Virginia working group identifies issues for marijuana legalization

A working group appointed by Virginia Gov. Ralph Northam has outlined a series of issues that need to be addressed if the state legalizes marijuana. 

The Virginia Marijuana Legalization Work Group was mandated by legislation decriminalizing marijuana enacted earlier this year. In November, Northam said he supports legislation in the upcoming General Assembly to legalize marijuana and set up a system for a commercial marketplace. 

According to the working group report, released Nov. 30, a marijuana industry in Virginia could be worth $698 million to $1.2 billion annually in economic activity and up to $274 million in tax revenues per year when the industry matures, which could take at least five years after legalization. Setting up a regulatory structure, however, will require a significant upfront cost. 

The working group agreed on the following policy recommendations: 

Regulatory structure – Virginia should consider either putting its cannabis regulatory structure under one agency or an umbrella structure to cover both adult-use and medical marijuana. 

Industry structure – Virginia should consider allowing but not requiring vertical integration within the industry. That could cover every step from growing marijuana to retail sales.

Licensing structure – Virginia should consider a license structure that includes various steps of the industry supply chain: grower, processor, distributor/transporter, wholesaler, retailer, delivery, and social consumption/hospitality. 

Virginia should consider a “social equity license category” like other states, such as Illinois and Massachusetts, have done. That could give a priority to license applicants in communities historically harmed by the criminalization of marijuana. 

Related story: Virginia governor supports marijuana legalization

Taxation – Taxes at the retail level should be considered. A tax rate should be high enough to cover the costs of the program to provide consumers with certainty that products are regulated and safe to consume but not be so high that it encourages a thriving illicit market.

Other regulatory structural considerations – The state should look to other agencies, such as the Board of Pharmacy and Alcoholic Beverage Control, for guidance on how to best organize a new agency to regulate the marijuana industry. 

Banking – Virginia should explore options to allow the marijuana industry to conduct business with financial institutions, including state-chartered banks and credit unions.

Social equity – Undoing the harms of criminalization should include expungement or sealing of criminal records, social equity licenses, assistance with access to capital and business planning, consideration of how the entire regulatory scheme could affect barriers to entry into the industry, and community reinvestment and monitoring.

Local control – When possible, local input should be considered regarding where marijuana retailers and social consumption sites can operate. Virginia should also consider how businesses could cluster in certain areas or neighborhoods.

Product regulation – Virginia should consider regulating the composition of products, including cannabinoid limits, limits for serving sizes and whole products, and product composition safety measures, such as pesticide residues and other adulterants. Virginia should also consider tamper-resistant packaging. 

Personal cultivation –Limits on personal cultivation should be considered, because this product is much valuable more than beer, which can be produced in home settings. Also, there is an element of personal danger and risk because of the electrical and insulation needs for growing marijuana indoors.

Impaired driving – Virginia should explore new technologies and methods to determine the impact of marijuana on driving. 

Related story: Medical cannabis dispensary serving Northern Virginia opens this week in Manassas

Impairment and employment – Workplace safety is paramount, but Virginia should consider how policies could affect adults who are using a legal product.

Health impacts – Virginia should begin collecting baseline data on the health benefits and risks of marijuana use before the legal market opens.

Consumer education and product safety – Virginia could require child-proof, tamper-evident packaging.  

THC levels – Because high amounts of THC could make individuals more susceptible to substance use disorder. Virginia could adopt per-dose/per-serving/per-package THC limits. Virginia could consider a tiered tax system with higher taxes for higher-potency products. 

Cannabis use disorder – Tax revenue should be used to invest in substance use disorder treatment and recovery services. 

Youth impacts – Virginia could require mandatory ID checks and increase youth-focused prevention efforts in communities and schools. The state could also require age-appropriate marijuana education, invest in supports and education for individuals age 21-26, limit proximity of marijuana retailers to schools, and minimize marketing to youths.

Prevention and education – Virginia could implement public health campaigns to highlight the negative implications of marijuana use by people at risk for substance use disorder or those who are pregnant or have certain mental health conditions.

Health equity – Reform should address and, where possible, undo the harms of criminalization. This could include preventing the concentration of dispensaries in low-income neighborhoods and target investment to those who are experiencing the inequities of past criminalization of marijuana.

Clean Indoor Air Act – Marijuana laws should be consistent with Virginia’s policies on tobacco.