Hampton Roads Cannabis entrepreneurs support legislation to create Virginia retail market
Hampton Roads Cannabis Entrepreneurs Await Retail Market Legislation.
Hampton Roads cannabis entrepreneurs are enthusiastic about legislation that would create a legal retail market for the drug although the governor hasn’t pledged support.
In 2021, Virginia legalized possession of small amounts of marijuana but lawmakers punted on establishing a regulatory framework for a retail market. So, buying and selling cannabis remains illegal under state law, except for medical marijuana dispensaries licensed by the state.
Democrats want to open the state’s retail market and have moved two bills through the General Assembly this year: HB698 from Del. Paul Krizek, D-Alexandria, and SB448 from state Sen. Aaron Rouse, D-Virginia Beach.
Lawmakers had reached an agreement around many of the basic details. Both bills create a government body, the Virginia Cannabis Control Authority, to oversee the licensing and regulatory process. Retail sales would begin May 1, 2025. Both limit the amount of licenses to 350 retail stores, 100 processing facilities and 125 cultivation facilities. The legislation would increase the personal possession limit from 1 ounce to 2.5 ounces.
But some equity-centered language in Krizek’s bill has been softened or removed. Originally, the bill would have created an incubator program where current medical marijuana licensees would mentor several micro businesses — including those owned by those with marijuana-related convictions, those from historically economically disadvantaged communities or veterans, among others.
Now, that program would be handled by the Cannabis Control Authority instead.
Additionally, Krizek’s bill would have let micro businesses open earlier than larger companies. That language is also gone from the current bills.
Phillip Thompson, a Loudon County attorney, helped author Krizek’s bill. He said he’s disappointed some of the equity language has been changed, but is happy to see some remaining provisions. For example, 60% of profits collected by the Cannabis Control Authority would be distributed to a fund designed to help those most impacted by the war on drugs.
“We think that’s a pretty significant victory for us,” Thompson said.
Virginia Beach resident Ron Morton would directly benefit from a micro business incubator program. After a possession conviction in college, he’s bounced back with a cannabis-related business with his wife, Sarah Kiah Morton. Their company, Lockgreen, sells a variety of marijuana lock boxes designed to keep the drugs away from children and pets and help consumers comply with open container laws.
A lack of a Virginia retail market hasn’t stopped them, either. They sell their products nationwide, Sarah Kiah Morton said, to consumers wherever marijuana has been decriminalized.
However, the pair still want to apply for a cannabis processing facility license if and when the retail market is created.
Ron Morton said it’s very challenging for new entrepreneurs to establish businesses that deal directly with marijuana, including growing, processing or retail sales, because of the large initial capital requirements and federal laws. So, he supports any assistance an incubator program might offer to “those who are really serious about acquiring licensing.”
Virginia Beach resident Matthew Adolph also isn’t waiting on a Virginia retail market to get his business idea going. He’s helping build a website called Reign Forest, which he describes as both a database for marijuana strains combined with educational articles and components.
Still, Adolph noted that a retail market would boost his business. More dispensaries and other legal small businesses mean more consumers and more website traffic.
A retail market could generate between $31 million and $62 million in initial annual state tax revenue and create more than 18,000 new jobs, according to a 2020 study from the Joint Legislative Audit and Review Commission.
But the creation of a legal recreational marketplace isn’t a done deal.
It’s unclear whether Republican Gov. Glenn Youngkin will sign or veto a retail cannabis bill. In an email, Youngkin press secretary Christian Martinez did not directly answer what action the governor would take. He instead pointed to a past comment where Youngkin said he didn’t have a lot of interest “pressing forward” with marijuana legislation.
Leaders of several Virginia law enforcement member associations also recently sent a letter to lawmakers expressing their opposition to a retail cannabis market. The letter writers — including leaders of the Virginia Association of Chiefs of Police, Virginia Association of Campus Law Enforcement Administrators, Virginia Sheriffs’ Association and Virginia State Police Association — said they believed the law could increase crime or behavioral health issues.
“We fear the consequences of establishing a retail market for cannabis will only increase crime and add more stress on our State Police members,” Bill Carrico, executive director of the Virginia State Police Association, said in a news release.
House and Senate Democrats worked to conform the two bills with floor amendments, agreeing to a framework Wednesday that included a retail sales tax rate of 11.625%. That includes 8% for the state, a 2.5% local option and 1.125% for schools.
Or, as Krizek put it in an email Wednesday: “We are all in a good mellow place.”
