Virginia House Lawmakers Amend Senate-Passed Marijuana Sales Bill, Setting Stage For Bicameral Negotiations

Virginia lawmakers have advanced a bill to legalize marijuana sales along another step in the bicameral legislative process, with a House committee approving a substitute version of a Senate-passed reform measure.

The House General Laws Committee on Tuesday took up the legislation from Sen. Lashrecse Aird (D) and replaced its contents with the text of a House-passed version that’s being sponsored by the panel chair, Del. Paul Krizek (D), with some additional changes.

The bill as revised passed 16-4, sending it to the Appropriations Committee for further consideration and setting the stage for a bicameral conference committee to hammer out differences between the chambers’ version following additional steps in the legislative process.

“They’re still not going to be exact, but we’re working towards that,” Krizek said at the hearing. “We’re getting really close.”

While the revised bill as approved in committee is nearly identical to the House version Krizek is sponsoring, the panel adopted an additional series of amendments before voting it out favorably.

The proposal now stipulates that microbusiness licensees can cultivate, process or conduct retail sales at up to two locations instead of one, so long as they’re located within 10 miles of each other and operate under common ownership and control.

Members also amended the legislation to clarify that current medical cannabis businesses would only be able to cultivate cannabis indoors, including in secure greenhouses with a total canopy cap of 70,000 square feet. The amendment also makes it so they could not have any additional marijuana licenses beyond their medical permits with “dual-use privileges.”

Finally, the measure’s conversion fee structure was revised in a way that lets current medical marijuana businesses pay the $5 million for the privilege to serve the adult-use market in three installments: $2 million the first year, $2 million the second year and $1 million the third year.

Virginia lawmakers took action on multiple marijuana bills on a key deadline last week—advancing proposals to legalize cannabis sales, provide a pathway to resentencing for prior marijuana convictions and allow medical cannabis access in hospitals for seriously ill patients.

While both House and Senate marijuana sales proposals are aimed at giving adults a legal means of buying cannabis, the possession and home cultivation of which was legalized in the state in 2021, there are several substantive differences that will need to be resolved before the reform potentially goes to the governor’s desk. The House committee passage of the Senate legislation with the substitute language was another step toward those negotiations.

The differences between each chamber’s original versions include the start date for legal sales, cannabis tax rates and conversion fees for current medical marijuana businesses to participate in the recreational market and the form of the regulatory body that will oversee the industry, among other issues.

With respect to the Senate bill as introduced, members recently clashed in committee about amendments to the body’s version that would have added new penalties for illegal cannabis activity.

The amendments at issue from the Courts of Justice Committee included penalties for consumers who buy from unlicensed sources, the recriminalization of cannabis possession by people under 21 and making sales a class 1 misdemeanor for a first offense and a crime punishable by mandatory jail time for a second offense. As revised, the bill would have also raised the penalty for unlicensed cultivation to a felony punishable by up to five years in jail and made it a felony to transport with intent to distribute cannabis across state lines.

But the Finance and Appropriations Committee reversed the amendments earlier this month amid pressure from a coalition of advocacy groups that sent a letter to senators saying they undermined the “intent” of the legislation and the “will of the people” by adding criminal penalties for certain cannabis-related activity.

Despite the outstanding differences, both chambers’ commercial sales bills have largely aligned with recommendations released in December by the legislature’s Joint Commission to Oversee the Transition of the Commonwealth into a Cannabis Retail Market.

Meanwhile, certain GOP members have found themselves ideologically aligned with their Democratic colleagues throughout this legislative process, breaking with the majority of their caucus in support of creating a regulated marketplace for adults to purchase cannabis.

Since legalizing cannabis possession and home cultivation in 2021, Virginia lawmakers have worked to establish a commercial marijuana market—only to have those efforts consistently stalled under former Gov. Glenn Youngkin (R), who twice vetoed measures to enact it that were sent to his desk by the legislature.

