Federal officials would be blocked from punishing banks for working with marijuana businesses under an annual spending bill released by congressional Democratic leaders on Sunday.
The legislation, which is set to be considered by a House subcommittee on Monday, would also remove a longstanding rider that prevents the city of Washington, D.C. from spending its own money to legalize and regulate recreational cannabis sales.
Bill Protects Banks That Work With Marijuana Businesses
Although a growing numbers of states are moving to legalize and regulate marijuana—with Illinois lawmakers becoming the latest to pass a bill ending cannabis prohibition on Friday—many banks remain reluctant to work with licensed businesses in the industry out of fear of being subject to ongoing federal penalties.
Those hesitations could be at least partially allayed by the new House bill, which includes language barring federal regulators from punishing financial services providers for maintaining accounts for state-legal cannabis businesses:
SEC. 633. None of the funds made available in this Act may be used to penalize a financial institution solely because the institution provides financial services to an entity that is a manufacturer, a producer, or a person that participates in any business or organized activity that involves handling marijuana, marijuana products, or marijuana proceeds, and engages in such activity pursuant to a law established by a State, political subdivision of a State, or Indian Tribe: Provided, That the term ‘‘State’’ means each of the several States, the District of Columbia, and any territory or possession of the United States.
The provision only applies to spending legislation covering the Treasury Department, however, and thus would not shield banks from any enforcement activities carried out by the Justice Department, which is funded under a separate bill. It is also attached to the annual appropriations process, meaning it would have to be proactively renewed year after year if it is enacted.
Meanwhile, though, a more comprehensive and permanent proposal to shield banks from being punished for serving cannabis businesses is advancing in Congress.
In March, the House Financial Services Committee approved the bill, known as the Secure And Fair Enforcement (SAFE) Banking Act, in a bipartisan vote of 45 to 15. Advocates expect that House Democratic leadership will bring the legislation, which currently has 191 cosponsors—nearly half of the chamber’s membership—to the floor within the next several weeks.
An identical proposal in the Senate has 30 lawmakers—almost a third of the body’s members—signed on. While Banking Committee Chairman Mike Crapo (R) has so far refused to commit to bring the bill up for a hearing in his panel, pressure is mounting.
Last month, the Congressional Budget Office issued a report projecting that the bill would generate an increase in deposits in banks and credit unions, and would ultimately lead to savings for the federal government after initial implementation expenses are accounted for.
And a handful of other Republican senators, including at least one who is a member of Crapo’s committee, have lobbied him to give the cannabis banking bill due consideration.
In 2014, the House of Representatives approved a floor amendment similar to the provision currently included in the new spending bill, but it was not enacted into law. The full House Appropriations Committee defeated a cannabis banking rider last year under Republican control, so its inclusion in the base subcommittee legislation as introduced by Democrats marks a significant shift.
“The provision takes another step to protect financial institutions who are providing services to cannabis-related legitimate businesses,” Rep. Ed Perlmutter (D-CO), chief sponsor of the standalone cannabis banking bill, said of the new appropriations rider. “I look forward to the House passing the SAFE Banking Act soon so we can fully address the issue and get this cash off the streets.”
This provision takes another step to protect financial institutions who are providing services to legitimate marijuana businesses. I look forward to the House passing the #SAFEBankingAct soon so we can fully address the issue & get cash off the streets.https://t.co/HDp9DQoaol
— Rep. Ed Perlmutter (@RepPerlmutter) June 3, 2019
Legalization advocates agreed that the spending bill language was a good sign but that the broader bill’s passage is still needed.
“The inclusion of cannabis banking reform language in the Appropriations bill is indicative of the level of support this issue has in Congress,” Morgan Fox, medial relations director for the National Cannabis Industry Association, said, “If passed, this would only be a temporary fix and should not be viewed as a substitute for the SAFE Banking Act, but could provide the cannabis and banking industries with a much-needed reprieve while stand-alone legislation gains more support in the Senate.”
