Sales of recreational marijuana in Virginia could come earlier than planned if newly proposed legislation passes the General Assembly smell test.
Senate Bill 313, sponsored by Sen. Adam Ebbin, would set the stage for the state’s existing medical cannabis operators and a small crop of the existing hemp processors to begin selling recreational marijuana Jan. 1, 2023, a year before the broader retail market is currently slated to launch.
Medical operators would be permitted to sell recreational marijuana out of their existing growing-and-processing facilities as well as the five satellite dispensaries each operator is permitted to operate under the rules of Virginia’s medical cannabis program.
Five hemp processors — to be chosen at a later date — would likewise be allowed to sell recreational marijuana at a processing facility in addition to five satellite dispensaries.
Currently in Virginia there are four active medical operators: Green Leaf Medical (Richmond area) Columbia Care (eastern Virginia), Jushi Holdings (Northern Virginia) and Green Thumb Industries (southwestern Virginia). Each of those would be eligible for early entry into the retail market as part of the bill.
There are about 260 active industrial hemp processors registered in Virginia. The bill would be restricted to those that have been registered with the Commissioner of Agriculture and Consumer Services before March 31, 2021 and have processed at least 40,000 pounds of hemp. Of that group, five retail licenses would be allowed under the proposed legislation.
Those medical operators and hemp processors would be required to pay a $1 million fee in order to sell recreational marijuana earlier than anyone else. The state would also collect a 21 percent excise tax from the companies.
Those revenue streams would flow to the Virginia Cannabis Control Authority to fund incubator programs that would require the chosen operators to help support the launch of smaller, independent retailers that could hit the ground running once the market is fully open. The bill charges the authority with creation of the fine details of the program.
The legislation is an attempt to jump-start recreational sales, which lawmakers expressed a desire for in recent months, prior to the rollout of the wider market, Ebbin’s chief of staff Henry Watkins said in an interview last week.
“This is a provisional license for the transitional period,” he said, adding that the provisions would sunset with the launch of the wider retail market.
In addition to getting products on shelves quickly, the legislation is also intended to tee up new retailers in designated rural and urban opportunity zones.
“We’re trying to set up as many small businesses as possible,” Watkins said.
Ebbin’s bill and cannabis-related legislation filed by other lawmakers were the subject of a panel discussion at Virginia NORML’s cannabis conference in January, where panelists were supportive of the effort to roll out marijuana retail sales faster.
Though some audience members expressed concern that the proposals give larger companies an unfair advantage over newcomers to the industry, Columbia Care Vice President of Government Affairs Ashley Allen pushed back on that idea by citing medical operators’ limited retail footprints.
“Medical processors are only going to be able to absorb maybe 5 to 10 percent, that’s probably on the high end, of the market. The other thing you’re going to see is we can only have a set number of dispensaries,” she said.
Columbia Care is a medical cannabis company licensed to operate in eastern Virginia. It also owns Green Leaf Medical, which operates in the Richmond area.
Ebbin’s bill isn’t the only one that would tee up a phased market rollout.
Senate Bill 621, sponsored by Sen. Siobhan Dunnavant, and House Bill 211, sponsored by Dels. Keith Hodges and Mark Sickles, would both set the stage for medical operators to sell recreational marijuana starting July 1 but neither would extend that ability to hemp processors.
SB 313 and SB 621 are scheduled to be considered by a subcommittee of the Senate’s rehabilitation and social services committee today, and HB 211 hadn’t been referred to a committee as of Tuesday afternoon, according to the General Assembly’s online legislative information system.