by Ned Oliver, Virginia Mercury
January 24, 2022
GOP lawmakers in the Virginia House of Delegates are taking their first stab at legislation to open the retail marijuana market, introducing bills that would lower the tax rate on sales and redirect proposed social equity funding to school infrastructure.
But leadership in the chamber stressed that the effort remains very much a work in progress and that they expect plenty of changes as the legislation makes its way through the committee system.
“We’ll come up with something,” said Garren Shipley, a spokesman for House Speaker Todd Gilbert, said last week. “There will be a bill. There may be multiple bills. But something is going to come out of this chamber.”
Republicans unanimously opposed legalization when Democrats voted last year to allow people to grow and possess small amounts of marijuana. But Democratic lawmakers’ decision to leave it until this year to finalize the particulars of how a legal retail market would work —combined with the loss of their House majority in November — has left the once-reluctant GOP with a key role in deciding how to proceed.
Gilbert said that while his caucus opposed legalization, he views it as imperative to come up with a mechanism for legal sales, complaining that the legal framework left in place by Democrats has only empowered the black market.
The party has so-far left the heavy lifting on that front to Del. Michael Webert, R-Fauquier, who was among a handful of GOP lawmakers to support reducing penalties for marijuana possession two years ago and is the only member of the party to introduce a comprehensive bill governing retail sales.
While his bill largely tracks with legislation introduced by Democrats in the House and Senate, it diverges in a few key areas.
First, it halves the proposed tax rate on retail sales from 21 percent to 10 percent, which would be the lowest in the country. Webert called the step important to compete with the black market, citing the experience of California, where the combined tax rate on sales is just over 36 percent.
“They have an ungodly huge black market,” Webert said. “So we don’t want the taxes so high that we drive things to the black market.”
His bill also changes how the money would be spent.
Social equity and schools
Democrats centered their legalization effort around social equity provisions aimed at making amends for disproportionate enforcement of marijuana laws in Black communities. To that end, they proposed that 35 percent of tax revenue from marijuana sales be dedicated to a Cannabis Equity Reinvestment Fund, which the law proposed be dedicated to providing scholarships, community programs and business loans to people and communities “historically and disproportionately targeted and affected by drug enforcement.”
Webert’s bill eliminates that fund, instead proposing the revenue for a new grant program to help local governments pay for the cost of repairing or replacing school roofs.
Finding more state funds to fix decrepit school buildings has been a focus for some Republicans recently and Webert said his approach would benefit both rural and urban areas that have struggled with the issue.
Webert also proposes tweaking — but not eliminating — a program devised by Democrats to give people negatively impacted by prohibition priority access to marijuana business licenses.
His legislation strikes criteria that would have extended preference to people convicted of marijuana crimes in the past — something that GOP lawmakers vocally opposed last year. But it maintains language that would allow priority access for people who live in areas that were subject to higher than average enforcement or are economically disadvantaged. It also maintains eligibility for people who attended a Virginia historically black college or university.
The bill also includes subtler departures from the approach proposed by Democrats. For instance both bills allow localities to hold referendums to opt out of marijuana sales, but the GOP bill would bind towns to the decision of their surrounding county while the Democratic bill treats them as independent jurisdictions. (Legislation from two GOP delegates goes further, barring any retail marijuana stores unless sales are specifically approved by a local referendum.)
The GOP bill also drops languages that would block local governments from passing new zoning rules that apply only to marijuana businesses.
And it strikes language that was aimed at promoting unionization in the new industry by refusing to license business owners who oppose unionization efforts by employees or rely heavily on independent contractors.
For now, Republicans and Democrats have proposed similar stances on resentencing for people currently imprisoned on marijuana charges, allowing them to petition a judge to reconsider their sentence, though the GOP bill excludes people convicted of distributing the drug to minors.
A bill authored by Del. Carrie Coyner, R-Chesterfield, goes further, proposing automatic resentencing hearings.
Both chambers have also introduced separate legislation to move the date retail sales can begin from 2024 to 2023 — a key recommendation from lawmakers tasked with studying the issue over the summer.
The chambers differ, however, on whether to include large hemp processors in the stop-gap program. The House version limits early sales to existing medical producers. The Senate version allows large industrial hemp processors to also enter the market early.
So far, none of the bills have been docketed in the House of Delegates and it remains unclear when debate on the measures will begin in earnest.
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