Virginia Senate and House Democrats agree on adult-use market bill, set to standoff with Gov.


Despite being the first southern state to legalize adult-use cannabis, Virginia’s Republican led government dragged its feet the last three years to prevent a market launch. But Democrats are trying yet again to override Gov. Glen Youngkin who has promised to veto any market launch since his election.

Democrats struck a deal last Friday, according to 8News, that would allow 350 retail stores to open on May 1, 2025. The later start date aims to prevent medical providers getting a head start on the market. The deal includes a 4.5% state tax with an additional 4.5% local tax option. Maryland taxes adult-use sales at 9%.

Many industry leaders say the tax needs to be low enough to allow legal options to compete with current illicit options for consumers. High taxes will inflate the cost of cannabis and could potentially push consumers out of the legal market.

Previously, two bills were working through opposite branches. HB 698 and SB 448 both tackled a legal adult-use market launch with a few differences. As of last week, the House bill is in the Finance and Appropriations committee, and the Senate bill was reported from the General Laws committee with substitutions. The new bill will still need to be passed through both branches.

The bills’ few differences mainly centered around the launch of the market. The House bill allowed licenses to be issued by the Virginia Cannabis Control Authority (CCA) starting July 1, 2025. But it allowed specific pharmaceutical processors to start operations this year, July 1, 2024 and other limited operators to open Jan. 1, 2025.

The House bill prioritized existing companies and microbusinesses for a quick launch to allow the market to get off its feet as soon as possible.

On the other hand, The Senate bill allowed CCA to issue licenses starting this year, July 1, 2024 but prevented all sales until Jan. 1, 2025. This bill focused more on prioritizing social equity in the market, allowing CCA to waive fees for qualifying applicants.

Much like the House proposed bill, Maryland allowed medical operators to expand to adult-use sales before awarding new licenses. Allowing already established dispensaries to reap $61.5 million in adult-use sales in the first six months of adult-use sales. This head start would likely increase inequity in the market as many of the established medical dispensaries were big cannabis companies.

The favoring of existing businesses is now avoided in the new joint bill working its way to the governor’s desk.

Despite the promise of legislation passing through both the Senate and House, any bill will still face Gov. Glenn Youngkin who has repeatedly said he will oppose a recreational cannabis market launch.

Youngkin told reporters in January that “I just don’t have a lot of interest in pressing forward with marijuana legislation.” Democrats will need a supermajority to override Youngkin’s veto. At 21-19 majority in the Senate and 51-49 in the House, they lack the votes.

While Youngkin continues to drag his feet, 90% of patients in Virginia continue to find their weed elsewhere than the legal market, according to CCA’s own study.


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