Divided government has sunk the chances for a regulated market to sell marijuana in the Old Dominion, at least for now. Last year when the General Assembly and the Governor’s mansion was controlled by the Democrat Party, Virginia took the historic step of legalizing marijuana. While the legalization is permanent, the mechanisms setup by the General Assembly to regulate sales, to regulate licenses, and the taxing scheme is not permanent. At the time, the General Assembly quickly pushed through legislation on a party line vote but included a reenactment clause in which the next General Assembly would have to revote on the sales and taxing structure before it could become permanent. However, since that time, Virginia elected a new Republican Governor and a Republican House of Delegates which has complicated those plans.
What’s the Hold Up?
The reenactment clause in the original marijuana legislation means that marijuana legislation is different from other recent changes that passed when the Democrats controlled the entire government. In those cases, a Democrat controlled Senate could block any attempts by Republicans to undo the law, but marijuana sales can only become regulated if all side cooperate. But that was not the end result.
While both sides have publicly stated that they wanted to move forward with legal sales, the Republican controlled House did not pass its own legislation about marijuana, and by the end of the session, decided to table the Senate’s version. Proponents of passing a bill had wanted quick passage of a bill and argued that not acting would allow a black market to form, and some opponents argued that the bill was too complicated to rush. Ultimately, no action occurred.
Legal Limbo for Pot Sales.
The upshot is that while marijuana remains legal because the reenactment clause did not apply to that side of the bill, the mechanisms for actually selling marijuana legally remain in legal limbo. Important questions such as what tax rate will apply, what tax revenues will be used for, and who will be prioritized to get dispensary licenses remain. Virginia business are now left guessing what the answers to these and a myriad of other important business issues involving marijuana until next year, unless a special legislative session is called.
Criminal Sentences Remain In Place
Gridlock also doomed a Senate Bill that would have allowed judges to reconsider the criminal sentences of individuals convicted of marijuana-only related offenses after the Senate bill died in the House Appropriations Committee. While some members of both sides of the isle have expressed support for such legislation, disputes over whether studies should occur and whether such legislation should be part of the larger marijuana bill persisted.
New Limits for Delta-8 Products
The House and Senate did come together to restrict the sale of products containing the chemical Delta-8 by redefining that chemical as marijuana. Marijuana sales can only be done through dispensaries, despite the regulatory structure not being in place. Delta-8 is a chemical that can be synthetic or natural and it is hemp and a variety of other products. The bill was passed by both chambers with overwhelming support, and if signed by the Governor, will make it illegal for non-licensed stores to sell products with high levels of Delta-8. In particular, only licensed retailers could sell products that are less than one milligram per product. Moreover, the doses that are allowed would only be allowed to sell to those that are 21 and older.
The immediate impact would be prohibiting many current retailers from selling products containing Delta-8 that are currently on shelves because of mislabeling and because they would be over the legal limit. Finally, the same bill prohibits the retail sale of marijuana products that depict or are in the shape of a human, animal, or vehicle. The intent of this provision eliminates shapes that appeal to children.
Bottom Line: It’s Complicated
The bottom line is that while marijuana remains legal in Virginia, the regulatory environment is becoming increasingly complicated. Virginia businesses and those in industries impacted by the new marijuana laws will need to continue to closely monitor legislation for at least another year in order to learn what will and what will not ultimately be allowed.