D.C. Could Finally Spend Its Own Money To Legalize Cannabis Sales
The draft House appropriations bill also removes a provision that for years has blocked the city government in the nation’s capital from spending its own locally raised tax dollars to legalize and regulate the production and sales of marijuana.
Washington, D.C. voters approved a ballot measure in 2014 that allows low-level possession and home cultivation of cannabis, but consumers who are not medical marijuana patients have no legal way to purchase the drug. That’s because Congress has repeatedly enacted an appropriations rider pushed by Rep. Andy Harris (R-MD) that stands in the way.
Here’s how the anti-marijuana rider appeared in last year’s version of the spending legislation:
Sec. 809. (a) None of the Federal funds contained in this Act may be used to enact or carry out any law, rule, or regulation to legalize or otherwise reduce penalties associated with the possession, use, or distribution of any schedule I substance under the Controlled Substances Act (21 U.S.C. 801 et seq.) or any tetrahydrocannabinols derivative.
(b) No funds available for obligation or expenditure by the District of Columbia government under any authority may be used to enact any law, rule, or regulation to legalize or otherwise reduce penalties associated with the possession, use, or distribution of any schedule I substance under the Controlled Substances Act (21 U.S.C. 801 et seq.) or any tetrahydrocannabinols derivative for recreational purposes.
In addition to completely deleting the language standing in the way of D.C. using local money to pay for marijuana legalization, the legislation as introduced also cuts out the provision blocking the use of federal funds to lower cannabis penalties.
Last month, District of Columbia Mayor Muriel Bowser (D) referred a marijuana legalization bill to councilmembers in anticipation of Congress removing the ban under the newly Democratic-controlled House of Representatives. She cheered the new congressional legislation in a tweet on Sunday.
Illinois just approved legal sales of #marijuana for adults
Now, the @AppropsDems have a bill to remove the reprehensible rider so that we will be able to legalize/regulate its sale
— Muriel Bowser (@MurielBowser) June 3, 2019
The spending proposal, as introduced by the House Appropriations Subcommittee on Financial Services and General Government, if approved by that panel, would next head to the full Appropriations Committee and then to the House floor. It could be amended at either stage and will later be merged with parallel legislation in the Republican-controlled Senate, meaning that it is far from certain that the marijuana policy implications in the initial House draft will be enacted into law as currently drafted.
Still, their inclusion in the base bill on the House side bodes well for legalization advocates, as the Senate Appropriations Committee has historically been more favorable to cannabis amendments—even under GOP control—than its House counterpart has, although it did block consideration of a banking-related provision last year.
And while the Senate panel issued initial versions of the spending legislation free of D.C.-related marijuana riders in years past, in 2018 it included the ban under new subcommittee chairman Sen. James Lankford (R-OK), who opposes cannabis reform.
The pending appropriations bill covers Fiscal Year 2020, which begins on October 1.
Washington Lawmakers Approve Marijuana Homegrow Bill In Committee
A bill to allow marijuana homegrow in Washington State cleared its first legislative hurdle Friday morning, passing out of the House Commerce and Gaming Committee on a 7–2 vote with a “do pass” recommendation.
Washington voters approved a cannabis legalization initiative in 2012, and retail sales have been ongoing since mid-2014. Cultivating the plant for personal use, however, remains a felony.
“Washington was one of the first states to legalize, with understandable trepidation,” Rep. Shelly Kloba (D), the lead sponsor of HB 1019 and the chair of the House committee, said at Friday’s meeting. Homegrow, she said, “is one area where we’ve taken a more cautious approach and let other states test the waters.”
Of all other states that have begun legal cannabis sales in the years since Washington legalized, only one—Illinois—has outlawed homegrow. But in Illinois, advocates in Washington have pointed out, the offense is a civil infraction rather than felony crime.
Washington’s homegrow bill would allow adults to cultivate up to six cannabis plants at home and keep the marijuana those plants produce. Plants and containers of more than one ounce of cannabis would need to be labeled with the adult’s name, birthdate and address. Households with multiple adults could grow no more than 15 total plants.
