Last year, voters in Montana, Arizona, New Jersey, South Dakota and Mississippi approved ballot measures to legalize marijuana in their states. It appears Virginia will continue this state legalization trend in 2021. In a historic vote last Friday, February 5, 2021, the Virginia General Assembly passed two bills (one in the House and one in the Senate) that would legalize the recreational use of marijuana in the Commonwealth. There are some key differences in the two bills that will need to be reconciled before heading to Governor Ralph Northam's desk before signature, who has indicated his support for such legislation. If signed into law, the legislation would make Virginia the 16th state in the country to legalize recreational use. Below is a summary of some of the key similarities and differences between the two bills.
House Bill 2312 and Senate Bill 1406: Key Similarities
- Licensing
- Creates the Virginia Cannabis Control Authority (the Authority). The Authority would consist of the Virginia Cannabis Board of Directors (the Board), the Chief Executive Officer, and its agents and employees.
- The Board would have the power to, among other things, issue licenses for marijuana cultivation, manufacturing, testing, wholesale sales, and retail sales.
- The Authority would be able to start accepting license applications on July 1, 2023 and it would be required to give preference to social equity applicants, as determined by Board regulations. Any applicant issued a license by the Authority after July 1, 2023 would be authorized to operate, except no marijuana store licensee may sell retail marijuana or retail marijuana products to a consumer prior to January 1, 2024.
- Allows any person 21 years of age or older to cultivate up to two mature marijuana plants and two immature marijuana plants for personal use, but makes it a felony to otherwise cultivate or manufacture marijuana without a license.
- Marijuana Tax
- Establishes a marijuana tax, which would be levied on the sale
of any retail marijuana, retail marijuana products, paraphernalia,
non-retail marijuana, and non-retail marijuana products at the rate
of 21%, with some exceptions. For example, the tax would not apply
to any sale:
- From a marijuana establishment to another marijuana establishment.
- Of cannabis oil for treatment under the provisions of § 54.1-3408.3.
- Of industrial hemp by a grower, processor, or dealer.
- Of industrial hemp extract or food containing an industrial hemp extract.
- Establishes a marijuana tax, which would be levied on the sale
of any retail marijuana, retail marijuana products, paraphernalia,
non-retail marijuana, and non-retail marijuana products at the rate
of 21%, with some exceptions. For example, the tax would not apply
to any sale:
- Social Equity Initiatives
- Establishes a Cannabis Equity Reinvestment Board to be chaired by the Director of Diversity, Equity, and Inclusion.
- Establishes a Cannabis Equity Reinvestment Fund that only
allows money to be used for:
- Families and communities in areas that have been historically and disproportionately targeted and affected by drug enforcement;
- Providing scholarships to historically marginalized youth that have been adversely impacted by substance abuse;
- Awarding grants to support workforce development for persons residing in areas disproportionately impacted or targeted by drug enforcement; and
- Contributing to the Virginia Indigent Defense Commission.
- Establishes the Virginia Cannabis Equity Business Loan Program and Fund to provide low or zero-interest loans to qualified social equity license applicants in order to foster business ownership and economic growth within communities that have been the most disproportionately impacted by the former prohibition of cannabis.
- If license limits are imposed, the Authority would be required to reserve a license slot for a qualified social equity applicant for every license that was initially granted to a social equity applicant and subsequently surrendered.
- Local Laws
- Prohibits localities from passing any laws that regulate or prohibit the cultivation, manufacture, possession, sale, wholesale distribution, handling, transportation, consumption, use, advertising, or dispensing of retail marijuana or retail marijuana products in the Commonwealth, with some exceptions.
House Bill 2312 and Senate Bill 1406: Key Differences
- License Limits
- HB 2312 would limit the number of licenses issued by class and type to no more than 400 retail marijuana stores, 25 marijuana wholesalers, 60 marijuana manufacturing facilities, and 450 marijuana cultivation facilities.
- SB 1406 would require a limit on the number of licenses issued by type or class to operate a marijuana establishment, but it would grant the Board authority to set those limits.
- Vertical Integration
- SB 1406 would authorize the Board to issue multiple licenses to one person, but would require that person to pay the Board $1 million. This would effectively authorize vertical integration.
- HB 2312 does not have a similar provision.
- License Reservations
- If license limits are imposed, SB 1406 would require the Authority to reserve license slots for all cannabis dispensing facilities and pharmaceutical processors that have been issued a permit by the Board of Pharmacy under the Commonwealth's current medical marijuana framework.
- HB 2312 would not give such a preference to current permit holders.
- Geographic Dispersion Control
- HB 2312 would require the Authority to ensure geographic dispersion for retail marijuana store licenses.
- SB 1406 would not require geographic dispersion.
- Marijuana Tax
- HB 2312 would authorize a locality to charge an additional marijuana tax without specifying a limit.
- SB 1406 would only allow a locality to charge an additional 3% marijuana tax.
- Local Laws
- Despite the prohibition on the ability of localities to pass laws regulating the marijuana market, SB 1406 would allow localities to prevent, through referendum, the establishment of retail marijuana stores within their borders. SB 1406 would allow localities to hold a referendum between January 1, 2022 and December 31, 2023, with results becoming effective January 1, 2024.
- HB 2312 does not contain provisions providing an exception to the general prohibition.
- Civil Fines for Possession
- HB 2312 would allow a civil fine of $25 to be imposed on anyone 21 years of age or older that possesses, in public, more than one ounce of marijuana.
- SB 1406 would eliminate this provision.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
