The Senate and House in Virginia recently approved marijuana resolutions that would legalize retail cannabis sales in the commonwealth. Both resolutions would establish legal, regulated cannabis sales starting 2025, though considerable differences remain in terms of licensing, timing, criminal penalties, social equity, taxes and whether growers would be allowed to grow marijuana outdoors.
The house measure’s sponsor, Delegate Paul Krizek, stated ahead of the second reading that the time had come for Virginia’s illegal marijuana market to have competition from tested, safe and taxed products. The possession, use and limited cultivation of marijuana by adults in Virginia is legal, following the approval of a bill led by Democrats in 2021.
However, the re-enactment of a regulatory framework for retail sales was delayed when Republicans gained control of the House and office of the governor. This vacuum allowed illegal stores to flourish in an effort to meet demand from consumers.
As approved by the House, HB 698 would permit existing medical cannabis operators, about 60 equity-focused microbusinesses, and five hemp businesses to open for retail sales in January 2025. This is earlier than stores would launch under the approved Senate measure.
Marijuana products would have a 9% tax imposed on them while outdoor growing would be prohibited. HB 698 was approved in a 52–48 vote following its third reading.
On the other hand, the approved Senate measure (SB 448) would impose a 17.5% tax on cannabis products. The tax is made up of a 3.5% local tax imposed by municipalities, a 12.5% state excise tax and a 1.125% sales tax that will be allocated to fund K-12 education.
This bill was sponsored by Senator Aaron R. Rouse.
Retailers would be allowed to open their businesses later next year after going through an application and licensing process. Outdoor growing would also be permitted for smaller licensed cultivators. However, larger growers would have to cultivate their plants indoors. A final vote on SB 448 is expected next week before the measure can be sent to the House of Delegates.
From the above, we can see that the Senate and House bills have significant differences despite all the revisions made thus far. It is expected that legislators will make further amendments before these measures can be forwarded to Governor Glenn Youngkin’s desk.
During the floor session, senators narrowly passed a separate cannabis-related resolution, SB 696. This resolution would permit individuals convicted of past marijuana crimes to be resentenced.
Multistate marijuana operators such as Cresco Labs Inc. (CSE: CL) (OTCQX: CRLBF) can only hope that the lawmakers reach a consensus that allows the residents of Virginia to access legally produced recreational cannabis products sooner rather than later.
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