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420 with CNW — Virginia Assembly Committee Approves Cannabis Bill Permitting Sales

A recently amended measure, HB 698, advanced by a Virginia Assembly subcommittee, seeks to permit existing medical cannabis dispensaries and certain small businesses to commence recreational marijuana sales in January next year, with more retailers expected to be licensed by year-end.

A medical marijuana operator has to quickly establish six microbusinesses to capitalize on an early launch date. The present form of the law would provide $400,000 in funding to each of these microbusinesses. In turn, microbusiness licenses would require that at least two-thirds of the individuals directly controlling the enterprise meet certain social-equity requirements, with preference going to those who meet multiple requirements.

Delegate Paul Krizek, the subcommittee chair and the bill’s lead sponsor, noted that his proposal draws inspiration from Maryland’s approach to legal sales, including a gradual marketplace rollout. The bill is designed to ensure affordability through low taxes (9%), utilizing medical companies to address initial demand and implementing a robust social program to assist individuals most affected by cannabis criminalization.

Equity activists applauded the inclusion of prior cannabis misdemeanor convictions and people related to someone convicted (spouse, child, parent or sibling) as substantial additions to the qualifying requirements for microbusiness licenses. Additional criteria involve residence in historically underprivileged neighborhoods, school attendance in such areas, receiving Pell grants, or military veteran status.

The accelerator might be able to sustain 30 microbusinesses, given that Virginia currently has five medical cannabis providers. However, the measure would eventually allow more licenses for different marijuana-related activities.

Despite varied perspectives, there is general agreement that market control is necessary following the legalization of cannabis home cultivation, possession and use in 2021. Currently, legislators are trying to reach an agreement on a proposal regarding retail sales, despite the possibility of a veto from Governor Glenn Youngkin, who stated last month that he had no interest in legalizing Democratic-led sales bills.

When he assumed office, Gov. Youngkin stated that he was not opposed to permitting commercial sales in general. However, he noted that there were several Democratic measures, such as clauses requiring cannabis businesses to form labor unions, that he would not support.

Krizek’s amended measure is unique for allowing Virginia’s five existing medical cannabis companies to start recreational sales before new retailers receive licenses. While advocates argue that this speeds up the state’s legal marijuana sales, detractors warn that it would unfairly favor large out-of-state medical businesses over small and local enterprises.

Several advocacy organizations, such as Marijuana Justice and the Virginia chapter of NORML, are in support of the measure. Established cannabis companies such as Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) could also support the draft law because it would expedite access to licensed marijuana products instead of having customers taking chances with black-market products.

About CNW420

CNW420 spotlights the latest developments in the rapidly evolving cannabis industry through the release of an article each business day at 4:20 p.m. Eastern – a tribute to the time synonymous with cannabis culture. The concise, informative content serves as a gateway for investors interested in the legalized cannabis sector and provides updates on how regulatory developments may impact financial markets. If marijuana and the burgeoning industry surrounding it are on your radar, CNW420 is for you! Check back daily to stay up-to-date on the latest milestones in the fast -changing world of cannabis.

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