While adults could give small amounts of homegrown cannabis to one another, unlicensed sales would remain illegal.
Plants would also need to be out of public view and unable to be “readily smelled” outside of the property. Growers who violate those limits would be subject to a civil infraction that carries a maximum $50 fine. Landlords, meanwhile, could decide whether or not to allow rental tenants to grow cannabis on the property.
The limits on plants being seen or readily smelled by the public, Kloba said, “protects both the grower and the neighbors” by avoiding both possible theft of plants—a concern some have raised about homegrow—as well as nuisance odor from nearby properties.
Opponents of the bill, including the Washington Association of Police Chiefs and Sheriffs, have complained the homegrow limits would be difficult to enforce. A representative of the group noted at a hearing last week that the bill would prevent police from entering a property unless they first obtained a warrant.
Rep. Eric Robertson (R), one of two lawmakers who voted against the bill Friday, said he was concerned that HB 1019 leaves enforcement to police agencies rather than the state Liquor and Cannabis Board (LCB), which regulates licensed cannabis businesses in the state. He described that provision as a “fatal flaw in the bill because there won’t be any reasonable or informed way to investigate this stuff without a huge impact to our cities.”
Kloba replied that LCB has authority over the state’s commercial cannabis system, “and this is clearly outside of it.”
The bill has support from numerous advocacy groups, including state and local drug reform advocates and the Washington Build Back Black Alliance (WBBBA), a group of nonprofit and business leaders lobbying on behalf of the state’s Black communities.
In a letter to lawmakers sent this week, Paula Sardinas of WBBBA noted that 97 percent of the state’s legal cannabis industry remains white-owned. “Assuming an expansion into homegrown would produce more [illicit] activity represents both systematic prejudice and implicit bias,” Sardinas wrote. “This very good bill meets the basic tests of both equity and equality.”
Lawmakers made a single amendment to HB 1019 on Friday before advancing the bill, adding changes meant to harmonize the state’s existing civil forfeiture law with the bill’s proposed homegrow limits. Existing law, for example, allows forfeitures when someone engaged in illegal commercial cannabis activity possesses five or more marijuana plants. The amendment raises that cap to 16 plants and slightly increases the amount of harvested cannabis a person can possess.
Kloba said the amendment, which the committee adopted Friday without objection, is meant “so that we don’t inadvertently allow people to do homegrow and then they get in trouble for doing so.”
Homegrow also won a small victory in Virginia on Friday as a state Senate committee voted to advance a bill to legalize marijuana in that state. Before approving the bill, lawmakers defeated a proposed amendment that would have outlawed home cultivation.
Jenn Michelle Pedini, executive director of Virginia NORML, told Marijuana Moment the group “is pleased that cooler heads prevailed, defeating an absurd motion to remove personal cultivation from the bill.”
Meanwhile, in Washington, the House Commerce and Gaming committee also heard testimony Friday on a separate bill, HB 1210, that would update state law to replace references to “marijuana” with the word “cannabis.”
“The word ‘marijuana’ is a reminder of the history of racism and persecution,” argued the bill’s lead sponsor, Rep. Melanie Morgan (D), while “cannabis” comes from the plant’s scientific name. “I ask for this committee’s support in removing the racist stigma from communities of color.”
Chris Thompson, director of legislative relations for LCB, said the regulatory agency supports the legislation but would like to see a “friendly amendment” that would direct regulators to make the change on their side, too. Such direction would allow LCB to expedite agency rulemaking.
“If you were to make a very long bill just maybe one paragraph longer and direct our agency to do that with our rules,” Thompson told lawmakers, “then that would help us make this change across the board in one fell swoop.”
Arizona Begins Recreational Marijuana Sales, Just Weeks After Voters Approve Legalization
Arizona marijuana sales for the adult-use market officially began on Friday after state officials began notifying retail business license applicants that they’d been approved.
The launch comes just weeks after voters in the state overwhelmingly passed a cannabis legalization initiative during November’s election. This marks the fastest transition from voter-approval to sales implementation of any state that has legalized marijuana to date.
