The recreational marijuana industry in Virginia is on hold indefinitely.
It has been effectively scrapped less than two years after the state became the first in the South to legalize adult-use marijuana.
Recreational marijuana sales are not expected to begin until sometime next year.
Two years ago, the General Assembly sent former Gov. Ralph Northam a half-measure aimed at legalizing marijuana. Northam signed the bill into law in April 2021.
In addition to allowing Virginians to possess cannabis and cultivate up to four plants, the new law called for recreational sales to begin no later than Jan. 1, 2024.
The law also required the General Assembly to reenact a number of provisions of the 2021 legislation, including those that detail a regulatory and market structure, such as licensing.
After the November 2021 state election, Republicans retook control of the governorship and the House of Delegates, the lower chamber of the Legislature.
After a similar failure in 2022, observers believe GOP Gov. Glenn Youngkin's encouragement is likely to lead to the legislation needed to create an adult-use market failing during the General Assembly's short, odd-year session.
In the House of Delegates, a Republican-controlled subcommittee on Jan. 31 killed two Republican-sponsored cannabis regulatory bills, which would have set up a licensing scheme by 2024.
Earlier this month, state Senator Adam Ebbin, a Democrat, introduced a similar bill in the Democratic-controlled Senate.
According to multiple sources, Youngkin's pressure to defeat any adult-use cannabis bill played a major role in the defeats.
Meanwhile, Republicans proposed slashing nearly 70% from the Cannabis Control Authority's budget.
There is no path forward
Since Virginia's part-time General Assembly only meets in odd-numbered years, no alternative can be introduced in the state's legislative calendar.
On Saturday, Feb. 25, lawmakers were scheduled to adjourn.
Despite the General Assembly's scheduled adjournment on Saturday, former Republican lawmaker Greg Habeeb - who now represents the Virginia Cannabis Association - is not optimistic about a 2024 sales launch.
Habeeb said in an interview "I see no path forward.".
Major multistate operators that hold some of Virginia's existing medical cannabis licenses - as well as possible new market entrants - are stuck in a holding pattern until adult-use cannabis regulation is passed.
Columbia Care's vice president of public policy, Ngiste Abebe said that the company does not anticipate adult-use sales starting on Jan. 1, 2024, given the current legal and regulatory ambiguity.
It currently operates eight dispensaries in Virginia, where it is one of four companies with medical marijuana business licenses.
An ad hoc crisis
Across the state, illicit-market alternatives, including illegal storefronts and pop-ups, have replaced legal adult-use retail.
Republicans and Democrats in Virginia have both called the current situation a "public health crisis" due to the proliferation of untested products containing hemp-derived delta-8 THC.
Local prosecutors are charging the boy's mother with murder for the death of a 4-year-old boy last year caused by legally purchased delta-8 THC gummies.
In Richmond, Republican Delegate Keith Hodges, sponsor of the failed bill that would have directed the Virginia Cannabis Control Authority to develop adult-use cannabis regulations, said, "We are in a public health crisis.".
Hodges did not respond to MJBizDaily's request for comment, but he said during the hearing that the current situation in Virginia is "propping up organized crime."
Virginia allows you to possess marijuana, but you cannot purchase it legally. If we don't act, we'll have a problem. We have to protect Virginians from illicit markets."
Hodges' bill was killed a few minutes later by the subcommittee.
The point at which the buck stopped
Industry observers and lobbyists say lawmakers, such as those overseeing the Republican-controlled subcommittee where regulatory bills died over the past few weeks, received clear direction from Youngkin, a possible candidate for the Republican presidential nomination in 2024, not to advance any adult-use cannabis legislation in Virginia this year.
This was not where the governor wanted the Assembly spending its time, Habeeb said. "The governor has no interest in it."
In contrast, Youngkin wants hemp-derived cannabinoids tightly regulated.
A compromise bill was being hammered out by both houses of the General Assembly on Friday, the day before adjournment.
