The Case for Cannabis

With Democrats in power, legalization of marijuana has become a reality. What does a new study say about how it might play out?

Gov. Ralph Northam says he’ll propose the legislation himself.

Members of the House of Delegates expect it to pass.

In the Senate, legislators give it “slightly better than 50-50 odds.”

Bills to legalize recreational marijuana in Virginia are set to get their first serious hearings when the General Assembly convenes in January and, at least for now, it looks like there’s a decent chance they could succeed.
“We are going to move forward with legalizing marijuana in Virginia,” Northam told reporters last week. “I support that and am committed to doing it the right way.”

The movement in Virginia comes after voters in four states overwhelmingly approved referendums legalizing marijuana, bringing the total nationwide total to 15. If lawmakers in Virginia move forward, the state would become the first in the South to authorize recreational use of the drug.

Virginia has been slowly loosening its stance on marijuana for years, first allowing medical use of CBD in 2017, expanding that to a full-fledged medical marijuana program by 2019 and, earlier this year, passing legislation that reduced the penalty for people caught with small amounts of the drug to a $25 civil fine.

But to date, no proposals to fully legalize and regulate adult use of the drug have made it to the floor of either chamber in the General Assembly despite rapidly shifting public opinion in favor of the measures.

The outcome was unsurprising when the General Assembly was controlled by Republicans, many of whom opposed efforts to expand access to the drug. But some Democrats eager to move past prohibition after winning majorities in the House and Senate last year were disappointed when their colleagues voted down their own legalization bills.

Democrats framed decriminalization – and now legalization – as an important step to end disparate enforcement of drug laws on Black Virginians, who have been prosecuted at significantly higher rates despite studies showing they use the drug at roughly the same rate as their white counterparts.

But Democratic leaders, including Northam, said last year that it would be irresponsible for the state to move straight to fully legalizing the drug without first studying how other states have approached the issue. To that end, lawmakers requested two studies reviewing potential regulatory models and tax schemes when they approved decriminalization in March.

The first of those studies, conducted by conducted by the Joint Legislative Audit and Review Commission., known as JLARC, came out last week. A second, undertaken by Northam’s administration, is due by the end of the month.

Benefits and considerations

The commission’s review found that legalization could generate more than $300 million per year in tax revenues by the fifth year of operations and, combined with decriminalization, could reduce marijuana arrests by 84 percent. Legalization could also create more than 11,000 jobs, the study found, but most would be lower-paying positions in retail, cultivation, packaging and security.

If Virginia chooses to legalize adult use of marijuana, it would likely take at least two years to put a regulatory structure in place and begin licensing companies to operate in the state, the study found.

JLARC staffers wrote that very few people are jailed solely for marijuana possession, but that 120,000 Virginians might benefit if the General Assembly paired legalization with a one-time expungement of pot charges that wouldn’t be crimes anymore. More than half of those people would be Black Virginians, who have been 3.5 times more likely to be arrested for marijuana possession than white Virginians, according to the study, which noted no significant differences in usage between the two groups.

The study outlined numerous steps Virginia policymakers could take to promote social equity, including giving preferential consideration for minority entrepreneurs and workers from communities that have been disproportionately affected by drug prohibition. Preventing a vertically integrated industry dominated by large, well-established marijuana companies, the study suggested, could also promote opportunities for Virginia-based small businesses.

“As new states legalize, your homegrown businesses, pardon the pun, are going to be competing against these businesses that are big, multi-state operators,” says commission legislative analyst Mark Gribbin.

Another important element lawmakers would have to work out is what level of control local governments should have over allowing legal marijuana sales in their communities. Virginia law allows localities to ban liquor sales, and lawmakers could choose to do the same with marijuana.

“It is still a controversial issue,” Gribbin says. “And even people who support legalization for criminal-justice reasons may not be supportive of a commercial market.”

The study did not recommend whether Virginia should or shouldn’t legalize marijuana.

“The mission of this particular study was not to decide whether Virginia should legalize marijuana,” says Del. Ken Plum, D-Reston, the chairman of the commission. “The question was: If Virginia decided to legalize marijuana, what should be the considerations?”