Under the measure, regulators were required to quickly develop rules for the market. Industry stakeholders say they’ve had productive conversations with the Department of Health Services to create those guidelines over the past few weeks.
The department released two draft versions of its proposed regulations and then, earlier this month, began accepting applications for recreational business licenses. This first round of approvals is for existing medical cannabis dispensaries that have already gone through the state’s prior licensing process.
“ADHS has received 79 applications since the application period began early Wednesday,” the department said in a press release on Friday. “Six of those applications remain under review,” meaning that 73 facilities can now begin adult-use cannabis sales. The full list of those stores is at the bottom of this story.
— Justin Lum (@jlumfox10) January 22, 2021
Those who aren’t currently operating a medical marijuana shops can still apply for an adult-use license during this first round if they plan to operate in a county with two or fewer existing dispensaries. Applications for those who aren’t eligible in this phase will be open soon and are expected to be approved starting in the spring.
Samuel Richard, executive director of the Arizona Dispensaries Association, told Marijuana Moment that the “dedicated focus and professionalism of our regulators have really played out here in an incredible way.”
“We had overwhelming support in November—a three to two margin, 60-40 percent. We got over the finish line,” he said. “It’s great to see that our regulators responded to that overwhelming support by working as fast as they can to get the infrastructure in place to allow the two million Arizonans that voted ‘yes’ for Prop 207 to start to enjoy the benefits of legal, adult-use cannabis.”
Recreational marijuana sales are now legal in Arizona. Here is the scene at Harvest in Scottsdale that started selling recreational at around noon today. pic.twitter.com/20RW76nzij
— David Wallace (@DavidWallce) January 22, 2021
Legalization advocates are cheering the state for its expediency in getting the recreational marijuana market off the ground.
Matthew Schweich, deputy director at the Marijuana Policy Project, told Marijuana Moment that it is “encouraging to see Arizona move forward with implementation of the legalization policy approved by voters in November.”
“By avoiding unnecessary delays, Arizona will accelerate the timeline for job creation, business investment, and new tax revenue,” he said.
“I commend state officials for prioritizing the implementation of Prop. 207 and ensuring that Arizona adults have safe and convenient access to affordable marijuana in a timely manner,” NORML State Policies Coordinator Carly Wolf, told Marijuana Moment. “Voters were crystal clear on their mandate at the ballot box: end the failed policy of criminalization and replace it with a legal pragmatic regulatory framework as soon as possible.”
“It’s time to stop ceding control and revenue of the marijuana market to unregulated and untaxed enterprises in order to eliminate the risks associated with an illicit market,” she said.
The rules for the adult-use market took effect on January 15. They cover licensing fees, the timeline for approvals, the structure of the regulatory body, product labeling, public safety protocols and more. Many of the changes from prior draft regulations were technical, but there was one notable change concerning credentialing for cannabis workers.
Rather than being credentialed for one specific facility, the worker registration was expanded so that they could be certified to be employed at any cannabis operation in the industry.
While these rules are in place for the newly approved retailers, Richard said regulators have made clear their intent to continue to work with stakeholders and continue to build upon their rules to ensure the market’s success.
A line for has already formed here at @HarvestHOC on Grant. They were approved for a recreational license today by AZDHS and have already started selling. @KOLDNews pic.twitter.com/jZMuGiP1Jg
— Karly Tinsley (@ktinsleynews) January 22, 2021
Under the state’s new legalization law, adults will be able to possess up to an ounce of marijuana at a time and cultivate up to six plants for personal use.
The measure also contains several provisions aimed at addressing the harms of prohibition such as allowing individuals with prior marijuana convictions to petition the courts for expungements and establishing a social equity ownership program.
Cannabis sales will be taxed at 16 percent. Tax revenue will cover implementation costs and then be divided among funds for community colleges, infrastructure, a justice reinvestment and public services such as police and firefighters.
That revenue could also help the Arizona’s economic recovery amid the coronavirus pandemic, Richard said.
“At the time where folks are still struggling to recover across the country in terms of state budgets, we look forward to being a critical piece” of that recovery, he said.