It's unlikely hemp regulations will address the burgeoning illicit market, including the rampant "pop-up" markets selling cannabis, critics argue.
The process is pretty straightforward, according to Trent Woloveck, chief strategy director at Jushi Holdings, a multistate operator with five dispensaries in Virginia. The governor, with his no vote, has voted yes to license cartels and organized crime in the Commonwealth of Virginia.
This allegation was not directly addressed by the governor's office.
We was directed to a comment the governor made to reporters on Jan. 25 by Youngkin spokesperson Macaulay Porter.
It's a bill that deals with hemp and delta-8 and the regulations and consumer safety surrounding these products that I'm tracking and looking for," Youngkin explained.
"Right now, we have products that are mislabeled, missold, and targeted at children. That is the bill I want to see passed, because that is what I want to sign."
Further questions were not answered by Porter.
What's next?
Habeeb, a former Republican lawmaker and current industry lobbyist, said Republicans were effectively asked to solve a problem not of their own making, since Northam and the Democratic General Assembly legalized cannabis without passing ironclad regulations.
"They (Democrats) just assumed they'd win a majority in the next election and fix the bill," he said.
That did not happen, as we all know now. So we're in a situation where Republicans - almost all of whom voted against legalization in the first place, as well as all of whom voted against Democrats' proposal to create an adult-use marketplace with social equity provisions and all those things – are being told to fix a problem someone else created.”
Similarly, Hodges and Delegate Michael Webert carried the regulatory bills that fellow GOP members tabled and are voicing the same concerns as cannabis advocates and industry lobbyists.
"If we don't regulate and tax the market we have now, our problems will only get worse," Webert said at the hearing on Jan. 31.
In the absence of another political shakeup in Richmond, it's unclear when Virginia's marketplace will open.
The General Assembly elections this November will have the biggest impact on Columbia Care's outlook for the next year. Voters can elect pro-cannabis legislators who will finish the work of legalizing cannabis in the commonwealth by electing delegates and senators.
Governor Youngkin's four-year term ends in January 2026.
It has been effectively scrapped less than two years after the state became the first in the South to legalize adult-use marijuana.
Recreational marijuana sales are not expected to begin until sometime next year.
Two years ago, the General Assembly sent former Gov. Ralph Northam a half-measure aimed at legalizing marijuana. Northam signed the bill into law in April 2021.
In addition to allowing Virginians to possess cannabis and cultivate up to four plants, the new law called for recreational sales to begin no later than Jan. 1, 2024.
The law also required the General Assembly to reenact a number of provisions of the 2021 legislation, including those that detail a regulatory and market structure, such as licensing.
After the November 2021 state election, Republicans retook control of the governorship and the House of Delegates, the lower chamber of the Legislature.
After a similar failure in 2022, observers believe GOP Gov. Glenn Youngkin's encouragement is likely to lead to the legislation needed to create an adult-use market failing during the General Assembly's short, odd-year session.
In the House of Delegates, a Republican-controlled subcommittee on Jan. 31 killed two Republican-sponsored cannabis regulatory bills, which would have set up a licensing scheme by 2024.
Earlier this month, state Senator Adam Ebbin, a Democrat, introduced a similar bill in the Democratic-controlled Senate.
According to multiple sources, Youngkin's pressure to defeat any adult-use cannabis bill played a major role in the defeats.
Meanwhile, Republicans proposed slashing nearly 70% from the Cannabis Control Authority's budget.
There is no path forward
Since Virginia's part-time General Assembly only meets in odd-numbered years, no alternative can be introduced in the state's legislative calendar.
On Saturday, Feb. 25, lawmakers were scheduled to adjourn.
Despite the General Assembly's scheduled adjournment on Saturday, former Republican lawmaker Greg Habeeb - who now represents the Virginia Cannabis Association - is not optimistic about a 2024 sales launch.
Habeeb said in an interview "I see no path forward.".
