krizek (D), who chairs the subcommittee and is the lead sponsor of the measure, said his proposal closely follows the implementation of legal sales in Maryland, “such as slowly rolling out the marketplace, making the product affordable through a low tax rate, using the medical companies to pick up the slack initially and having a rigorous and well-funded social program, which endeavors to assist those Virginians who have been harmed the most by marijuana criminalization.”

Products sold under the proposal would incur a 9 percent tax.

Among various changes made in Krizek’s substitute bill, one of those most welcomed by equity advocates adds past marijuana misdemeanor convictions to the list of criteria making someone eligible for a microbusiness license. Someone who’s the parent, child, sibling or spouse of a person who has been convicted would also be eligible.

Other criteria include having resided in a historically economically disadvantaged area, having attended a public school in such an area or a college or university with a high proportion of Pell grant recipients, having received a Pell grant themselves or being a military veteran.

Under an amendment agreed to in concept by the panel’s lawmakers during the hearing, applicants who meet multiple criteria would be given greater preference when regulators award the microbusiness licenses.

With five existing medical marijuana providers in the state, the accelerator could potentially support 30 microbusinesses, though hundreds more non-accelerated microbusiness licenses for various cannabis-related activity would also eventually become available under the bill.

Friday’s subcommittee hearing on the proposal proceeded relatively smoothly given the many ongoing disagreements among both lawmakers and outside advocates on how to legalize sales in the commonwealth. While many—even some marijuana opponents—agree it’s important to regulate the market after legalizing cannabis use, possession and home cultivation in 2021, stakeholders still want to see different things out of legislation to create a licensed market.

Retail provisions were initially included in the 2021 Democrat-led bill, but Republicans, after winning control of the House and governor’s office later that year, subsequently blocked the required reenactment of the regulatory framework for sales.

Now, with Democrats having taken control of both legislative chambers last November, lawmakers are working to build consensus on a retail sales proposal despite the threat of a veto from Gov. Glenn Youngkin (R), who said earlier this month that he doesn’t have “any interest” in legalizing sales under the Democrat-led bills.

A defining feature of Krizek’s revised bill is that it would allow the state’s five licensed medical marijuana companies to begin adult-use sales in advance of new retailers being licensed and opening for business. Supporters say that’s the fastest route to regulated cannabis sales in Virginia, but some critics have also warned that the approach would give a huge advantage to large medical operators from outside the state rather than local entrepreneurs and small businesses.

A representative for the Virginia Cannabis Association, for example, which represents a number of hemp businesses and is currently neutral on HB 698, said at the hearing that the revised bill “still provides too many benefits for large medical operators, and that’s one of things we want to continue to work on to make sure that everybody has fair and equal access to this market.”

But most speakers signaled an interest in working together to craft legislation that could win approval from the legislature and make it to Youngkin’s desk.

“We do have concerns with this bill as drafted,” said the Virginia Cannabis Association speaker, “but we want to be good-faith players in this conversation and appreciate the opportunity to do so.”

The bill has support from a number of advocacy groups, including NORML’s Virginia chapter. On Friday, Chelsea Higgs Wise of the group Marijuana Justice also spoke in favor.

While Wise has been critical of the bill in the past for its prioritization of medical marijuana businesses—a provision she strongly opposed in a recent Marijuana Moment op-ed—she said the revised bill has made meaningful strides toward equity by specifically prioritizing people with past cannabis convictions and ensuring a source of startup funding for some operators.

At her suggestion, the House panel doubled the substitute bill’s proposed payments to accelerated microbusinesses, raising the amounts from $200,000 as proposed by Krizek to $400,000. And though Wise applauded that direct payments would allow money to be transferred quickly, she encouraged lawmakers to add some element of transparency to the process, as well as a deadline for the payments.

Initially the panel was prepared to approve a slightly higher amount—$416,666.67 per business—but members revised Wise’s proposed $2.5 million total from each medical marijuana business down to $2.4 million in order to make it more easily divisible by six.

She explained her support of the bill by contrasting the revised House proposal against a separate legalization bill, from Sen. Aaron Rouse (D), that’s currently making its way through the Senate.

“This bill now includes equity components such as impacted people, upfront capital and a head start,” Wise told Marijuana Moment of the House measure, “where Rouse’s bill is only an equal playing field.”

Rouse’s measure, SB 448, has passed out of two Senate committees already, with a hearing in the Senate Finance and Appropriations Committee set for next week.

Unlike Krizek’s bill, Rouse’s would not allow medical marijuana companies to enter the recreational market sooner than others, and it contains additional benefits for current hemp growers seeking to transition to marijuana. But some advocates, including Wise at Marijuana Justice, soured on the plan after a number of criminal penalties were added, including at least one that included mandatory minimum sentencing.

At a Senate committee hearing this past week, Wise said she initially planned on supporting Rouse’s bill but flipped to oppose it “because of the new crimes and the mandatory minimums.”

At a Senate cannabis subcommittee hearing earlier this month, lawmakers chose Rouse’s measure over a competing one from Sen. Adam Ebbin (D), SB 423. At the time, Krizek’s bill was identical to Ebbin’s proposal, but that’s no longer the case following the adoption of the new substitute.

Advocates at a Senate panel hearing this week separately noted that despite legalization, hundreds of people are still incarcerated for marijuana crimes, either on standalone cannabis charges or as the result of marijuana enhancing penalties for other offenses. SB 696, from Sen. Angelia Williams Graves (D), would work to provide resentencing relief for those individuals, mandating that individuals incarcerated for certain marijuana offenses would receive automatic resentencing hearings and their punishments adjusted.

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Democrats’ victories last November to clinch control of both legislative chambers, however, have some cannabis advocates hopeful that the state could enact cannabis sales provisions this year. But that path requires building consensus among Democrats in the legislature while also passing a bill that can avoid a possible veto from Virginia Gov. Glenn Youngkin (R)—or galvanizing enough lawmakers in the polarized state to overcome a veto.

Regardless of what specifics end up in the legal sales bill, it’s likely to face a skeptical reception from Youngkin, who said earlier this month that he doesn’t have “any interest” in legalizing sales under the Democrat-led bills.

“I just don’t have a lot of interest in pressing forward with marijuana legislation,” he told reporters following his latest State of the Commonwealth address.

House Majority Leader Charniele Herring (D) said at the time that it’s “an important public safety matter that we have a regulated market.”

“The governor should be careful,” she said. “A bill gets to his desk, and he vetoes it, I’m not sure what that communication is going to be to the public about their safety.”

Youngkin’s disinterest in marijuana reform isn’t necessarily a surprise. Advocates were relieved that he committed to simply not attempt to overturn the noncommercial legalization law enacted by his Democratic predecessor in 2021.

Youngkin said he was “not against” allowing commercial sales, per se when he was first elected. He expressed that there were certain Democratic “non-starters” such as provisions setting labor union requirements for marijuana businesses—and he wanted to address concerns from law enforcement—but he generally indicated that he did believe there was a bill he could support.

That expectation has been tempered during the beginning of the new year, however.

Last session, a cannabis sales bill did advance through the Democratic-controlled Senate, but it stalled in committee in the House, which at the time had a GOP majority.

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Photo courtesy of Chris Wallis // Side Pocket Images