Arizona’s quick response to voter approval of the reform initiative stands in stark contrast to New Jersey, where voters also approved a legalization referendum in November.
While regulations have been developed and retail sales are launching in Arizona, enabling legislation has faced numerous delays in New Jersey as lawmakers and the governor continue to hash out differences in their preferred regulatory approach.
That said, New Jersey Gov. Phil Murphy (D) said during his State of the State address last week that “we are on the verge of passing an innovative and groundbreaking set of laws to reform our historically unjust approach to marijuana and cannabis.” But the exact timeline to pass an implementation bill is yet to be determined.
See the full list of medical cannabis dispensaries authorized to sell recreational marijuana below:
|Facility Legal Name||County||City|
|Natural Relief Clinic Inc||Cochise||Bisbee|
|Desertview Wellness & Healing Solutions, LLC||Coconino||Flagstaff|
|Arizona Natures Wellness||Coconino||Sedona|
|Desert Medical Campus||Gila||Payson|
|High Desert Healing Llc||Maricopa||Avondale|
|Non Profit Patient Center Inc||Maricopa||Cave Creek|
|Azgm 3, Inc||Maricopa||Chandler|
|Border Health, Inc||Maricopa||Chandler|
|Total Health & Wellness Inc||Maricopa||Chandler|
|Total Health & Wellness Inc||Maricopa||Chandler|
|Arizona Cannabis Society Inc.||Maricopa||El Mirage|
|Fort Mountain Consulting, Llc||Maricopa||El Mirage|
|Absolute Health Care Inc||Maricopa||Gilbert|
|Ocotillo Vista, Inc.||Maricopa||Glendale|
|Pp Wellness Center||Maricopa||Glendale|
|Whoa Qc Inc||Maricopa||Glendale|
|Nature Med Inc||Maricopa||Guadalupe|
|4245 Investments Llc||Maricopa||Mesa|
|Arizona Wellness Collective 3, Inc||Maricopa||Mesa|
|Buds & Roses, Inc||Maricopa||Mesa|
|Sea Of Green Llc||Maricopa||Mesa|
|The Giving Tree Wellness Center Of Mesa Inc||Maricopa||Mesa|
|The Healing Center Farmacy Llc||Maricopa||Mesa|
|Valley Healing Group Inc||Maricopa||Mesa|
|Vending Logistics Llc||Maricopa||Mesa|
|Pinal County Wellness Center||Maricopa||Peoria|
|Az Compassionate Care Inc||Maricopa||Phoenix|
|Catalina Hills Botanical Care Inc||Maricopa||Phoenix|
|Devine Desert Healing Inc||Maricopa||Phoenix|
|Fort Consulting, Llc||Maricopa||Phoenix|
|Greens Goddess Products, Inc||Maricopa||Phoenix|
|Healing Healthcare 3 Inc||Maricopa||Phoenix|
|Herbal Wellness Center Inc||Maricopa||Phoenix|
|Mohave Valley Consulting, Llc||Maricopa||Phoenix|
|Natural Herbal Remedies Inc||Maricopa||Phoenix|
|Natural Relief Clinic Inc||Maricopa||Phoenix|
|Nature’s Healing Center Inc||Maricopa||Phoenix|
|Nature’s Healing Center Inc||Maricopa||Phoenix|
|Organica Patient Group Inc||Maricopa||Phoenix|
|Phytotherapeutics Of Tucson||Maricopa||Phoenix|
|Rjk Ventures, Inc.||Maricopa||Phoenix|
|The Giving Tree Wellness Center Of North Phoenix Inc||Maricopa||Phoenix|
|The Kind Relief Inc||Maricopa||Queen Creek|
|Csi Solutions Llc||Maricopa||Scottsdale|
|Eba Holdings Inc.||Maricopa||Scottsdale|
|All Greens Inc||Maricopa||Sun City|
|East Valley Patient Wellness Group Inc||Maricopa||Sun City|
|Holistic Patient Wellness Group||Maricopa||Tempe|
|Salubrious Wellness Clinic Inc||Maricopa||Tempe|
|Kannaboost Technology Inc||Maricopa||Tempe|
|K Group Partners Llc||Maricopa||Youngtown|
|Sweet 5, Llc||Maricopa||Youngtown|
|Verde Dispensary Inc||Mohave||Kingman|
|Abedon Saiz Llc||Mohave||Lake Havasu City|
|Fwa Inc||Mohave||Lake Havasu City|
|Arizona Golden Leaf Wellness, Llc||Pima||Marana|
|Medmar Tanque Verde Llc||Pima||Tucson|
|Patient Care Center 301, Inc.||Pima||Tucson|
|Rainbow Collective Inc||Pima||Tucson|
|Nature’s Wonder Inc||Pinal||Apache Junction|
|Svaccha, Llc||Pinal||Apache Junction|
|Medical Pain Relief Inc||Pinal||Casa Grande|
|Sherri Dunn, Llc||Yavapai||Cottonwood|
|203 Organix, Llc||Yavapai||Prescott|
