Virginia’s Adult-Use Cannabis Program Takes a Hit

On April 7, 2021, Virginians rejoiced as Gov. Northam (D) signed the Cannabis Control Act (CCA) into law. This law positioned Virginia to be the South’s first adult-use (i.e., recreational) state, with a Jan. 1, 2024 launch date for its first-ever retail sales. In preparation, the CCA established a framework for cannabis business licensing, cultivation, manufacturing, distribution, testing, and adult-use retail sales that would be regulated by a newly formed Cannabis Control Authority.

But there was a catch.

What Happened to the CCA During Virginia’s Budget Session?

As explained by the law firm Troutman Pepper:

“Perhaps as a compromise to encourage its passage, the bill included a provision found in Enactment 7 that stated that certain portions of the CCA “shall not become effective unless reenacted by the 2022 Session of the General Assembly.” The General Assembly, however, wrapped up its 2022 session without reenacting any portion of the CCA . . . . As a result, many of the provisions that created the structure for Virginia’s adult-use cannabis program, and the framework for regulations to be issued by the [Cannabis Control] Authority, are no longer effective. Agencies tasked with moving the program forward are currently putting their efforts on hold until after 2023.”

These adult-use provisions were slashed through the silence of Virginia’s 2022-2024 budget bill. Lawmakers would have had to clearly state their reenactment within the budget bill, HB 30, in order for the provisions to remain effective.

Some stakeholders argue that the changes made through HB 30 will only result in strengthening the stranglehold of Virginia’s unregulated cannabis market, which puts minors and consumer safety at risk. Many of these same stakeholders attribute the step backward to newly instated Gov. Glenn Youngkin (R).

On July 2, 2021 (the day after the CCA went into effect), Gov. Youngkin’s campaign team made a statement via Twitter that, should he win, “Glenn Youngkin will not seek to repeal [the CCA]; his focus will be on building a rip-roaring economy with more jobs and better wages, restoring excellence in education, and reestablishing Virginia’s commitment to public safety.”

Gov. Youngkin’s track record since taking seat as governor contradicts this assertion. For example, during this year’s April vet session, the governor sought to replace the CCA’s possession limit by recriminalizing the possession of up to 2 ounces of cannabis. This proposed change was blocked by Virginia’s House of Delegates.

According to JM Pedini, NORML’s development director and the executive director of Virginia NORML, “Governor Youngkin’s actions are in direct conflict with his campaign promise to not roll back legalization and they are out of touch with the opinions of the majority of Virginians. . . . This administration has made no effort to establish a legal adult-use cannabis market or to ensure that all cannabis products sold in the Commonwealth are accurately labeled and regulated for consumer safety.”

What Activities Are Still Permitted Under Current Virginia Cannabis Law?

There’s no doubt about it: Virginia’s adult-use cannabis program took a major hit—but not all is lost. Virginia’s remaining cannabis laws and regulations:

• Keep Virginia’s medical cannabis program intact. In fact, effective July 1, 2022, medical cannabis patients, parents, and legal guardians are no longer required to register with the Department of Health’s Board of Pharmacy. However, “A Written Certification for the Use of Medical Cannabis from a Registered Practitioner for Medical Cannabis is still required and must be presented at the dispensary, along with a government-issued ID, to obtain medical cannabis products.”
• Allow home cultivation of up to four cannabis plants for personal use. This limit applies to each household—not each person within the residence. Each plant must have a “tag” that includes the [grower’s] name, driver’s license or ID number, and a notation that the marijuana plant is being grown for personal use as authorized by law.”
• Permit adults over the age of 21 to possess up to 1 ounce of cannabis on one’s person or in any public place. Possession of more than 1 ounce of cannabis, but less than one pound, will be subject to a $25 civil penalty. Beyond one pound, violators will face more significant fines and potential jail time. Newly instated Gov. Youngkin (R) remains silent while numerous legislators speak out in disapproval of making these changes through the budget process. Sen. Jennifer McClellan (D-Richmond) stated, “. . . new criminal penalties that did not go through a full process . . . but a handful of people that didn’t include a single member of the legislative Black Caucus deciding new criminal penalties going forward, with no real opportunity for public input, is concerning.”
• Allow adults over the age of 21 to consume cannabis in a private residence. Owners of a private residence can still prohibit cannabis consumption on their premises.
• Permit “Adult Sharing.” This means that adults aged 21 and up can transfer up to 1 ounce of cannabis between one another without punishment. It must be noted that Virginia law explicitly prohibits D.C.-style “gift” transactions.
• Maintain some but not all social equity measures. Social equity in licensing—provisions designed to prioritize cannabis business licenses for groups that have been disproportionately impacted by the war on drugs—have been scratched along with the rest of the CCA’s adult-use licensing framework. However, two important provisions still remain: the creation of a Cannabis Equity Reinvestment Board and a Cannabis Equity Reinvestment Fund.
• Create a New Cannabis Control Authority. This new regulatory agency has been authorized to develop rules and regulations for Virginia’s future adult-use program. The “Authority” has started meeting (meetings are listed on the Commonwealth Calendar for those who would like to observe and/or participate), but the majority of action has been delayed until 2023 or later as members wait for new state cannabis statute(s) to work from.
• Police cannot search or seize any person, place, or thing solely because they smell cannabis, and former cannabis offenses are automatically expunged. These provisions are designed to ensure that state resources are not being used to criminalize cannabis use or possession, which is proven to result in communities of color being disproportionately targeted for criminal penalties. The criminalization of these communities results in generational impacts that include but are not limited to barriers to education, banking, and basic health needs.

What’s Next for Adult-Use Cannabis in Virginia?

Lawmakers’ failure to reenact the majority of provisions in the 2021 CCA meant a significant blow to Virginia’s planned adult-use program, which had been intended to launch on Jan. 1, 2024.

Virginians and industry stakeholders are now left wondering if the General Assembly will draft a new adult-use statute that maintains the 2024 start date; whether the same number of cannabis businesses will be licensed throughout the state; if medical dispensaries will receive a head-start on adult-use sales; and whether municipalities will still be able to prohibit cannabis sales in their locality through a referendum process.

Basically: Will legislators use the CCA’s 2021 version as its starting point, or will it approach drafting a new adult-use program as working from a blank slate?

As stakeholders, lobbyists, and state representatives work behind the scenes throughout this 2022-2024 budget period, the rest of us will have to wait and see.