How Could a Politically Divided Government Affect the Regulation of the Sale of Marijuana in Virginia?
By M. Jarrad Wright
Last year, the Commonwealth of Virginia became the first state in the deep south to legalize marijuana. While legalization was relatively easy, regulating the manufacture and sale of marijuana is proving to be more difficult. The legalization law contained various plans for government agencies, tax schemes, and permitting that is to go into effect by 2024. However, in a compromise to ensure passage of legalization, the General Assembly included language in the bill requiring a future approval of the plan after more study and consideration after the November 2021 elections. Of course, the Republican takeover of the Virginia House of Delegates and the Governor’s mansion in Richmond and a Democrat controlled state Senate means that divided government is now the norm in Virginia. How that divided government will impact the regulation of the sale of marijuana is now at the forefront of Virginia politics.
The primary question of whether the Republican House majority would attempt to repeal legalization was answered quickly after the election when House members indicated that they would not try to recriminalize marijuana, and instead, they would attempt to speed up the long-time table for setting up the regulatory mechanisms. In fact, news reports out of Richmond have indicated that lawmakers on both sides share this goal and share the goal of getting rules in place quickly to lower the chance of an illegal black market undercutting legal sales and tax revenue.
However, the devil is in the details, and the details of marijuana regulation are being fought in the General Assembly. At this time, Republican law makers have filed at least eight bills to amend the original statute in order to alter the regulatory scheme. This includes bills that would redirect marijuana sales revenue from a cannabis equity reinvestment fund to the general fund and other priorities and includes provisions that would eliminate any consideration for giving licenses based upon social or equity concerns in favor of to people living in economically distressed areas and for persons who have previously legally grown hemp. Other amendments involve the tax rate to apply to sales.
At the time of original passage, supporters of the legalization bill touted the regulatory structure as a means of correcting historical injustices on certain communities, including people disproportionately impacted by marijuana criminalization laws. However, that bill passed on party lines, and the new compensation of General Assembly, a new Republican governor, and a bill that requires reenactment before it takes effect guarantees that changes to the bills structure will occur and that new priorities may be emphasized. Ultimately, it is still early in the legislative process, and the final position of each party, and individual members, remains unknown. That said, both sides want to proceed so the chance for compromise remains. In the meantime, businesses that may be impacted by the legalized sale of marijuana should continue to monitor the legislative session as important updates are likely to occur this year.
If you have any questions or comments on this article, contact Jarrad Wright at jwright@dimuro.com.
