Marijuana Moment: Virginia House And Senate Lawmakers Advance Marijuana Sales Legalization Bills Toward Governor’s Desk

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The march toward legalizing recreational marijuana sales in Virginia continues on, with the full House of Delegates and a Senate committee advancing a pair of companion bills to create a regulated adult-use cannabis market in the Commonwealth.

The House on Tuesday passed a Senate-approved cannabis sales bill on second reading, teeing it up for final passage in the chamber. Earlier in the day, a House companion measure moved through the Senate Finance and Appropriations Committee in a 10-5 vote, sending the measure to the floor for consideration.

Both chambers’ marijuana sales proposals are aimed at giving adults a legal means of buying cannabis, the possession and home cultivation of which was legalized in the state in 2021—though there are key differences between them.

The measures in both chambers—HB 642 and SB 542—were recently amended to stipulate that microbusiness licensees can cultivate, process or conduct retail sales at up to two locations instead of one, so long as they’re located within 10 miles of each other and operate under common ownership and control.

Lawmakers have also revised the legislation to clarify that current medical cannabis businesses would only be able to cultivate cannabis indoors, including in secure greenhouses with a total canopy cap of 70,000 square feet. The amendments also make it so they could not have any additional marijuana licenses beyond their medical permits with “dual-use privileges.”

Finally, the measures’ conversion fee structure was revised in a way that lets current medical marijuana businesses pay for the privilege to serve the adult-use market in three installments.

There are certain remaining major differences between the chambers’ bills that will still need to be addressed—related to the start date for legal sales and cannabis tax rates—before a final product can be delivered to the governor’s desk.

Here are the key details of the Virginia marijuana sales legalization legislation, SB 542 and HB 642:

• Adults would be able to purchase up to 2.5 ounces of marijuana in a single transaction, or up to an equivalent amount of other cannabis products as determined by regulators.
• The House bill sets the state date for legal sales as November 1, 2026, while the Senate measure would allow them to begin on January 1, 2027.
• The Senate bill would set an excise tax on cannabis products of 12.875 percent, in addition to a 1.125 percent state sales tax and a mandatory 3 percent local tax. The House measure would apply an excise tax of 6 percent as well as a 5.3 percent retail sales and use tax, while allowing municipalities to set a local tax of up to 3.5 percent.
• Under the House bill, the Virginia Cannabis Control Authority would oversee licensing and regulation of the new industry, while the Senate legislation tasks that to a new combined Alcoholic Beverage and Cannabis Control Authority.
• The House bill calls for revenue to be distributed to a new Cannabis Equity Reinvestment Fund (60 percent), early childhood education (10 percent), the Department of Behavioral & Developmental Health Services (25 percent) and public health initiatives (5 percent). The Senate proposal, meanwhile, would put 30 percent toward the equity reinvestment fund, 40 percent for early childhood eduction, 25 percent to the behavioral and developmental health services department and 5 percent to public health initiatives.
• Local governments could not opt out of allowing marijuana businesses to operate in their area.
• Delivery services would be allowed.
• Serving sizes would be capped at 10 milligrams THC, with no more than 100 mg THC per package.
• Existing medical cannabis operators could enter the adult-use market if they pay a licensing conversion fee that is set at $15 million in the Senate bill and $10 million in the House measure.
• Cannabis businesses would have to establish labor peace agreements with workers.
• A legislative commission would be directed to study adding on-site consumption licenses and microbusiness cannabis event permits that would allow licensees to conduct sales at venues like farmers markets or pop-up locations. It would also investigate the possibility of the Virginia Alcoholic Beverage Control Authority becoming involved in marijuana regulations and enforcement.

The Virginia House and Senate both took action on multiple marijuana bills on a key deadline last month—passing proposals to legalize cannabis sales, provide a pathway to resentencing for prior marijuana convictions and allow medical cannabis access in hospitals for seriously ill patients.

With respect to the Senate marijuana sales bill, members recently clashed in committee about amendments to the body’s version that would have added new penalties for illegal cannabis activity.

The amendments at issue from the Courts of Justice Committee included penalties for consumers who buy from unlicensed sources, the recriminalization of cannabis possession by people under 21 and making sales a class 1 misdemeanor for a first offense and a crime punishable by mandatory jail time for a second offense. As revised, the bill would have also raised the penalty for unlicensed cultivation to a felony punishable by up to five years in jail and made it a felony to transport with intent to distribute cannabis across state lines.

But the Finance and Appropriations Committee reversed the amendments last month amid pressure from a coalition of advocacy groups that sent a letter to senators saying they undermined the “intent” of the legislation and the “will of the people” by adding criminal penalties for certain cannabis-related activity.

Overall, both chambers’ commercial sales bills have largely aligned with recommendations released in December by the legislature’s Joint Commission to Oversee the Transition of the Commonwealth into a Cannabis Retail Market.

Meanwhile, certain GOP members have found themselves ideologically aligned with their Democratic colleagues throughout this legislative process, breaking with the majority of their caucus in support of creating a regulated marketplace for adults to purchase cannabis.

Since legalizing cannabis possession and home cultivation in 2021, Virginia lawmakers have worked to establish a commercial marijuana market—only to have those efforts consistently stalled under former Gov. Glenn Youngkin (R), who twice vetoed measures to enact it that were sent to his desk by the legislature.

Gov. Abigail Spanberger (D), for her part, supports legalizing adult-use marijuana sales.

Meanwhile, Virginia House and Senate lawmakers on Monday advanced a pair of companion bills, with amendments, that would provide a pathway to resentencing for people with prior marijuana convictions.

Members of the Senate and House Courts of Justice Committees on Monday approved substitute versions of the opposite chamber’s reform legislation, making certain revisions that set the stage for bicameral negotiations as the measures move forward in the legislative process.

The legislation as introduced in both chambers would create a process by which people who are incarcerated or on community supervision for certain felony offenses involving the possession, manufacture, selling or distribution of marijuana could receive an automatic hearing to consider modification of their sentences.

Separately last month, the Virginia House passed a bill to allow patients to use medical marijuana in hospitals. It would require healthcare facilities to establish policies “to address circumstances under which an eligible patient would be permitted to use medical cannabis.”

The Senate passed differing legislation concerning the use of medical cannabis in health care facilities last month.

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Meanwhile, the Virginia House this month approved a bill to protect the rights of parents who use marijuana in compliance with state law.

Under the proposal from Del. Nadarius Clark (D), possession of use of cannabis by a parent or guardian on its own “shall not serve as a basis to deem a child abused or neglected unless other facts establish that such possession or consumption causes or creates a risk of physical or mental injury to the child.”

“A person’s legal possession or consumption of substances authorized under [the state’s marijuana law] alone shall not serve as a basis to restrict custody or visitation unless other facts establish that such possession or consumption is not in the best interest of the child,” the text of the bill, HB 942, states.

Separately, the Virginia Department of Labor and Industry recently published a new outlining workplace protections for cannabis consumers.

Photo courtesy of Chris Wallis // Side Pocket Images.

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