Virginia lawmakers go landmark payments to legalize marijuana

Virginia took a giant step towards becoming the 16th state in the nation to legalize a recreational marijuana market, and the first in the south, after the House of Delegates and Senate passed various legalization laws on Friday.

However, the differences in these bills will need to be balanced by a legislative committee for Virginia to reach the milestone.

Governor Ralph Northam supports legalization.

In their Friday vote, House legislators passed their bill at 55-42 while the Senate passed its draft at 23-15.

A big difference between the two calculations seems to be whether vertical integration would be allowed.

Both measures provide for a commercial recreational marijuana market to open on January 1, 2024, a year later than requested by the governor.

The bill also highlights licensing opportunities for small and minority-owned local businesses.

Unlike other newer states that use adults, the existing four vertically integrated medical marijuana operators would not be allowed to move into a recreational market first, according to Virginia Mercury, a nonprofit newspaper that covers state politics.

If Virginia legalized adult use, it would reflect how fast legalization is coming in the United States.

Two main factors seem to be at play:

  • A legalization domino effect along the east coast.
  • A struggle for new sources of income to offset the national budget problems caused by the economic impact of the coronavirus pandemic.

Adult marijuana made a clean appearance in the ballot box in November. Voters in Arizona, Montana, New Jersey, and South Dakota all supported recreational marijuana.

A delay between legalization and a market launch would give Virginia time to set up an independent agency, the Cannabis Control Authority, to oversee the market, and develop rules and regulations, according to lawmakers.

“Progress takes time,” said Senator Adam Ebbin, an Alexandria Democrat and sponsor of the Senate law, earlier this week.

“It takes time to get things right. And personally, I’d rather be able to get the votes for a responsibly regulated market for adult use in 2024 than have no billing evidence at all. “

The two bills broadly contain the following provisions, according to summaries and media reports from the Marijuana Policy Project:

  • Early distribution of licenses for social justice. Qualified applicants would have to hold at least 66% of the shares in the company. The recipients would have access to low-interest loans to overcome the hurdle of raising capital.
  • Legislation proposed by the governor would have allowed vertical integration, but the House legislature removed that provision. The House version HB2312 restricts businesses to one type of license to encourage more small and local businesses to participate in the industry.
  • Senate version SB1406 would allow businesses to integrate vertically, but would be charged a $ 1 million royalty, the proceeds of which would help fund social justice regulations.
  • While MMJ operators couldn’t move forward quickly, the Senate version would allow these operators to jointly locate medical pharmacies and adult stores.
  • The House version would leave licensing to the state, while the Senate would allow local governments to ban adult sales through a referendum.
  • Sales of adult marijuana products would be taxed at 21% on top of the standard state sales tax of 6%. The municipalities could charge an additional 3%.

Virginia medical marijuana operators had urged early entry into the adult market, arguing that they had spent tens of millions of dollars building operations in an industry that had just started last fall.

Only five vertically integrated MMJ licenses were issued, with each operator being granted a virtual monopoly in one of five areas of “healthcare”.

The four MMJ operators include three multi-state companies – Columbia Care in New York, Jushi Holdings in Florida, and Green Leaf Medical in Maryland – as well as a Virginia-based company called Dharma Pharmaceuticals.

A license is free after MedMen Enterprises of Los Angeles was forced to give up its approval.

The Marijuana Business Factbook predicts that MMJ pharmacy sales in Virginia will be between $ 9 million and $ 11 million in 2021.

Jeff Smith can be contacted at [email protected]

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