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Virginia MJ Industry Hits Snag as Subcommittee Tables Two Bills to Launch Retail Market

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Virginia became the first state in the South and 17th state overall to legalize recreational cannabis in 2021, ushering in a new era for the state and, potentially, some of its neighbors.

While adults can legally possess, share up to one ounce of cannabis and cultivate up to four cannabis plants in their primary residence, the state is taking its time establishing its regulated cannabis market. Now, two different proposals meant to jumpstart the retail industry and establish regulations in the state were rejected by a Virginia House panel, WRIC reports.

The House General Laws subcommittee voted down two bills, one from Del. Michael J. Webert (R-Fauquier) and another from Del. Keith Hodges (R-Middlesex) during a meeting Tuesday evening, the latest stall in Virginia’s ongoing process to jumpstart retail sales.

The legislation introduced by Del. Hodges, HB 1464, would allow the Virginia Cannabis Control Authority to begin issuing cannabis licenses on July 1, 2024. Starting July 1, 2023, the measure would also allow certain pharmaceutical and industrial hemp processors to cultivate, manufacture and sell cannabis to adults over the age of 21, pending establishment of the retail market.

The bill introduced by Del. Webert, HB 1750, would allow the Authority to begin issuing licenses on January 1, 2024, under the stipulation that no cannabis sales occur prior to January 1, 2025. Webert told the committee that the bill would also ensure “seed to sale” tracking, set THC limits and impose a 12% tax rate on cannabis sales.

Greg Habeeb, a former Republican state delegate representing the Virginia Cannabis Association, cautioned the subcommittee on Tuesday, saying, “We have to do something.” Habeeb added that outlawing cannabis is not a likely option moving forward, though lawmakers will need to address public safety concerns.

Habeeb reportedly spoke in favor of both proposals, with enthusiasm around Hodges’ bill during the Tuesday hearing, telling the subcommittee that Hodges’ legislation “might be the only way” to move forward and pass a bill to begin shaping the state’s regulatory framework.

The subcommittee voted to lay Webert’s bill on the table, meaning that it is allowed to be revived later in the year, though it’s an improbable scenario. The panel also voted to lay Hodges’ bill on the table.

Virginia residents are able to gift cannabis to one another, grow it in their homes or purchase it from medical dispensaries with a license; however, there is otherwise no way for residents to legally obtain or purchase cannabis in the state.

It’s an interesting in-between that, legislators admit, can feel a bit confusing or even illogical.

“I think by and large most of the people would like to get it straight. We haven’t done it,” said Senate Majority Leader Dick Saslaw (D-Fairfax). “It’s weird that it’s legal to possess it but you can’t sell it.”

Virginia NORML Executive Director JM Pedini also spoke out to Virginia Mercury on the topic, warning that the legislature must either find a way to press forward on retail sales for adult use or cede control of cannabis, leaving the power around cannabis to unlicensed, unregulated operators.

“If public safety is an actual priority for either chamber, then they will approve legislation to begin sales at licensed dispensaries as soon as possible,” Pedini said.

House of Delegates Speaker Todd Gilbert (R-Shenandoah) told Virginia Mercury he was unsure how the General Assembly would handle the issue in the future. He said Democrats are to blame for the delays, given that they couldn’t agree on rules for the retail market when cannabis was legalized in 2021, and after they lost much of their policy making power in that year’s elections, the work was then left to the Republicans.

“They just legalized it and walked away and said, ‘Oh, we’ll come back and do that later.’ Which is just an absurd way to go about making public policy,” Gilbert said. “And here we are left with this mess.”

Gilbert added that he is concerned about rushing forward with a poorly thought-out bill.

One question surrounds social equity elements of the industry, ensuring that those most impacted by aggressive policing of drug laws have a fair chance of entering the industry over big companies already prepared to dominate the retail market. Another involves the ability for the state’s four licensed medical cannabis companies to begin “transitional” recreational sales as the state sets up its retail licensing processes.

Pedini also called out Gov. Glenn Youngkin (R), saying his lack of direction on the issue has created a “near-unmovable” obstacle for House Republicans. When asked in January whether he would sign a bill creating a retail market in Virginia, Youngkin dodged the question. Instead, he said that legislators are focused on ensuring the “enforcement and consumer protection laws are straightened,” in reference to hemp and delta-8 cannabis, along with mislabeled products and those that target children.

“While it’s reasonable to assume that he’s aware voters on both sides of the aisle overwhelmingly support legalization, his recent statements have left Virginians, including his supporters, scratching their heads.”