The Virginia General Assembly is currently considering adult use cannabis legalization this session. Governor Northam has made it a priority. The legislative black caucus has endorsed it and the legislative sponsors in both chambers are senior members of their caucuses.
However, there remain a few hurdles to passing this
legislation.
First, the adult use legislation does not guarantee adult use
cannabis licenses to the existing medical cannabis operators in the
Commonwealth. This is an issue. These medical operators are
licensed and are currently growing cannabis and have started to
sell to the medical population. They should be able to share in the
future Virginia adult use cannabis program to ensure continuity of
the medical program and its medical population. Moreover, these
operators have an existing infrastructure in place that would allow
them to carry over their operations into the adult use market place
ensuring a quick and seamless transition to the adult use program
while not leaving behind any medical patients. There have been some
concerns among progressive members in the House of Delegates in
particular that worry about "big cannabis" overtaking and
running the cannabis programs in Virginia. This is inaccurate
thinking. The Virginia adult use program is modeled largely on the
Illinois adult use model. For the most part, Illinois has
transitioned into an adult use regulatory program quite well. In
that process, Illinois has seen its existing medical operators also
become adult use operators while smaller "craft" style
adult use licenses and social equity licenses thrive. The point
being – you can have a strong adult use marketplace with both
small and big operators as well as ensuring licenses to social
equity applicants.
Another sticking point remains around the prospect of mandating the
regulatory structure of "vertical integration". This
refers to the state requiring all cannabis operators to be able to
carry out all aspects of the cannabis business from cultivation to
extraction to distribution and retail. Vertical integration can be
a very good model in terms of the state's ability to regulate
and keeping costs generally low for patients and consumers but it
can pose some concerns around creating distinct monopolies and the
notion of creating "big cannabis" as outlined above. If
the concern is about having too few operators involved, Virginia
legislators should strike a middle ground where they can allow
smaller operators into the process while allowing for a few
distinct numbers of vertical operators. Many states, such as
Pennsylvania have followed this approach and looks to be working
reasonably well.
Finally, there has been much discussion about the timing of
implementing the adult use program and when to remove criminal
penalties associated with cannabis. The main argument for delay is
to allow the state and the regulatory agencies that would regulate
cannabis the necessary time to promulgate key rules and
regulations. Again, a middle ground can be reached with this
approach. For example, remove the criminal penalties associated
with cannabis to be removed July of this year and potentially
implement a delay for the adult use program so it can come online
without a hitch.
Having worked for both Senator Mark Warner and Governor Terry
McAuliffe, I have always been impressed with the state
legislature's ability to compromise and find common ground to
enact rational, middle of the road and responsible legislation.
These are important policy decisions and there is no right answer.
Virginia will likely come to consensus and pass an adult use. Will
it be perfect and make everyone involved pleased? No. However, as
my former boss Senator Warner would say, if both sides were not
100% thrilled with the outcome, you have usually done something
right. Hopefully, Virginia will continue to follow this approach in
terms of cannabis legalization.
Originally Published by Foley Hoag, February 2021
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.