Another Wobbly Domino: Virginia Passes Legislation to Launch Adult-Use Market
March, 2024 - United States of America
By: Irina Dashevsky, Esq.
It appears Virginia may be the next state to roll out an adult-use cannabis program (and the first state in the South to do so). Interestingly, Virginia legalized adult-use possession and limited cannabis home growth in 2021 but has since stagnated on ramping up a market, which has resulted in the emergence of a fairly robust illicit market in the state. However, on February 28, 2024, the House and Senate passed companion legislation that would allow for the ramp-up of an adult-use cannabis program administered and regulated by the Virginia Cannabis Control Authority (CCA) (the “Cannabis Bill”). It is now up to Gov. Glenn Youngkin to either sign the Cannabis Bill (and he has indicated a lack of interest in doing so), veto it, or do nothing, in which case it would become law.
If the Cannabis Bill goes into effect, the CCA would run a licensing process, and licensed dispensaries could begin selling adult-use cannabis to those 21 or older on May 1, 2025. The Cannabis Bill provides for a variety of license types in limited quantities, including cultivation (limitations based on canopy tier), processing (100), dispensing (350), and microbusinesses. Existing medical operators could apply for up to five adult-use dispensary licenses. The Cannabis Bill also calls for an 11.625% excise tax, which is comprised of a state tax, a local tax option, and a sales-and-use tax. Municipalities will have the opportunity to opt out of adult-use dispensaries based on a voter referendum. In sum, the program seems to have the hallmarks of several other adult-use state programs such as Illinois, Maryland, and New Jersey.
This is an exciting development in an industry that has recently been plagued by a significant downturn as the constraints of federal illegality and cost of capital have caught up to operators over the past year. All eyes are on Governor Youngkin.
We will continue to closely monitor the developments and updates in Virginia. For more information, please contact [email protected].
The post Another Wobbly Domino: Virginia Passes Legislation to Launch Adult-Use Market appeared first on Greenspoon Marder LLP.
