Existing medical cannabis operators in Virginia would have to pay a $10 million fee to convert to adult-use sales – and Black Virginians would be encouraged to enter the industry via a social-equity program – under the proposed regulatory frameworks state lawmakers are considering.
Virginia adult-use cannabis sales would begin as soon as November under a bill in the state House of Delegates, with a bill in the state Senate not launching the first adult-use cannabis market in the South until January 2027, as the Cardinal News reported.
Virginia legalized adult-use cannabis in 2021 but the launch of sales has been stuck in limbo since. Glenn Youngkin, the state’s former Republican governor, twice vetoed legislation that would have launched a marijuana market worth as much as $3 billion, as per one estimate.
But that’s set to change under Democratic Gov. Abigail Spanberger, who took office earlier this month. Former state Sen. Adam Ebbin, the author of past cannabis sales bills Youngkin vetoed, will join the Spanberger administration as a senior advisor to the state Cannabis Control Authority.
The launch date is the major difference between the competing House and Senate bills, both of which involve license caps and social-equity provisions.
How many cannabis retail licenses will be available in Virginia?
- Cannabis retail cap: The House bill caps the number of retail licenses at 350, according to WVTF.
- $10 million fee for MMJ conversion: Existing medical marijuana licenses, held mostly by major marijuana MSOs, would be required to pay a $10 million fee to transition into the adult-use market.
New entrants to the market would have to meet one of seven criteria. Special consideration will be given to applicants with marijuana offenses on their criminal records, according to Cardinal News.
There are currently five vertically integrated medical cannabis permits in the state. An affiliate of Millstreet Credit Fund, a Boston-based hedge fund, announced its intention to purchase one of the permits for $130 million.
The other four are owned by:
- Former creditors of Miami-based MSO Ayr Wellness, which had yet to open a dispensary and sold off its assets in a fall foreclosure sale.
- Boca Raton, Florida-based Jushi Holdings
- Chicago-based Green Thumb Industries
- Chicago-based Verano Holdings Corp.
Cannabis cultivation limits, delivery
- Cultivation limits: The bills limits cultivation canopies.
- Delivery legal: The bills allow for home delivery.
- Local control: Localities are not permitted to ban commercial cannabis activity outright.
Taxation and revenue allocation
- Tax structure: The proposal sets an 8% state tax on adult-use cannabis sales, with local taxes of up to 3.5%.
- Revenue reallocation: Income from cannabis sales would be reallocated, with reduced funding for pre-kindergarten programs for at-risk 3- and 4-year-olds.
- Increased possession limits: Adults 21 and older would be allowed to possess up to 2.5 ounces of cannabis, an increase from the current limit of 1 ounce.
Does Virginia medical marijuana include social equity?
- Social equity focus: The proposal includes measures to prioritize equity in licensing, particularly from historically disadvantaged regions.