After becoming the first Southern state in the country to legalize cannabis in 2021, Virginia appears to be inching toward the next steps in establishing its recreational cannabis market as lawmakers passed legislation that would allow retail sales to begin in the state in 2025, according to an AP News report.
Last week, the House of Delegates and Senate approved identical versions of the legislation, with each signing off on the bills approved in the opposite chamber. The legislation now heads to the desk of Republican Gov. Glenn Youngkin for final approval.
A Retail Cannabis Market in Virginia: The Nitty Gritty
If Youngkin gives his sign off, the legislation would allow Virginia to begin taking applications on Sept. 1 for the cultivation, testing, processing and sale of cannabis.
The retail market would be set to officially launch on May 1, 2025, with a tax rate of up to 11.625%. Of that maximum rate, 8% would go toward the state, alongside a 2.5% local option tax and 1.125% for K-12 education, according to Greg Habeeb, a former Republican legislator who is currently lobbying for the Virginia Cannabis Association.
Fairfax County Del. Paul Krizek said that no group would get a head-start in retail cannabis sales through the legislation. However, these versions contain preferences for certain micro-businesses with the intention to encourage participation in the industry by those from historically economically disadvantaged communities.
These preferences, which Krizek described as “race-neutral,” will offer “significant economic opportunities for economically disadvantaged persons,” he said, including those who have been negatively impactful due to the War on Drugs in the United States.
Additionally, the legislation would increase the amount of cannabis a person over 21 can possess from one ounce to two-and-a-half ounces. Localities would also be allowed to hold a referendum on whether or not to prohibit retail cannabis dispensaries in their regions.
A Years-Long Battle
Krizek, who carried the House version of the bill, said that it would launch the adult-use cannabis market in a “responsible and thoughtful way.”
“And we’ve done so because it’s time to give Virginia’s $3 billion illicit market a run for its money,” Krizek said. “And it’s time to give Virginians access to a safe, tested and taxed product.”
The versions of the bills that passed were identical and the end result of compromise, according to Krizek and Senate lawmakers.
Virginia did things a bit differently than other states that have moved toward adult-use cannabis reform in recent years. The 2021 bill approved by the Virginia General Assembly and signed into law by the governor allowed adults over the age of 21 to possess up to an ounce of cannabis and grow up to four plants per household. Adults over 21 are also allowed to share or transfer up to one ounce of cannabis to one another without remuneration, or a monetary transaction in return.
Patients who have a qualifying condition and receive a written certification from the proper licensed health professionals are also able to purchase medical cannabis from dispensaries.
However, after winning control of the House and governor’s office later in 2021, Republicans repeatedly blocked the reenactment of a regulatory framework to launch legal cannabis sales in Virginia. With the lack of a retail cannabis market, critics argue that the current model allows the state’s illicit market to continue growth and raking in revenue.
The Still-Uncertain Fate of Virginia’s Retail Cannabis Market
And even this latest development doesn’t necessarily promise an immediate future for Virginia’s regulated cannabis market.
In January, Gov. Youngkin told reporters, “I just don’t have a lot of interest in pressing forward with marijuana legislation.” Still, he has yet to indicate whether or not he plans to veto the legislation. According to the Associated Press, his press office declined further comment after the legislation was approved. Though Habeeb indicated that he believes Youngkin will give the bill “a very serious look.”
Like the 2021 bill that originally legalized cannabis in Virginia, the recently approved legislation advanced broadly along party lines with little Republican support.
House Republican Leader Todd Gilbert questioned the notion that passing the bills would eliminate the black market, saying the expectation was “laughable.” Religious and socially conservative groups have also pushed back against the bill, raising concerns around addiction and the effects an accessible adult-use market could have on children.
As the legislation advanced, advocates and supportive legislators still voiced their optimism about the proposals and what establishing a retail market in Virginia could mean for residents.
Chelsea Higgs Wise, member of the advocacy group Marijuana Justice which rallied legislators to include equity measures in the bill, said she was “thrilled” that a proposal passed that also supports equitable access and inclusion to the industry.
“I’m also hopeful, with regulation passing, [that] we pass and fight for the resentencing bill to help people serving time for old marijuana offenses, because this three-year wait has impacted them the most,” Higgs Wise said.
Democratic Sen. Barbara Favola emphasized the amount of compromise that went into these bills to the chamber, saying that lawmakers were able to address the concerns of medical cannabis growers and those looking to bring cannabis to the general retail market.
“This bill may not be perfect, but it’s pretty good,” Favola said. “It’s a very, very good framework that I think the governor should consider.”