Lawmakers, particularly in the House of Delegates, have made clear they expect bills to move forward. “It’s high time we actually make this change and I think other people have seen that as well,” says Del. Mike Mullin, D-Newport News, who chairs the House’s criminal law subcommittee and says he believes there are enough votes in the chamber to end prohibition of the drug. “I can tell you I think it will pass.”

Odds of passing the House and Senate

Northam’s administration and lawmakers say they haven’t made any decisions yet on precisely how they favor structuring the state’s market. But Northam said Virginians can expect an emphasis on public health protections and social equity.

“Marijuana laws have been based originally in discrimination and undoing these harms means things like social equity licenses, access to capital, community reinvestment and sealing or expunging people’s prior records,” he says.

In the House, Majority Leader Charniele Herring, D-Alexandria, agreed with Mullin that a legalization bill could clear the chamber. But she also cautioned that members wouldn’t rush a bill through. “I can’t say that it’s definitely going to happen if members don’t feel comfortable with the proper regulatory construct,” she says.

Like Northam, she said she’ll be focused on is making sure the population most impacted by prohibition – Black Virginians – has an opportunity to participate in any new industry. The commission’s report notes other states have had difficulty setting up social-equity programs and that the state likely would face legal challenges if it set aside licenses or other incentives based on race. Instead it suggests targeting people impacted by enforcement by giving preference or extra support to applicants who have been charged with marijuana violations in the past and live in areas where there were high rates of marijuana arrests.

To give people who fit the criteria a leg up, the report suggests the state could offer discounts on licensing fees, access to capital and mentorship.

In the Senate, where Democrats hold a narrower 21-19 majority, the bigger question is whether the basic concept will be able to muster enough support to pass.

Senate Majority Leader Dick Saslaw, D-Fairfax, has said in the past that while he backed decriminalization, he wasn’t certain he would support legalization. In a phone interview this month, he said he is open to the idea. “I’m willing to listen,” he said. “I want to hear what both sides have to say.”

He put the odds of passage at “slightly better than 50-50,” an assessment shared by Sen. Adam Ebbin, D-Alexandria, who proposed the decriminalization legislation earlier this year. He plans to sponsor a legalization bill in January with Sen. Jennifer McClellan, D-Richmond.

Sen. Creigh Deeds, D-Bath, who chairs the chamber’s criminal law subcommittee, says he’s withholding judgement until the studies are delivered, but hadn’t expected to take the issue back up again so soon after decriminalization. “I’m not opposed to the idea,” he says. “I just want to do it right.”

While Democrats make up the bulk of support, any votes on the issue are unlikely to fall strictly on party lines, said Jenn Michelle Pedini, executive director of Virginia NORML, the state chapter of the National Organization for the Reform of Marijuana Laws, which has led lobbying efforts on the bill and noted that about a dozen Republicans backed decriminalization.

Ebbin says that, whatever the outcome next year, it’s clear Virginia is on track to move forward sooner than later.

“I think it’s pretty clear that the people expect this to happen eventually,” he says.

Eight policy decisions facing lawmakers with marijuana legalization

As lawmakers begin to seriously consider what a legal marijuana market might look like in Virginia, here’s a preview of some of the looming policy decisions identified by Virginia’s Joint Legislative Audit and Review Commission, which recently released a 200-page report on the issue.

1. Should past weed convictions be expunged?

Uneven enforcement of marijuana laws has been a primary driver in the push for legalization here. The report’s authors found Black Virginians were 3.5 times more likely to be arrested for simple possession than whites despite using the drug at the same rates.

Many states that already have legalized the drug have also allowed expungement of past convictions that are no longer crimes, namely simple possession by an of-age adult, and Virginia’s study concluded that expunging past convictions would go far to address racial inequality associated with marijuana enforcement by lifting barriers to employment and housing.

The reviewers caution that the process should be automatic and not subject to additional limitations, citing experience in Illinois where lawmakers limited expungements to possession of less than 30 grams not in conjunction with a violent offenses – rules they said ended up being cumbersome to administer.

2. How will police handle driving-while-intoxicated offenses?

The review predicts that legalization wouldn’t substantially impact law enforcement workloads one way or the other, finding that few departments prioritize marijuana investigations and estimating that statewide officers spend less than a tenth of a percent of their time on the issue.

But more widespread use of the drug does raise questions about how to enforce driving while intoxicated laws, according to the report, which notes that, unlike with alcohol, there’s no way to scientifically measure impairment because blood tests for THC content are considered unreliable. The report notes marijuana use is increasing already and the state will have to deal with the issue with or without legalization.