Virginia Marijuana Legalization Bill Approved By Senate Committee, With Home Cultivation Provisions Intact
A Virginia Senate committee on Friday approved a bill to legalize marijuana in the Commonwealth, bringing the proposal one step closer to a full floor vote. Before advancing the legislation to another panel, lawmakers defeated a proposal to remove home cultivation rights for cannabis.
The Senate Rehabilitation and Social Services Committee approved the legislation in a 8-7 vote. Members also accepted a series of recommended amendments from a newly formed subcommittee that’s singularly focused on marijuana policy and that held two hearings on the bill earlier this week.
The legislation, which was unveiled by Gov. Ralph Northam (D) last week and is being carried by top Senate and House leaders, would create a system of regulated and taxed marijuana sales and production, and allow adults 21 and older to purchase and possess up to one ounce of cannabis and cultivate up to four plants for personal use, two of which could be mature.
During Friday’s hearing, the panel discussed and approved the subcommittee proposals. That includes an amendment to establish an independent agency to regulate the marijuana market, rather than have the state’s existing alcohol division handle it as would be the case under the governor’s original proposal. Because of the time it will take to set up that agency, the implementation timeline will be pushed back to 2024 instead of 2023 unless the General Assembly moves to expedite the process in the meantime.
Members also agreed to keep a home grow option for adult consumers, a significant win for reform advocates who argue it will provide a needed access point, particularly to low-income people.
There were two votes on a proposal to remove the personal cultivation provisions; the first was narrowly defeated 8-7 and the second was more soundly rejected 10-5.
“NORML is pleased that cooler heads prevailed, defeating an absurd motion to remove personal cultivation from the bill. Virginians have been very outspoken in their support for this priority, whether it be for medical or adult-use, and the legislature should heed the demands of their constituents,” Jenn Michelle Pedini, executive director of Virginia NORML, told Marijuana Moment. “Without the ability to cultivate for personal use, many Virginians will be left without any reasonable measure of access to safe cannabis products in their area.”
The panel also added safety awareness and best practices guidance provisions for homegrow.
“We applaud the subcommittee for smartly including language to promulgate safety awareness and best practices for personal cultivation, and to require that reasonable steps be taken to secure plants from underage access,” Pedini, who also serves as NORML’s national development director, said.
Lawmakers also voted in favor of an amendment to revise the legislation so that local jurisdictions would have to opt out of allowing cannabis businesses to operate in their areas, instead of opt in as it was initially drafted.
The rationale for that decision came down to a recent policy change in Virginia that no longer allows for “dry” counties and instead requires jurisdictions to opt out of allowing alcohol businesses via referendum.
The full committee further accepted a change to tighten eligibility requirements in social equity licensing policy. The original bill stipulated that a business must have 50 percent ownership by disadvantaged people, but members approved an amendment upping that to 66 percent.
Members further accepted proposals to strengthen public education campaigns on substance misuse and to allow for the integration of medical cannabis, adult-use marijuana and hemp businesses, rather than require them to operate separately.