Here are the key details of the Virginia marijuana sales legalization legislation, SB 542 and HB 642, prior to the House committee adoption of the substitute on Tuesday:

• Adults would be able to purchase up to 2.5 ounces of marijuana in a single transaction, or up to an equivalent amount of other cannabis products as determined by regulators.
• The House bill sets the state date for legal sales as November 1, 2026, while the Senate measure would allow them to begin on January 1, 2027.
• The Senate bill would set an excise tax on cannabis products of 12.875 percent, in addition to a 1.125 percent state sales tax and a mandatory 3 percent local tax. The House measure would apply an excise tax of 6 percent as well as a 5.3 percent retail sales and use tax, while allowing municipalities to set a local tax of up to 3.5 percent.
• Under the House bill, the Virginia Cannabis Control Authority would oversee licensing and regulation of the new industry, while the Senate legislation tasks that to a new combined Alcoholic Beverage and Cannabis Control Authority.
• The House bill calls for revenue to be distributed to a new Cannabis Equity Reinvestment Fund (60 percent), early childhood education (10 percent), the Department of Behavioral & Developmental Health Services (25 percent) and public health initiatives (5 percent). The Senate proposal, meanwhile, would put 30 percent toward the equity reinvestment fund, 40 percent for early childhood eduction, 25 percent to the behavioral and developmental health services department and 5 percent to public health initiatives.
• Local governments could not opt out of allowing marijuana businesses to operate in their area.
• Delivery services would be allowed.
• Serving sizes would be capped at 10 milligrams THC, with no more than 100 mg THC per package.
• Existing medical cannabis operators could enter the adult-use market if they pay a licensing conversion fee that is set at $15 million in the Senate bill and $10 million in the House measure.
• Cannabis businesses would have to establish labor peace agreements with workers.
• A legislative commission would be directed to study adding on-site consumption licenses and microbusiness cannabis event permits that would allow licensees to conduct sales at venues like farmers markets or pop-up locations. It would also investigate the possibility of the Virginia Alcoholic Beverage Control Authority becoming involved in marijuana regulations and enforcement.

Gov. Abigail Spanberger (D) supports legalizing adult-use marijuana sales.

Meanwhile, House and Senate lawmakers also advanced separate legislation to provide resentencing relief for people with prior marijuana convictions.

The legislation would create a process by which people who are incarcerated or on community supervision for certain felony offenses involving the possession, manufacture, selling or distribution of marijuana could receive an automatic hearing to consider modification of their sentences.

The measure applies to people whose convictions or adjudications are for conduct that occurred prior to July 1, 2021, when a state law legalizing personal possession and home cultivation of marijuana went into effect.

Also on Tuesday, the House passed a bill to enact what’s known as “Ryan’s law,” a policy change providing that patients with terminal illnesses who are registered cannabis patients can access medical marijuana at health facilities such as hospitals.

It would require healthcare facilities to establish policies “to address circumstances under which an eligible patient would be permitted to use medical cannabis.”

Under the House legislation, healthcare facilities could suspend medical cannabis allowances if a federal agency such as the Department of Justice or Centers for Medicare and Medicaid Services takes enforcement action on the issue or issues a rule or notification expressly prohibiting use of medical cannabis in health facilities.

The Senate passed differing legislation concerning the use of medical cannabis in health care facilities earlier this month.

—
Marijuana Moment is tracking hundreds of cannabis, psychedelics and drug policy bills in state legislatures and Congress this year. Patreon supporters pledging at least $25/month get access to our interactive maps, charts and hearing calendar so they don’t miss any developments.

Learn more about our marijuana bill tracker and become a supporter on Patreon to get access.
—

Meanwhile, the Virginia House this month approved a bill to protect the rights of parents who use marijuana in compliance with state law.

Under the proposal from Del. Nadarius Clark (D), possession of use of cannabis by a parent or guardian on its own “shall not serve as a basis to deem a child abused or neglected unless other facts establish that such possession or consumption causes or creates a risk of physical or mental injury to the child.”

“A person’s legal possession or consumption of substances authorized under [the state’s marijuana law] alone shall not serve as a basis to restrict custody or visitation unless other facts establish that such possession or consumption is not in the best interest of the child,” the text of the bill, HB 942, states.

Separately, the Virginia Department of Labor and Industry recently published a new outlining workplace protections for cannabis consumers.