Our reading list for March includes Senate Bill 1406, the 264-page bill that the General Assembly just passed that will legalize marijuana in 2024. It’s not the most riveting prose we’ve ever read, but it is fascinating in its own peculiar way. Whether you favor legalization or oppose it, the odds are that Virginians don’t fully comprehend what the legislature has set in motion.
As previously noted, there are three aspects of the bill, which might get even longer if Gov. Ralph Northam proposes amendments, as many think he will. First, the “social equity” provision is intended to give an advantage to Black applicants for licenses to operate marijuana-related businesses — compensation for how over the years Black Virginians have been arrested at higher rates than whites for misdemeanor marijuana offenses. However, given the criteria that will be considered, it seems that provision will also benefit a lot of white applicants from Southwest Virginia — an indication of how the economic interests of Black Virginians and conservative rural whites are often more aligned that their differing politics might suggest.
Second, we pointed out that — unlike the laws in the most famous legal weed states — Virginia will make it hard for localities to opt out. They have one chance, and one chance only, to hold a referendum to prohibit retail sales. That referendum must be in 2022. It’s like the famous Eminem song “Lose Yourself” — they’ve got one shot, one opportunity. You can view this either Virginia adopting a more liberal law than even California or Colorado (if you’re against legal pot) or you can view it as a pro-business law (because this creates more opportunities for the coming generation of marijuana entrepreneurs).
Finally, we noted that, unlike some other states, Virginia allows cultivation everywhere. A locality might vote in a referendum in 2022 to ban a pot retailer but it can’t ban a licensed pot farmer. You can look at that either as a liberal legislature dictating to conservative local governments — or you can appreciate the irony of a suburban-dominated legislature that just did a favor for farmers (unless those future marijuana farms wind up being in greenhouses in the urban crescent).
Today, we’ll look at other provisions of the legalization bill. It sets caps for the number of licenses that can be issued for retail stores (400), wholesalers (25), manufacturing facilities (60) and cultivation facilities (450). These caps are common in many legal weed states — although Colorado doesn’t have any limits. Here’s a situation where the politics of pot might not align with a traditional left-right spectrum. Conservatives opposed to legal weed might want strict government regulation; liberals might embrace a free-market approach. Government doesn’t dictate how many McDonald’s we can have; why should it dictate how many McMarijuanas we might have? In any case, Virginia will.
Virginia’s cap of 400 retail stores marks us as far more liberal than Illinois. That state (which is bigger than us) originally allowed its 55 medical marijuana dispensaries to also sell recreational marijuana — and gave those 55 dispensaries permission to open a second location, which would allow up to 110 locations. Later, it decided to issue up to 75 more licenses for retailers. However, only 21 applicants have been rated as qualified and none of those have been issued yet.
On the other hand, Virginia’s law allows fewer retail stores than in Washington, a state similar to us in population. Washington sets a cap of 556 retail licenses although only 485 are presently in operation. Colorado — with no caps — counts 609 retailers, even though sales are only legal in parts of the state. Oregon — another state with no caps — last year counted 660 dispensaries. If Virginia let the free market rule, and if Virginians like their weed as much as those out west, we might wind up with more than 400 retail stores.
Here’s a good way to visualize our max of 400 retail stores: Virginia has 392 Alcoholic Beverage Control stores. So we could wind up with about as many pot stores as liquor stores — the difference being that ABC stores are state-owned and marijuana stores will be privately owned. Another irony: A conservative Virginia of years past set up a government-run system for liquor sales but a liberal Virginia is now setting up a free-market system for marijuana sales. We have socialized liquor but will have private enterprise pot (up to a point, since the number of stores will be limited by law).
What Virginia is doing here isn’t simply legalizing marijuana, its opening the door for an entirely new industry — with a supply chain from farm-to-store with manufacturers in between (think edibles) and wholesalers (think transportation) in between. Somebody will make money here and in the future we’ll likely see local governments trumpeting the opening of a marijuana manufacturing facility the same way they do the opening of some other type of factory. Jobs are jobs. Where will those up to 450 cultivation facilities be? Will they be mostly farms (in rural areas) or greenhouses (which might be in cities)? Where will the up to 60 manufacturers be? They’d probably want to be close to the growers, right? If Southside and Southwest Virginia wants those jobs, local governments should be trying to figure out now how to attract them. Which economic development agency will be the first to hold a seminar to tell potential entrepreneurs what they need to do to get into this new business sector?
The new law also will allow people to grow up to four marijuana plants for their personal use — provided they are out of sight and tagged with your contact information. That’s also in line with what other states have done. Vermont allows two plants; Maine three; Montana and Oregon four; Illinois five; Arizona, California, Colorado and Massachusetts six; Michigan up to 12. Nevada, South Dakota and Washington, though, outlaw any home cultivation. You know what this means? It means come 2024 we’ll have gardeners bragging about the size of their buds the same way they compete to grow the biggest tomato. Which county fair will be the first to award a blue ribbon for the best homegrown marijuana plant? Yes, yes, those rules about keeping the plants out of sight — and away from kids — mean they won’t be on display but creative people can figure out other ways to judge them. Virginia is about to become a lot more interesting.