The report suggests the issue could be addressed with drug recognition training, which few officers currently have. It also suggests new laws discouraging consumption in cars by prohibiting use and open containers in passenger areas.

3. Should the state try to stop big corporations from dominating the market?

Some lawmakers have expressed a desire to keep big, out-of-state companies from dominating the new market. The report says Virginia could discourage the trend by prohibiting single companies from holding cultivation, processing and retail licenses.

The trade-off, researchers write, would be a less efficient marketplace with slightly higher prices. But more expensive products wouldn’t necessarily be a bad thing, they say, because higher prices would help keep products away from young users and discourage overconsumption.

The report also suggests the state could encourage small businesses to join the marketplace by allowing unlimited licenses for small producers, who could sell their own products, functioning like breweries do today. minus the onsite consumption.

4. Should business owners with past marijuana convictions get a leg up?

Again, lawmakers have said equity will be a key focus as they pursue legalization. One area researchers have looked at is ways to make sure the industry isn’t dominated by white men, as surveys show it has been in other states.

They wrote that no state has so far succeeded on this front and Virginia likely would not be able to set aside licenses or incentives for Black applicants under state law. But researchers say the state could try to work around that limitation by targeting policies like reduced license fees, business startup financing and mentorship to people with past marijuana convictions who live in areas that have historically seen a high number of arrests.

They note it wouldn’t be a perfect solution, observing the policies would make a wealthy college grad in a gentrifying area eligible for the same benefits as “a high school graduate from a low-income neighborhood.”


5. How high should the tax rate be and how should the state spend it?

The report recommends the state impose a tax on sales of between 25 and 30%, which the authors say is in line with other states, isn’t so high that the legal market wouldn’t be able to compete with the black market and would eventually generate upward of $300 million a year.

They said the state should also consider higher taxes on more highly processed products, like edibles, which are easier to consume and more potent than the plant’s flower.

When it comes to spending that money, they write that broadly earmarking it for “large programs like education could help fill budget gaps but would have little impact on any individual community.” On the other hand, they suggest spending it on targeted social-equity programs could help address historical harms of the war on drugs, by, for instance, creating a community reinvestment grant fund or dedicating it to high-poverty school districts.


6. Should people be allowed to grow their own at home?

The report suggests home cultivation could be treated like home-brewed beer and is allowed in 10 of 12 legalized states.

If Virginia chooses to go that route, researchers suggest a cap of between two and six plants per person and a maximum of 12 plants per dwelling at any given time. They estimate allowing two plants would yield eight to 16 ounces of marijuana per year, “which would be enough for a moderately heavy user.”

If Virginia goes that route, they suggest prohibiting people from pooling their plant allowances, as some states have, which has resulted in large, unregulated crops.


7. Should Virginia’s liquor board be put in charge of cannabis?

Tasking Virginia’s Alcoholic Beverage Control Authority with regulating cannabis would be the quickest, cheapest way to get the new market off the ground, the report suggests.

That doesn’t mean analysts think the state should have a monopoly on sales like it does with liquor. The authors note that with the drug still illegal at the federal level, getting directly involved in production or sale would likely open the state up to federal enforcement actions.

There would be benefits to creating a brand-new state agency dedicated to regulating cannabis, they say, because it would have a singular focus and flexibility to emphasize priorities like social equity initiatives.


8. How much say should localities have in allowing marijuana businesses?

Lawmakers could choose to allow local governments to opt out of the commercial market, essentially banning any retail, cultivation or processing facilities.

But the report’s authors warn that those localities shouldn’t be allowed to pick and choose what elements of the industry they want to allow, for instance, permitting commercial cultivation but banning sales. They also suggested that the state should not allocate any new tax revenues derived from the programs to local governments that don’t participate.

Commission staffers surveyed local governments and, while they’re not naming any names, they say generally leaders in Northern Virginia and Hampton Roads expect they’d want to participate in the marketplace while leaders in Southwest and Southside Virginia are more skeptical.

This article was originally published by the Virginia Mercury, a Richmond nonprofit, nonpartisan online news outlet covering state government and policy. Virginia Mercury reporter Graham Moomaw contributed to this story.


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