Competing Marijuana Sales Bills Move Forward In Virginia’s House And Senate, Though Key Differences Remain

February 12, 2024 · Marijuana Moment

Both chambers of Virginia’s legislature have now given at least preliminary approval to separate plans that would legalize retail marijuana sales in the commonwealth. Significant differences remain between the competing proposals, however, which lawmakers will need to hammer out before sending any bill to the desk of Gov. Glenn Youngkin (R).

Meanwhile, measures on resentencing people with prior cannabis convictions and preventing the legal use of marijuana from denying parental visitation or custody rights also moved forward ahead of a crossover deadline this week.

As for the legal sales measures, the Senate gave on initial approval to a bill in that chamber—SB 448—on a voice vote Monday. A final vote to formally send the measure to the House of Delegates is expected Tuesday.

Earlier in the day, the House, for its part, voted 52–48 on third reading for final passage of a competing legal sales bill, HB 698. The vote fell almost entirely along partly lines, with only one Republican—Del. Chris Obenshain—voting for the proposal.

Pending final passage of the Senate legislation this week, each bill will move to the opposite chamber, where lawmakers are expected to make further amendments, setting up likely bicameral negotiations in a conference committee.

Both measures would launch legal, regulated marijuana sales beginning next year, though significant differences remain in terms of timing, licensing, taxes, social equity, criminal penalties and whether cultivators would be able to grow cannabis outdoors. The differences have divided some advocates, though supporters say they’re still hopeful about reaching consensus.

Del. Paul Krizek (D), the sponsor of the House bill, closed comments ahead of second reading passage on the floor last week with a message to Senate lawmakers “who share my belief that now it’s time for the state’s $3 billion illegal cannabis market to have competition from a safe, tested and taxed product.”

“I recognize there’s many aspects of this bill that you might not be comfortable with,” he said. “But I’m committed to working with you and everybody in this body to find a bipartisan bill as we continue work on this complicated topic.”

Use, possession and limited cultivation of cannabis by adults is already legal in Virginia, the result of a Democrat-led proposal approved by lawmakers in 2021. But Republicans, after winning control of the House and governor’s office later that year, subsequently blocked the required reenactment of a regulatory framework for retail sales. Since then, illicit stores have sprung up to meet consumer demand.

Even if the legislature passes a final bill now that Democrats have regained control of both chambers in the 2023 elections, it’s unclear how it will be received by Youngkin. While the governor has not explicitly said he’ll veto a retail marijuana proposal, he signaled last month that he doesn’t have “any interest” in legalizing sales under the Democrat-led plans.

As passed by the House, HB 698 would allow existing medical marijuana operators, five hemp businesses and up to 60 equity-focused microbusinesses open for retail sales on January 1, 2025—earlier than stores would open under the Senate bill. Medical operators would need to pay $400,000 apiece to six microbusinesses through a proposed accelerator program in order to qualify for the early opening.

Cannabis products would be taxed at 9 percent under the House proposal, and outdoor cultivation would be banned completely.

The Senate bill sponsored by Sen. Aaron R. Rouse (D), meanwhile, would not in its current form give any group of license applicants a head start on adult-use sales. Retailers would open later in 2025 after a general application and licensing process. Products would incur a maximum tax rate of about twice that of the House measure, or 17.5 percent, which would consist of a 12.5 percent state excise tax, up to a 3.5 percent local tax that municipalities could impose and the 1.125 percent portion of Virginia’s sales tax that funds K–12 education. (Full Story)

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