Virginia Likely to Legalize Adult-Use Cannabis

Last week, Virginia’s Senate and House of Delegates have both passed legislation legalizing adult-use cannabis (S.B. 1406 and H.B. 2312, respectively), and Governor Ralph Northam has indicated he will sign the final legislation into law.  Common elements in both bills include:

• Legalize possession of up to one ounce for individuals 21 and older
• Households may cultivate up to four plants, of which at most two plants can be mature
• Expunge many cannabis-related convictions
• Provide for a 21% retail tax, as well as empower localities to levy an additional 3% tax
• Establish the Virginia Cannabis Control Authority in order to regulate sales, cultivation, and manufacture of cannabis products
• Appropriate the largest portion of cannabis-related tax revenue to fund preschool for at-risk children.
• Commence retail sales starting January 1, 2024

However, there are some differences between the Senate and House bills.  The Senate bill legalizes possession effective July 1, 2021, whereas the House bill does not legalize possession until the regulated market is established.  Further, the Senate bill allows for localities to ban retail stores.  In contrast, the House’s bill allows localities to designate where retail locations can be opened but does not allow for localities to outright ban retail establishments.  It is anticipated that these differences will be reconciled, which is necessary before a bill can be delivered to Gov. Northam for his signature.  We will continue to monitor any developments and analyze future developments.