Existing medical marijuana operators in Virginia will have to pay a $10 million fee to convert to adult sales — and black Virginians will be encouraged to enter the industry through a community equity program — under proposed regulatory frameworks being considered by lawmakers.
The sale of adult-use marijuana in Virginia will begin as soon as November under a bill in the state House of Delegates, and a bill in the state Senate that would introduce the first adult-use marijuana market in the South until January 2027, as Cardinal News reported.
Virginia legalized adult-use marijuana in 2021, but sales have stalled since then. Glenn Youngkin, a former Republican governor, twice vetoed legislation that would have launched a nearly $3 billion marijuana market, according to one estimate.
But that will change under Democratic Gov. Abigail Spanberger, who took office earlier this month. Former state Sen. Adam Ebbin, author of past marijuana bills that Youngkin voted for, will join Spanberger’s administration as a senior adviser to the state Cannabis Control Authority.
The effective date is a major difference between the competing House and Senate bills, both of which include licensing and social equity provisions.
How many cannabis sales licenses will be available in Virginia?
- A cap for selling marijuana: The House bill increases the number of retail licenses to 350, according to WVTF.
- A $10 million investment in MMJ’s transformation: Existing medical marijuana licenses, held primarily by large marijuana MSOs, will be required to pay a $10 million fee to transition to the adult-use market.
New market entrants will have to meet one of seven criteria. Special consideration will be given to applicants with marijuana convictions on their criminal records, according to Cardinal News.
There are currently five vertically integrated permits for medical marijuana in the state. A subsidiary of Millstreet Credit Fund, a Boston-based hedge fund, has announced its intention to buy one of the concessions for $130 million.
The other four are owned by:
- They were owed money by Miami-based MSO Ayr Wellness, which had yet to open a clinic and sell its merchandise at a fall closing sale.
- Boca Raton, Florida-based Jushi Holdings
- Chicago-based Green Thumb Industries
- Verano Holdings Corp.
Marijuana cultivation restrictions, delivery
- Cultivation restrictions: Bills limit the canopies for farming.
- Delivery is legal: Bills allow home delivery.
- Local control: Premises are not allowed to prohibit the direct sale of marijuana.
Taxation and distribution of income
- Tax structure: The proposal imposes an 8% state tax on adult marijuana sales, with local taxes of up to 3.5%.
- Redistribution of income: Revenue from marijuana sales will be redistributed, with reduced funding for pre-kindergarten programs for at-risk 3- and 4-year-olds.
- Limitations of grown objects: Adults 21 and older will be allowed to possess 2.5 ounces of marijuana, an increase from the current one ounce limit.
Does Virginia’s medical marijuana include social equity?
- Social equity focus: The proposal also includes measures to prioritize equity in licensing, particularly in previously disadvantaged regions.
