Virginia House And Senate Leaders Work To Achieve Marijuana Sales Legalization ‘Compromise’

A Virginia House panel has delayed its consideration of a Senate-passed marijuana legalization bill in order to give backers of two competing legal sales proposals that were approved in votes on the floor of their respective chamber more time to hammer out a compromise.

As a House General Laws subcommittee began discussion Tuesday of the Senate bill—SB 448 from Sen. Aaron Rouse (D)—the sponsor of a separate House measure announced that the two camps are now actively crafting a deal.

“We’re working with Sen. Rouse right now on coming up with a compromise retail cannabis bill,” said Del. Paul Krizek (D), sponsor of HB 698 and the chair of the House General Laws Committee. “To that end, we would like to have a motion to pass by for the week.”

Members approved the motion without further debate. Reached after the vote, Krizek told Marijuana Moment that stakeholders are scheduled to come together on Thursday to discuss a compromise bill. That measure could be taken up as soon as Friday in a Senate committee, he said, and as soon as next Tuesday in his House panel.

“What we want is consensus,” he said. “We want to be all on the same page.”

At this point in the legislative session, the House of Delegates and Senate have each passed a legal sales bill and sent it to the opposite chamber. Despite broad similarities, however, the measures differ on some key matters, including licensing and launch timelines, social equity, tax rates and whether marijuana could be grown outdoors.

Advocates told Marijuana Moment they expect the Senate Rehabilitation and Social Services Committee to take up the compromise bill at a hearing later this week.

“I’m really excited for there to be a compromise bill this week and possibly even be heard in Senate Rehab on Friday,” said Chelsea Higgs Wise, executive director of the group Marijuana Justice. “I believe that the goal is to create a proper compromise.”

While it’s not yet clear how negotiations will shake out, Wise says she’s expecting the focus to be on matters such as social equity, outdoor cultivation and the start date for legal sales—some of the biggest sticking points between the two bills.

“We’ve seen both patrons stand really firm on certain points,” she noted. “In the Senate, Rouse is very determined for everyone to start at the same time. And Del. Krizek is very determined to include meaningful equity. I’m hoping that we can find a way to please both patrons and make it make sense for what we’ve promised Virginia.”

Krizek said in an interview that the goal is to strike a deal sooner rather than risk having to send the legislation to a bicameral conference committee later in the session.

“Certainly the idea here is we are negotiating to come up with a consensus bill that both the House and the Senate can approve and we can avoid going into conference,” he said. “The most important part for my caucus—for the House caucus—is going to be on making sure the bill recognizes the decades of harm done to African American communities by the so-called war on drugs.”

Here are some of the key ways the two bills differ in their approaches to regulated cannabis sales:

• Priority licensing: The House bill would allow some licensees to open sooner than other applicants. Specifically, it would let medical marijuana operators, up to 60 equity-focused microbusinesses and up to five hemp businesses to begin legal sales on January 1, 2025, while other operators would have to wait until July 2025 to obtain licenses. The Senate bill, by contrast, would not allow any group of retailers to have an early start on sales.
• Timing: Under the House bill, some retailers would be able to open retail marijuana stores on January 1, 2025, with licensing of eligible businesses beginning in July of this year. Licensing of other retailers, however, would not begin until July 2025. The Senate bill would also begin licensing stores as soon as July of this year but would not allow retail sales to begin until after January 1, 2025.
• Social equity: Both bills have provisions that provide some advantage to people from so-called “historically economically disadvantaged areas” that have been disproportionately policed for marijuana in the past. But the House measure includes specific provisions that would prioritize licensing of people with past cannabis convictions, as well as their family members. The House measure would also provide $400,000 in startup capital, as well as other business support, to each of 30 equity-owned microbusinesses. Medical marijuana providers would be required to pay those funds to microbusinesses in order to be eligible to open for sales in January.
• Tax rates: The House bill would tax marijuana at a rate of up to 9 percent, split between state and optional local taxes. The Senate bill would create a maximum tax rate of nearly double that—17.5 percent—which would consist of a 12.5 percent state excise tax, up to a 3.5 percent local tax that municipalities could impose and the 1.125 percent portion of Virginia’s sales tax that funds K–12 education.
• Outdoor cultivation: Outdoor grows would be banned entirely under the House bill, while the Senate bill would allow smaller cultivators to grow outdoors. Larger grows under both bills would be required to be indoors.
• Criminal penalties: Justice reform advocates had preferred the House bill over the Senate’s ever since the Senate version was amended to include a mandatory minimum penalty in some cases. That provision has since been removed, however. Currently both measures create new criminal charges for marijuana-related activity, but the House bill contains more restrictive language and more severe penalties in some cases.

Despite the differences, Krizek told Marijuana Moment he’s optimistic supporters can reach a deal.

“Sen. Rouse is working to achieve pretty much the same goals is as we are, which is really to combat the illegal cannabis market,” he said. “We’re in a good place. We’re working towards that consensus.”

Rouse’s office did not respond to Marijuana Moment’s multiple requests for comment.

Use, possession and limited cultivation of cannabis by adults is already legal in Virginia, the result of a Democrat-led proposal approved by lawmakers in 2021. But Republicans, after winning control of the House and governor’s office later that year, subsequently blocked the required reenactment of a regulatory framework for retail sales. Since then, illicit stores have sprung up to meet consumer demand.

Jason Blanchette, president of the Virginia Cannabis Association, told Marijuana Moment he’s been working for nearly two years to bring about legal sales. Now he feels the reform is closer than ever.

“We’ve never been this far,” he said after Tuesday’s subcommittee hearing, saying the push for retail cannabis “is in a pretty good place.”

“I don’t think there’s been any lines drawn in the sand. I think that’s a perfect place for us to be right now,” he said of negotiations among supporters. “The stakeholders are all trying to come to consensus, and I’m very positive that we will get there.”

Even if the legislature does pass a consensus legalization bill this session, it will still have to get past Gov. Glenn Youngkin (R), who has sent mixed messages around legalization. While the governor has not explicitly said he’ll veto a retail marijuana bill, he signaled last month that he doesn’t have “any interest” in legalizing sales under the Democrat-led plans.

When he was first elected, however, Youngkin said he was “not against” allowing commercial sales categorically.

JM Pedini, development director for the advocacy organization NORML and executive director of the group’s Virginia chapter, told Marijuana Moment that as negotiations on legal sales proceed, supporters will need to craft a proposal that is palatable to Youngkin and GOP lawmakers.

“Hopefully, the compromise will be able to garner bipartisan support,” Pedini said. “A bill that passes without any Republican votes is as good as dead on arrival at Gov. Youngkin’s desk.”

Asked about the possibility of a veto, Krizek said his job is to craft the best possible legislation, not concern himself with how the governor might receive it.

“I don’t craft bills based on what I think the governor is going to do,” he said. “All I can do is try to craft the best legislation possible and hope that it’s compelling enough that the governor would would either sign it or…just let it become law.”

“We have a serious situation where we have a $2 billion or $3 billion illegal cannabis market, right? And we have an opportunity to change the paradigm,” he added. “We can achieve public safety and equity together, I don’t know that the governor is necessarily against that.”

If Youngkin does veto a legal sales bill, however, Krizek said he’ll push the issue again next year.

“Yes,” he told Marijuana Moment.” I will keep bringing this back until we pass a bill that does what we’re trying to do.”

A sales bill did advance through the Democratic-controlled Senate last session, but it stalled in committee in the House, which at the time had a GOP majority.

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Photo courtesy of Philip Steffan.