Gov. Abigail Spanberger and state Democrats on Tuesday outlined a deal they struck to create a retail cannabis market in Virginia — a proposed plan that would start legal recreational weed sales on July 1, 2027.
The agreement adds language in the state's two-year spending plan for a cannabis market framework. It allows for up to 350 licenses for businesses, but not all at once, and increases the state's marijuana possession limit from 1 ounce to 2 ounces.
Just a month ago, Spanberger's compromise with state Sen. Lashrecse Aird (D–Henrico) and Del. Paul Krizek (D–Fairfax) appeared unlikely due to their divisions over how to set up a cannabis marketplace.
Spanberger's veto of Aird and Krizek's cannabis market bills seemed to doom Virginia's chances of having a retail cannabis market sooner than later, but a deal emerged after weeks of negotiations.
"We all wanted to deliver a marketplace that the commonwealth could implement effectively for the long term," Spanberger said Tuesday alongside Aird and Krizek. "We have always had this same end goal, an end goal that has been years in the making."
Though the budget needs to be finalized for the compromise to become a reality, the deal likely marks the end of Virginia's wait for retail recreational marijuana.
How did Virginia get here?
Since July 2021, people 21 and up have been allowed to use marijuna recreationally in Virginia but haven't had a way to legally buy it. If you have a license, you can buy cannabis for medical purposes.
Attempts to change that were either blocked or vetoed by Republicans before Spanberger's time in office.
In March, the Democrat-led General Assembly passed legislation from Aird and Krizek on a nearly party line vote and sent it to Spanberger; their plan would've implemented retail weed by Jan. 1, 2027.
The governor had her own ideas for the marketplace and proposed a substitute bill that lawmakers had to either approve as-is or reject.
Lawmakers didn't even consider Spanberger's cannabis market revisions, forcing her to sign the bills from Aird and Krizek, veto them or let them become law without her signature.
And on May 19, Spanberger vetoed the legislation — raising concerns that Virginia would have to wait until July 2027 (or longer) for legal retail cannabis.
What's in the agreement?
On Tuesday, Spanberger said both sides "began talking in earnest about how to get this bill over the finish line" after her May substitute proposal.
The tenor of Tuesday's press conference at the Patrick Henry Building was celebratory, a far cry from Aird and Krizek's shared response after Spanberger's veto: "This veto and its consequences belong to the governor and governor alone."
"This is what good governing and collaboration looks like, bringing people together, listening carefully, focusing on solutions that are practical, enforceable, and in the best interests of Virginians," Spanberger said Tuesday.
Aird and Krizek laid out specifics about what they came up with, while acknowledging the final plan didn't include everything they had hoped. However, Spanberger said the compromise did accomplish her policy and enforcement "goals."
Ahead of the start of legal recreational sales in July 2027, the Virginia Cannabis Control Authority would start accepting license applications from businesses on Feb. 1.
Retail cannabis stores must be at least 1,000 feet from schools, hospitals, playgrounds and drug treatment facilities, according to the agreement.
Similar to the initial bill that Spanberger vetoed, the compromise sets a 6% state cannabis tax, and would allow localities to adopt an additional 1%–3.5% local tax. Under the deal, the state tax would rise from 6% to 8% after July 1, 2029.
According to the governor's office, tax revenue from cannabis sales will be directed toward early childcare and education, K-12 education and drug abuse prevention and treatment programs.
Money will also go into the Cannabis Equity Reinvestment Fund, which supports people "historically and disproportionately targeted and affected by drug enforcement" and awards grants to businesses. In Spanberger's substitute legislation, cannabis sale revenue directed to this fund was removed.
"A safe, regulated retail market is not just about legalization," Aird said Tuesday. "It is about public safety, consumer protection and, finally, giving Virginians a legal marketplace that can compete with and displace the illicit market."
The compromise includes conditions that each side wanted and didn't want.
It doesn't include some of the criminal penalties that Spanberger proposed, many of which Aird and Krizek described as going too far.
One removed provision was Spanberger's proposal to make it a Class 2 felony — which comes with a sentence of 20 years to life imprisonment — for illegally transporting at least 50 pounds of cannabis "or equivalent amount of marijuana products" into Virginia to sell or distribute.
The agreement does increase the penalty for public consumption starting in July 2027, raising it from a $25 fine to a $250 fine. Aird said that delaying the increased penalty would offer a potential path toward future changes.
"I believe that leaves us an opportunity to continue to assess the type of impact that could have and give us enough cushion to pivot if necessary," Aird said about the public consumption penalty.
Chelsea Higgs Wise, executive director of the Richmond-based nonprofit Marijuana Justice, called the compromise "a meaningful step forward for Virginia." But Wise said that increasing the fines for public consumption is a major concern, adding that these penalties "have historically fallen hardest on Black, Latino and low-income Virginians."
Krizek said that the deal keeps a pathway for microbusinesses trying to get into the legal weed industry.
"It includes the authority to issue up to 100 microbusiness licenses by May 1, 2027," Krizek said. "Microbusinesses are essential because they help prevent the market from being dominated solely by the largest and best capitalized ventures."
According to the governor's office, the CCA would assume oversight of industrial intoxicating hemp-derived products, such as delta-8,from the Virginia Department of Agriculture and Consumer Services.
The authority would also be allowed to have a public licensee registry and set up a tip line for anonymously reported concerns of alleged illicit practices.
The CCA will be able to create escalating penalties for businesses that fail to properly do ID checks and can revoke licenses for repeated underage sales.
The compromise also bans cartoon advertisements and products sold in the shape of animals, fruits, vehicles or humans.
Aird and Krizek's compromise with Spanberger establishes retail weed sales on July 1, 2027.
What's next?
In order to get the proposal past the finish line, legislators still need to agree on a budget plan for Spanberger to sign. But the state budget hasn't been finalized yet, because of an impasse over the state's sales tax exemption for the data center industry.
Senate Finance Chair L. Louise Lucas (D–Portsmouth) is pushing to end the tax breaks, but the House wants to keep it in place.
Lucas, who has clashed with Spanberger over the budget and other issues, is one of the sponsors on the Senate's cannabis market bill.
"I have no idea what their compromise is," Lucas told reporters after Tuesday's Senate Finance meeting.
She added that the Senate has a placeholder for the cannabis framework to be included in the budget, "but haven't done it yet."
Senate Minority Leader Ryan McDougle (R–Hanover) on Tuesday told reporters that he's against adding major policy initiatives into the budget.
"I'm not in favor of the retail market of marijuana in general, but doing significant policy through the budget is not a good plan," he said.
Aird and Krizek said at Tuesday's press conference that they expect changes to be made after the budget is ultimately signed.
Wise, with Marijuana Justice, said that advocates will work to make sure that the cannabis market framework doesn't undermine equity in Virginia.
"But overall, we are extremely pleased to see how the administration has met our values and that the conversation continues," she added. "This is a moment for celebration then back to work."
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