Virginia House Approves Marijuana Sales Bill On Initial Vote, With Final Passage Expected Next Week As Senate Considers Separate Plan

Virginia’s House of Delegates has given preliminary approval to a bill that would legalize and regulate the retail sale of marijuana in the commonwealth, with a final vote on the measure expected early next week.

On a voice vote, the chamber approved the the bill, HB 698 from Del. Paul Krizek (D), during second reading consideration on Friday. Advocates expect a final third reading floor vote to be held on Monday, ahead of the legislature’s crossover deadline the next day.

A competing measure, meanwhile, is advancing in the Senate, having passed out of committee on Thursday. If both bills clear their respective chambers, lawmakers will either need to pick one or work to merge provisions of the two together.

“Both bills are rapidly approaching the finish line in their respective chambers ahead of the looming crossover deadline,” said JM Pedini, development director for the advocacy organization NORML and executive director of the group’s Virginia chapter.

Advocates are now working to build consensus on how to move forward. As the legislative session goes on, they expect lawmakers will eventually attempt to blend the two bills into one.

“After crossover, we can expect to see each chamber amend the other’s bill with a substitute of their own version,” Pedini told Marijuana Moment in a message after Friday’s vote. “But the real work will be done in conference committee, at which point conferees will have to decide if these are simply messaging bills, or if they intend to send Governor Youngkin bills that are palatable enough for him to even consider not vetoing.”

While Gov. Glenn Youngkin (R) has not explicitly said he’ll veto a retail marijuana bill, he said last month that he doesn’t have “any interest” in legalizing sales under the Democrat-led plans.

Both measures would launch legal sales of marijuana next year, though adult-use stores would open slightly sooner under the House bill as it now stands.

In its current form, HB 698 would allow existing medical marijuana operators, five hemp businesses and up to 60 equity-focused microbusinesses open for retail sales on January 1, 2025. A medical operator would need to pay $400,000 apiece to six microbusinesses through a proposed accelerator program in order to qualify for the early opening.

Krizek said in an email to Marijuana Moment after the vote that his bill “reflects extensive discussions with diverse stakeholders and strikes the right balance on creating an adult-use retail market that prioritizes consumer safety and public health, with a strong nod towards making whole those communities negatively impacted by the war on marijuana.”

Microbusiness licenses would need to be at least two-thirds directly controlled by people who meet certain social equity criteria, such as being from historically low-income areas or having been directly impacted by cannabis prohibition. Priority would be given to people meeting multiple criteria.

Cannabis products would be taxed at 9 percent under the House bill, and outdoor cultivation would be banned completely.

“This bill will create a new regulatory scheme for a multi-billion dollar industry, which is a complex undertaking,” Krizek, the sponsor, told House colleagues ahead of the floor vote on Friday. “We only get one shot at rolling out a retail market in an orderly fashion, and we have to get it right.”

Projections based on legal sales in neighboring Maryland, Krizek said, suggest the state could bring in $15 million during the first six months after retail stores open and up to $50 million during the first year of legal sales.

The competing measure in the Senate, SB 448 from Sen. Aaron R. Rouse (D), would, by contrast, not give any group of applicants a head start on adult-use sales. Retailers would open later in 2025 after a general application and licensing process.

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Under the Senate bill, products would incur a maximum tax rate of about 17.5 percent, which would consist of a 12.5 percent state excise tax, up to a 3.5 percent local tax that municipalities could impose and the 1.125 percent portion of Virginia’s sales tax that funds K–12 education.

Outdoor cultivation would be allowed for smaller licensed growers under the Senate proposal, though larger cultivators would be required to grow inside.

Jason Blanchette, president of the Virginia Cannabis Association, has applauded advocates’ success at shepherding two legalization bills through the legislature, though he currently prefers the Senate proposal. The House bill would unfairly advantage large, out-of-state medical marijuana businesses, he argued, and its prohibition on outdoor cultivation would be prohibitively expensive for most small operators.

Nevertheless, told Marijuana Moment he’s hopeful that advocates and lawmakers can craft a proposal that will win legislative approval.

“There is definitely a version of these bills that Republicans will vote for,” Blanchette said, “and the trick is figuring out which version that is.”

Another advocate, Chelsea Higgs Wise, of the group Marijuana Justice, which currently prefers the House measure, said the differences between the two bills “should worry every Virginian that championed 2021 legalization.”

A major difference, she noted, is how the two bills treat equity. Krizek has amended the House bill to provide accelerated startup funding for up to 30 microbusinesses and specifically included past cannabis convictions among eligibility criteria in an effort to address the drug war’s harms.

The Senate bill, meanwhile, “lacks meaningful equity and continues to use the talking point of an equal start without acknowledging that minority businesses are never on the same starting line without meaningful inclusion,” Wise said, saying Democrats’ Senate majority “has left equity on the table.”

“Senator Rouse states that his bill pushes back on corporate monopolies,” she added, “while avoiding that an ‘equal start’ without direct supports to minority businesses will surely mean Black and Brown entrepreneurs are late to the party.”

Krizek, for his part, closed his comments on the House floor on Friday with a message to Senate lawmakers “who share my belief that now it’s time for the state’s $3 billion illegal cannabis market to have competition from a safe, tested and taxed product.”

“I recognize there’s many aspects of this bill that you might not be comfortable with,” he said. “But I’m committed to working with you and everybody in this body to find a bipartisan bill as we continue work on this complicated topic.”

In comments to Marijuana Moment, Krizek said that “Virginia’s illicit market has ballooned from $1.8B in 2021 to a now whopping $2.4 in 2023.”

“Delaying legal retail access will only continue to embolden illicit operators and incentivize criminal activities in our communities,” he continued. “It’s long past time that we take marijuana off the street corner and place it behind an age-verified counter where it can safely be sold only to adults 21 and older.”

Use, possession and limited cultivation of cannabis by adults is already legal in Virginia, the result of a Democrat-led proposal approved by lawmakers in 2021. But Republicans, after winning control of the House and governor’s office later that year, subsequently blocked the required reenactment of a regulatory framework for retail sales. In the interim, illicit stores have sprung up to meet consumer demand.

Democrats’ victories last November to clinch control of both legislative chambers have some hopeful the state could enact cannabis sales provisions this year. But that requires building consensus among Democrats in the legislature while also avoiding a possible veto from the governor—or galvanizing enough lawmakers in the polarized state to overcome a veto.

When he was first elected, Youngkin said he was “not against” allowing commercial sales categorically. He expressed that there were certain Democratic “non-starters” in earlier 2021 legislation such as provisions setting labor union requirements for marijuana businesses—and he wanted to address concerns from law enforcement—but he generally indicated that there was a bill he could support.

That expectation has been tempered during the beginning of the new year, however, with some predicting the governor will veto any legal sales bill that lawmakers send him.

A sales bill did advance through the Democratic-controlled Senate last session, but it stalled in committee in the House, which at the time had a GOP majority.

Separately, a Senate committee voted unanimously on Wednesday in favor of advancing a bill to would prevent the state from using marijuana alone as evidence of child abuse or neglect, or as a reason by itself to deny custody or visitation rights. The change is meant to protect parents and guardians from discrimination around state-legal cannabis.

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Photo courtesy of M a n u e l.

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