Virginia Cannabis Business Licenses
WHAT IS VIRGINIA'S CURRENT CANNABIS MARKET STATUS?
Virginia’s very new medical cannabis program officially launched in October 2020 with Dharma Pharmaceuticals opening a dispensary in Bristol. The program was originally approved in 2017, but only allowed specific cannabis oils to be recommended to those suffering with intractable epilepsy. Legislation in 2020 has changed the state’s stance on smokeable flower, likely allowing dispensaries to sell flower by the end of 2021. The medical cannabis program is expected to create $9-11 million in cannabis sales by the end of 2021, but could potentially grow up to $150 million by the end of 2025 depending on the rollout of adult-use cannabis in Virginia.
The Virginia General Assembly voted to approve the adult-use legalization bills House Bill (HB) 2312 and Senate Bill (SB) 1406 on February 27, 2021. Governor Ralph Northam requested amendments from the legislature, which voted to approve them on April 7, 2021.
WHAT ARE VIRGINIA'S CANNABIS LAWS?
Many amendments were made to cannabis laws in 2020, which will significantly shift the path of medical cannabis in Virginia. On May 20, 2020 Governor Northam signed HB 972 into law, which extended the state’s study on the effects of cannabis legalization, and prohibited criminal charges for simple possession charges with only a $35 penalty. Under the new law, which goes into effect on July 1, 2020, substances previously considered hash or cannabis are more clearly defined, and criminal records of past cannabis offenders are sealed.
Another bill Governor Northam signed into law in mid-2020 (SB 5013) gives people who have been issued summonses for cannabis possession the option of prepaying the civil penalty instead of having to go to court. A separate bill, which takes effect on March 1, 2021, prevents law enforcement from using the odor of cannabis as a pretext for searching and seizing property. Virginia laws have shown a consistent trend toward a compassionate, and caring cannabis industry that is well on its way to adult-use legalization.
Virginia’s HB 2312 and SB 1406 (which are identical) would replace cannabis prohibition with a system to legalize, tax, and regulate cannabis for adults age 21 and older. It also includes automatic sealing of low-level past cannabis offenses; establishes a social equity program to promote participation in the legal cannabis industry from those hardest hit by the war on cannabis; and dedicates 30% of tax revenue to a Cannabis Equity Reinvestment Fund.
Virginia made history on April 7, 2021 when Governor Ralph Northam approved amendments to SB 1406 and HB 2312, making Virginia the first Southern state to legalize the possession and use of cannabis by adults. The approved, recommended changes to the legislation will permit the personal use provisions of the law to take effect on July 1, 2021, rather than the enactment date of January 1, 2024 initially approved by lawmakers. Therefore, beginning July 1, 2021 adults will be permitted to possess up to one ounce of marijuana, and to cultivate up to four cannabis plants per household without penalty.
Additional amendments added by Governor Northam will allow the sealing of records related to crimes involving the misdemeanor possession of marijuana with the intent to distribute. Those records will begin to be sealed starting July 1, 2021.
A new five-member Cannabis Control Authority will be created in July 2021 to regulate the adult-use cannabis market. The number of licensees cannot exceed 400 retailers, 25 wholesalers, 450 cultivators, and 60 product manufacturers. Those numbers do not include existing medical cannabis businesses and hemp processors.
WHAT IS VIRGINIA'S CANNABIS LICENSING TIMELINE & CANNABIS APPLICATION PROCESS?
The application window for the fifth Virginia Pharmaceutical Processor license is currently closed as of December 4, 2020. There are no current open medical licensing applications in Virginia. However, initially the five licensees were permitted to open one dispensary apiece in the state, but recently approved legislation allows each company to open an additional five satellite outlets —bringing the maximum number of dispensaries in the state to 30. Virginia’s medical marijuana program is limited, allowing a maximum of 10 milligrams of THC for products, and no flower or edibles.
With the recent passage of adult-use legalization additional licenses will be available. Unfortunately, the timeline for the release of adult-use licensing applications is unknown at this time. The deadline of state regulators to enact provisions licensing commercial cannabis production and sales remains July 1, 2024. Sign up for Point7 updates to know when a new application round will be opening in Virginia.
WHAT IS THE HISTORY OF CANNABIS IN VIRGINIA?
In 2015, Governor McAuliffe signed defense bills to ensure patients using CBD and THC-A oils to treat epilepsy were protected from possession charges. Efforts for further cannabis legislation slowed until 2019 when Virginia Attorney General, Mark Herring, announced plans for cannabis legalization in the near future. A Cannabis Summit was held in December 2019 to discuss the state’s plans to decriminalize cannabis, and pathways toward legalization including the principle of social equity.
In February 2020 decriminalization efforts moved forward when the House of Delegates voted 64-34 in favor of HB 972, which decriminalizes personal possession of cannabis. The bill was signed into law in April 2020 by Governor Northam, and took effect July 1, 2020.
In the 2021 session legislators are expected to discuss further legalization paths for simple possessions through HB 87 and HB 269.
Virginia made history on April 7, 2021 when Governor Ralph Northam approved amendments to SB 1406 and HB 2312, making Virginia the first Southern state to legalize the possession and use of cannabis by adults.
DOES VIRGINIA HAVE A HEMP PROGRAM?
The Virginia Department of Agriculture and Consumer Services (VDACS) oversees and administers the hemp growing program in Virginia. VDACS is reviewing the USDA's final Hemp Production Rule published in January 2021, in order to submit a final Virginia state plan for hemp production.
VDACS will continue to operate a hemp agricultural pilot program that meets the requirements outlined in the 2014 federal Farm Bill until it can be approved by the USDA. If you plan to grow hemp in 2021, you will need a VDACS-issued Industrial Hemp Grower Registration available at vdacs.virginia.gov.
ARE YOU PREPARING FOR THE VIRGINIA CANNABIS MARKET?
With more dispensary licenses available in the near future, and a legalization bill signed by the Governor, the possibility for a thriving cannabis business in Virginia is within reach. Point7 has the products and service packages to ensure you begin the application journey timely and effectively. Contact us to discuss the early steps that can be taken prior to the roll out of the adult-use program so your team is ahead of the ball.