A Virginia Senate subcommittee focused on marijuana policy met for a second time on Wednesday, agreeing to a set of amendments to a cannabis legalization bill that are expected to be formally adopted by a full committee on Friday.
The Senate Rehabilitation and Social Services Marijuana Subcommittee initially discussed the legislation a day earlier, on Tuesday, taking public testimony and debating issues such as which agency should regulate the legal cannabis program and whether local jurisdictions should have to opt in or out to allow marijuana businesses to operate.
At the most recent meeting, members reached several agreements on amendments in concept that will be taken up by the full panel. They also moved to refer the revised legislation to the Judiciary Committee and then the Finance Committee before it advances to the Senate floor.
The bill at hand was unveiled by Gov. Ralph Northam (D) last week and is being carried by top Senate and House leaders.
It 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.
One of the decisions the subcommittee made was to recommend that an independent agency be responsible for regulating the marijuana program, rather than the state’s existing alcohol control department as would be the case under the governor’s bill as introduced. That also means that the timeline for sales implementation would have to be pushed back to 2024 instead of 2023 to provide time to stand up a new regulatory body.
“The committee feels that an independent agency is the right solution,” Chairman Jeremey McPike (D) said, adding that “this line of business is much different than the current work of” the Virginia Alcoholic Beverage Control Authority.
The recommendation also calls for quarterly updates on the progress of regulatory implementation. If those show significant progress, legal sales could potentially come earlier than 2024.
The panel also narrowly agreed that the home cultivation option for adults should remain in the bill.
In terms of local control, members said that they would prefer for municipalities to have to opt out of allowing cannabis businesses in their areas if they didn’t want them, instead of being required to proactively opt in as is written in the current legislation. That recommendation comes in response 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.
There was also some discussion about social equity licensing policy, with the panel urging a tightening of eligibility requirements. While the current bill says a business must have 50 percent ownership by disadvantaged people, the panel recommended upping that to 66 percent, for example.
The subcommittee talked about co-location issues and advised that there should be language added that allows overlap in recreational marijuana, medical cannabis and hemp production and sales. The current proposal could effectively restrict companies to just one or another form of cannabis.
Deputy Secretary of Agriculture and Forestry Brad Copenhaver, who testified on behalf of the Northam administration, said they “don’t see any issues as long as the products are kept separate, especially on a cultivation facility.”
“We don’t see any issues with that,” he said, “as long as the products themselves can be separately labeled and identified” and “as long as we can track and trace that.”
Members agreed to the overall set of amendments in concept in a 4-3 vote.
Next, the bill will get a full Rehabilitation Committee vote on Friday, where members will formally consider the subcommittee’s amendments. Judiciary will get the legislation next and, in its jurisdiction, will likely take on provisions related to crimes and penalties. After that, Finance will look at components such as the proposed tax policy.
Meanwhile, a companion bill in the House of Delegates is expected to be introduced soon and will be considered by the chamber’s Courts of Justice Committee on Friday.
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).
This introduction of the bill comes 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 Tuesday, but he asked that it be “rolled in” to the governor’s proposal and that he be added as a chief sponsor. That request was approved by members.
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.