Politics
Virginia Marijuana Commission Talks Taxes And Revenue As Lawmakers Again Consider Legalizing Recreational Sales
A Virginia cannabis commission held its second meeting focused on the future of marijuana in the commonwealth, with members taking input on tax and revenue options for cannabis sales as lawmakers again consider establishing a commercial market.
Convened as part of a resolution passed by the legislature earlier this year, the Joint Commission to Oversee the Transition of the Commonwealth into a Cannabis Retail Market is charged with gathering feedback and making recommendations on an array of policy matters around commercial marijuana sales.
Wednesday’s meeting comes almost two months after the commission first convened, with members discussing broad regulatory considerations and other issues related to THC potency, the hemp market and more.
Use and possession of marijuana has been legal in Virginia since 2022, but retail sales remain forbidden—a situation that’s helped fuel a multibillion-dollar illicit market. Despite efforts by Democrats in past years to legalize and regulate the retail system, Gov. Glenn Youngkin (R) has stood in the way of the reform, vetoing proposals passed by lawmakers during each of the last two sessions.
Youngkin, however, is term-limited and unable to run for re-election in November. The governor’s replacement is likely to decide whether regulated products will become available in the commonwealth in the next few years.
To that end, the commission’s work could prove more practical heading into the next session. And the 10-member panel—comprised of six House and four Senate lawmakers—took aim at future policies around the “economic aspects” of legalization during Wednesday’s meeting, as the chair, Del. Paul Krizek (D), said.
Andrea Jimenez, a policy specialist with the National Conference of State Legislatures (NCSL), was among four witnesses who gave the commission a presentation, highlighting the range of tax rates for adult-use cannabis in states across the country.
“One of the primary motivators of marijuana legalization is revenue, and data shows that cannabis revenues do tend to be strong early on when marijuana sales begin—but they tend to slow over time as the market becomes better established and as more states can continue to legalize marijuana,” she said. “And in recent years, a couple of states have reported a decrease in the price of marijuana, which, in turn, has affected revenue collections.”
Chelsea Higgs Wise, executive director of the advocacy group Marijuana Justice, also addressed the question of taxing cannabis and allocating revenue—emphasizing that “the promise that we left in 2021 [when cannabis possession and home cultivation was legalized] was that we’re going to continue to make sure that we build an industry [and] that we’re going to promote small Virginia businesses as well as social equity applicants.”
While there are estimates of significant revenue coming into the commonwealth when a legal sales system becomes operational, she also noted that legislation that has advanced in the past would allow localities to opt out of cannabis commerce via referendums, so any revenue estimates could be tempered depending on how many jurisdictions follow that path.
JM Pedini, representing NORML, also spoke at the meeting, saying the commission should consider streamlining the tax revenue allocation process by combining separate buckets that have been proposed and having the Cannabis Control Authority (CCA) receive 30 percent and give regulators “specific direction as to how they fund programs.”
Following the panel’s first hearing in June, Pedini stressed in a comment to Marijuana Moment the importance of voters electing a governor who’s open to cannabis reform. Regardless of what lawmakers put in a legal sales bill, an executive who opposes the reform could keep cannabis commerce illegal for years to come.
“The most important consideration for any Virginian interested in participating in the adult-use market—either as a consumer or a business—is their vote this November,” Pedini said. “If Virginians fail to elect a governor who has committed to signing an adult-use retail measure, then they will not again have the opportunity to legalize sales until 2030.”
Youngkin has also stood in the way of more incremental reforms. In May, for example, he vetoed a bill that would have allowed deliveries of medical marijuana directly to patients at locations other than their own homes. It would have also updated product labeling requirements so packaging would more clearly indicate THC and CBD levels.
In March, after the legislature passed the legislation, Youngkin recommended an amendment that would remove language to allow marijuana to be delivered to places other than a patient’s private residence. Lawmakers later declined to make that change, however, and sent the unamended bill back to the governor.
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Youngkin in March also vetoed a host of other drug reform proposals passed by lawmakers, including the legal sales bill and another to authorize the prescription of a synthetic form of psilocybin as soon as the federal government authorizes its use.
Beyond the legal sales and psilocybin bills, the governor also rejected a number of other cannabis-related reforms this session, including efforts to resentence people serving time for cannabis offenses and protect the parental rights of those who legally use the drug.
Youngkin agued in a veto statement that legalizing sales of adult-use marijuana “endangers Virginians’ health and safety.”
“States following this path have seen adverse effects on children’s and adolescents’ health and safety, increased gang activity and violent crime, significant deterioration in mental health, decreased road safety, and significant costs associated with retail marijuana that far exceed tax revenue,” the governor claimed. “It also does not eliminate the illegal black-market sale of cannabis, nor guarantee product safety.”
Even before the start of the current legislative session, Youngkin’s office had signaled it had no interest in the reform.
Asked by Virginia Public Media (VPM) late last year about the likelihood of a veto, Christian Martinez, a spokesperson for the Youngkin, told the outlet: “I think you can cite the fact that time and time again he has been very clear on that.”
Reform advocates are already watching to see where his possible replacements stand on legalization and other cannabis policy changes.
The two major party nominees for the position—Republican Lt. Gov. Winsome Earle-Sears and Democratic former U.S. Rep. Abigail Spanberger—have starkly different views on the reform.
Earle-Sears recently echoed Youngkin’s views, saying of legalization: “There’s no hope in that.”
She’s also said marijuana is a gateway drug and that she fired a previous employee for using it.
Spanberger, meanwhile, voiced support for a regulated retail market.
“We need a formalized, legal, emerging cannabis market,” she said. “We also need to make sure that [tax] revenues flow into Virginia and are used to strengthen our communities and public schools.”
Photo courtesy of Mike Latimer.