Sen. Jeremey McPike (D), chair of the panel’s marijuana subcommittee, said in closing remarks that he appreciates the how members collaborated on this proposal, saying “even though there were folks that oppose the overall idea, I think in a bipartisan way, members of the subcommittee really looked to try to improve the various components and parts in a very collaborative manner.”
“This still is going to go through several committees and several more opportunities to better refine this down” he said.
With this vote, the legislation now heads to the Judiciary Committee, which, in its jurisdiction, will take on provisions related to crimes and penalties. After that, the Finance Committee will look at components such as the proposed tax policy before the bill heads to the full Senate floor.
Meanwhile, the House of Delegates is expected to soon take up a companion version of the legislation.
At least one senator took issue with the expediency of this legislative process, complaining about the time he received to review the newly revised lengthy bill ahead of Friday’s meeting.
How in the hell am I supposed to throughly read a 515 page marijuana legalization bill dropped in front of me @ 8:20 am for a committee that gaveled in at 8:00 rehab and social services committee and want me to vote on it. Really? Seriously really?
— Bryce Reeves (@ReevesVA) January 22, 2021
The legislation’s provisions as introduced have been informed by two official state studies on legalization that were recently conducted by a legislative commission and a separate working group comprised of four Virginia cabinet secretaries and other officials, both of which looked at how to effectively implement legalization and submitted recommendations to the governor’s office late last year.
Those studies were required under a marijuana decriminalization bill that was approved last year.
Many of those recommendations have been incorporated into the new legislation, including provisions to promote social equity in the cannabis market. Notably, it would also apportion almost half of the tax revenue the state collects from marijuana sales to funding pre-kindergarten education—a policy championed by First Lady Pamela Northam.
A new 21 percent tax would be imposed on cannabis sales, and local jurisdictions that allow marijuana businesses to operate could levy an additional three percent tax. Existing state sales taxes would also apply on purchases, for a total potential 30 percent tax rate.
Revenue from the new state tax would go toward funding pre-k education (40 percent), a Cannabis Equity Reinvestment Fund (30 percent), substance misuse and treatment programs (25 percent) and public health initiatives (five percent).
Advocates have broadly welcomed the legislature’s quick move to enact legalization, though some have expressed frustration about the limited scope of its social equity provisions.
We propose strongly that Virginia allocates 70% (not 30% as currently written in the bill) of tax revenues to the Cannabis Equity Reinvestment Fund.
— ACLU of Virginia (@ACLUVA) January 22, 2021
Our Legislative Director Ashna Khanna on SB 1406 to legalize marijuana:
1. There's a loophole in social equity license eligibility that would not foster ownership by people most harmed by prohibition.
2. Funding & oversight for social equity must be built into the new industry. pic.twitter.com/D8wxcNHoB6
— ACLU of Virginia (@ACLUVA) January 22, 2021
This introduction of the bill came one month after the governor included provisions to lay the groundwork for cannabis legalization in a budget proposal that also calls for millions of dollars to support expungements. Northam had campaigned on merely decriminalizing possession, but he publicly backed broader legalization of marijuana for adult use in November.
Northam said during his State of the Commonwealth address last week that cannabis prohibition was deliberately enacted as a means to discriminate against people of color.
Separate legislation to legalize cannabis for adult use was filed by Del. Steve Heretick (D) earlier this month. A companion version of that bill, sponsored by Sen. Joe Morrisey (D), was also up for consideration by the Senate panel on Friday, but that was formally incorporated into the governor’s proposal and he was added as a chief sponsor.
Meanwhile, legislation to stop police from searching people or seizing property based solely on the smell of marijuana in Virginia is set to take effect after lawmakers adopted recommended changes from the governor in October.
Also during the recently concluded special session, Northam signed another bill that will allow people issued summonses for cannabis offenses under the state’s new decriminalization law to prepay their civil penalty rather than having show up in court.
Read the amended marijuana legalization bill below:
Photo courtesy of Brian Shamblen.