Last week, the Virginia Rehabilitation and Social Services Senate Committee passed a proposal to legalize commercial cannabis sales by a 10 to 5 vote. The bill, SB 448, introduced by Senator Aaron Rouse, aims to initiate the licensing of recreational cannabis businesses starting this July. However, retail licenses would not be accessible until next year.
Subject to voter approval, the measure gives local governments the authority to potentially outlaw commercial marijuana operations.
SB 448 will move on to the Senate’s justice committee next week. Subsequently, it will undergo evaluation in the finance committee, where a crucial deadline of Feb. 5, 2024, looms to keep it in contention. There’s also a crossover date of Feb. 13, 2024, that requires the senate to forward the bill to the house, which is also considering a marijuana sales measure of its own.
During a senate marijuana subcommittee hearing, Rouse’s bill prevailed over an opposing proposal from Senator Adam Ebbin, SB 423. Ebbin’s proposal, which aimed to accelerate adult-use marijuana sales through already-existing dispensaries, was rejected due to worries about possible market dominance by well-established companies.
SB 448 outlines licensing for five business categories, including testing laboratories, cultivators, retailers, manufacturers and transporters. The entities would fall under the regulatory purview of the state’s existing CCA.
Legislators have refrained from debating the bill’s tax components or criminal justice legislation effects thus far, delegating those discussions to the senate’s fiscal and judicial committees.
One amendment suggested during last week’s session is a definition of cultivator size measurement. Cannabis advocates suggest replacing the bill’s maximum of 2,000 plants for the largest cultivators with a cap on canopy square area. However, Rouse objected to this change, claiming that plant counts are simpler to monitor and give small companies greater flexibility.
The subcommittee meeting included a significant amount of debate on social-justice provisions, which emphasized priority licensing for veterans, hemp producers and people from low-income and over-policed communities. Changes that were covered in previous subcommittee sessions included doing away with a clause that prohibited legislators from working in the marijuana industry and forbidding law enforcement from being involved in the business. Additional changes addressed issues such as fairness standards for veterans, testing licensing restrictions to prevent lab shopping and concerns for those impacted by the drug war.
Additionally, the proposal addresses the qualifying standards for marijuana company licenses, prohibiting those with felonies or other convictions involving moral conduct from applying for seven years. There were requests to shorten this exclusion period during the subcommittee meeting.
The legislation arrives against the backdrop of Virginia’s existing legal framework, where recreational cannabis possession, use and personal cultivation are already permitted. Originally a Democrat-controlled legislation from 2021, the framework ran into difficulties due to GOP control over the governor’s office and the house later in the year. The unlicensed market has since expanded as a result of the lack of a newly adopted regulatory framework.
Even if Democrats took back control of both chambers of Congress in November, it is still difficult to pass laws on marijuana sales. There are challenges in reaching a consensus among Democrats and possible resistance from Virginia Governor Glenn Youngkin. Gov. Youngkin has voiced his distaste for cannabis reform and highlighted particular issues, such as labor union regulations for cannabis-related enterprises. Although he first seemed receptive to the notion of commercial sales, more subsequent remarks appear to indicate a change in perspective.
The entire cannabis industry, including sector players such as SNDL Inc. (NASDAQ: SNDL), hope that the launch of adult-use cannabis sales in Virginia happens on schedule so that the residents who aspire to consume this substance can find legal sources to access it.
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