Major multistate operators that hold some of Virginia's existing medical cannabis licenses - as well as possible new market entrants - are stuck in a holding pattern until adult-use cannabis regulation is passed.
Columbia Care's vice president of public policy, Ngiste Abebe said that the company does not anticipate adult-use sales starting on Jan. 1, 2024, given the current legal and regulatory ambiguity.
It currently operates eight dispensaries in Virginia, where it is one of four companies with medical marijuana business licenses.
An ad hoc crisis
Across the state, illicit-market alternatives, including illegal storefronts and pop-ups, have replaced legal adult-use retail.
Republicans and Democrats in Virginia have both called the current situation a "public health crisis" due to the proliferation of untested products containing hemp-derived delta-8 THC.
Local prosecutors are charging the boy's mother with murder for the death of a 4-year-old boy last year caused by legally purchased delta-8 THC gummies.
In Richmond, Republican Delegate Keith Hodges, sponsor of the failed bill that would have directed the Virginia Cannabis Control Authority to develop adult-use cannabis regulations, said, "We are in a public health crisis.".
Hodges did not respond to MJBizDaily's request for comment, but he said during the hearing that the current situation in Virginia is "propping up organized crime."
Virginia allows you to possess marijuana, but you cannot purchase it legally. If we don't act, we'll have a problem. We have to protect Virginians from illicit markets."
Hodges' bill was killed a few minutes later by the subcommittee.
The point at which the buck stopped
Industry observers and lobbyists say lawmakers, such as those overseeing the Republican-controlled subcommittee where regulatory bills died over the past few weeks, received clear direction from Youngkin, a possible candidate for the Republican presidential nomination in 2024, not to advance any adult-use cannabis legislation in Virginia this year.
This was not where the governor wanted the Assembly spending its time, Habeeb said. "The governor has no interest in it."
In contrast, Youngkin wants hemp-derived cannabinoids tightly regulated.
A compromise bill was being hammered out by both houses of the General Assembly on Friday, the day before adjournment.
It's unlikely hemp regulations will address the burgeoning illicit market, including the rampant "pop-up" markets selling cannabis, critics argue.
The process is pretty straightforward, according to Trent Woloveck, chief strategy director at Jushi Holdings, a multistate operator with five dispensaries in Virginia. The governor, with his no vote, has voted yes to license cartels and organized crime in the Commonwealth of Virginia.
This allegation was not directly addressed by the governor's office.
We was directed to a comment the governor made to reporters on Jan. 25 by Youngkin spokesperson Macaulay Porter.
It's a bill that deals with hemp and delta-8 and the regulations and consumer safety surrounding these products that I'm tracking and looking for," Youngkin explained.
"Right now, we have products that are mislabeled, missold, and targeted at children. That is the bill I want to see passed, because that is what I want to sign."
Further questions were not answered by Porter.
What's next?
Habeeb, a former Republican lawmaker and current industry lobbyist, said Republicans were effectively asked to solve a problem not of their own making, since Northam and the Democratic General Assembly legalized cannabis without passing ironclad regulations.
"They (Democrats) just assumed they'd win a majority in the next election and fix the bill," he said.
That did not happen, as we all know now. So we're in a situation where Republicans - almost all of whom voted against legalization in the first place, as well as all of whom voted against Democrats' proposal to create an adult-use marketplace with social equity provisions and all those things – are being told to fix a problem someone else created.”
Similarly, Hodges and Delegate Michael Webert carried the regulatory bills that fellow GOP members tabled and are voicing the same concerns as cannabis advocates and industry lobbyists.
"If we don't regulate and tax the market we have now, our problems will only get worse," Webert said at the hearing on Jan. 31.
In the absence of another political shakeup in Richmond, it's unclear when Virginia's marketplace will open.
The General Assembly elections this November will have the biggest impact on Columbia Care's outlook for the next year. Voters can elect pro-cannabis legislators who will finish the work of legalizing cannabis in the commonwealth by electing delegates and senators.
Governor Youngkin's four-year term ends in January 2026.
