Virginia Recreational Cannabis Market: February 2022 Recommended Reads
July 1, 2021 Virginia legalized possession of “marijuana” or recreational cannabis up to an ounce. But the battle is far from over. (Whenever possible will use “cannabis”, the scientific term for the plant, as opposed to “marijuana”, the term most commonly used in legislation to describe THC-dominant cannabis products because the latter term has been used historically to associate the plant and its users with a racist narrative.)
Virginia still has not established a framework for sales of recreational cannabis, so access to the plant is still limited to the medical program and the few companies that have been permitted to begin opening dispensaries. To add insult to injury (quite literally, especially for those still incarcerated for cannabis charges), corporate lobbyists for big cannabis businesses are working hard to establish monopolies in states with limited markets.
There’s a lot going on in the news regarding cannabis. Legistlation-wise, things are constantly evolving. Here’s a review of what happened in February 2022.
What’s the hold up?
Marijuana sales in Virginia could start this year, but small farmers and social equity advocates worry they’ll be shut out | The Washington Post
The Virginia Senate passed a bill that “would allow pharmaceutical processors — the handful of preexisting medicinal dispensaries in the state — and large industrial hemp processors to begin selling recreational marijuana on Sept. 15. The rest of the market would begin on Jan. 1, 2024.”
“Lawmakers and medicinal dispensaries argue that early sales are necessary to bridge a gap — created last year when the then-Democratic-controlled General Assembly legalized possession, but delayed sales until 2024 — and limit the black market for marijuana by providing safe and regulated sales before the full market begins.”
However, if we study what has REALLY happened in other states, this is a bold-faced lie. The argument is that opening up the market exclusively to corporations will keep consumers safe, but that’s the opposite of the truth. As demonstrated by strict regulations in states like California, a limited market will only throw fuel on the already rapidly burning unregulated market fire.
Further, repairing the damage that will be done by not legalizing it right the first time will become another uphill battle.
“If transitional sales open only to the established pharmaceutical and large-hemp processors, social equity advocates worry the state’s social equity program will be “too little, too late…
Chelsea Higgs Wise, executive director of Marijuana Justice, an organization advocating for an equitable cannabis industry, said that while the bill has social equity provisions outlined, if equity is not considered from the first day of sales, it will probably just continue to get pushed down the line.”
California voters approved recreational marijuana five years ago, joining a club that has now grown to 18 states and Washington, D.C. The hope was legalization would eventually put illicit operations out of business. But instead, the opposite is happening: The underground market is booming, causing some to warn the regulated system is teetering toward collapse.
Business owners face steep taxes and costly red tape, and consumers are finding that better deals can be had outside of licensed stores. We embedded with law enforcement during raids of outlaw operations and spoke with illegal growers and dealers about the market realities in California’s weed economy.
What will Virginia’s future look like if we don’t Legalize It Right?
Inside California’s Black Market Weed Boom | Vice News
To start, take a look at this video from last month: Inside California’s Black Market Weed Boom by Vice News.
In it, it’s clear that many new problems can be created when legalization isn’t handled correctly the first time.
The industry is divided and cannot work together, the unregulated market thrives, and all sides of the industry struggle to compete and stay afloat.
Consumers start out getting product from dispensaries, but when their tastes evolve and their tolerance increases, people are looking for a little more. The only other place to find the better quality product is in the unregulated market.
How did we get here?
How Big Business is Trying to RIG Legal Weed Market | Breaking Points
Matt Stoller is a fellow at the Open Markets Institute. He is writing a book on monopoly power in the 20th century for Simon and Schuster. Previously, he was a Senior Policy Advisor and Budget Analyst to the Senate Budget Committee.
We highly recommend watching the new video by Breaking Points, where Matt Stoller “dives into all the big money in the legal weed market and how big business is moving to take full advantage of it”.
This video succinctly summarizes the whole legalization situation better than any other piece of content we’ve found so far. It offers historical context as well as context for the state level, nationally, and worldwide.
A Cannabis Monopoly Asteroid is Coming (Op-Ed) and Bigger is Not Better: Preventing Monopolies in the National Cannabis Market | Shaleen Title
Shaleen Title is a drug policy attorney, a fellow at Ohio State University Drug Enforcement and Policy Center, CEO of the Parabola Center for Law and Policy, and former Massachusetts Cannabis Control commissioner. She writes and implements laws legalizing cannabis.
In her op-ed for Marijuana Moment, A Cannabis Monopoly Asteroid is Coming (Op-Ed), Title explains about antitrust laws and speaks in an inspiring and optimistic way about the future of cannabis despite the huge investments big tobacco and alcohol companies are making into cannabis:
“If you listen to them, you might think it’s a foregone conclusion that cannabis has to end up like so many other industries, from cigarettes to peanut butter, where the largest three or four firms control over 90 percent of the market.
And yet, nothing is a foregone conclusion. The future of federal legalization is up for grabs. To the frustration of all of us rooting for federal marijuana law reform, no piece of legislation has even made it to a vote in both chambers of Congress. As Politico observed recently, so-called “Big Weed” hasn’t been particularly effective, despite spending hundreds of thousands of dollars a year on lobbying efforts and hiring big names like John Boehner and other former members of Congress who never supported legalization while in office.
Instead of relying on profiteers, we can stick with the roots of our movement: the people. This moment calls for a united effort to preemptively crack down on national cannabis monopolies. Instead of further entrenching oligopoly-like markets, where consumers complain of high prices, we can put consumers, patients, workers and small businesses first.”
Title’s new paper, Bigger is Not Better: Preventing Monopolies in the National Cannabis Market outlines why corporate monopolies in the cannabis industry are a threat to public health and why open competition is better for everyone.
"While states are making historic progress creating paths for small businesses and disenfranchised groups, larger companies are expanding, consolidating, and lobbying for licensing rules to create or maintain oligopolies. Federal legalization will only accelerate the power grab already happening with new, larger conglomerates openly expressing interest. Left unchecked, this scramble for market share threatens to undermine public health and safety and undo bold state-level efforts to build an equitable cannabis marketplace. This paper argues for intentionally applying well-developed antitrust principles to federal cannabis reform now, before monopolization of the market takes place, and offers eight concrete policy recommendations. …
1. Allow people to grow a reasonable number of plants for personal use.
2. Prohibit vertical integration.
3. Do not cap the number of business licenses available in total, but limit how much of a market any one person or entity may control.
4. Create incentives for states to license small or disadvantaged businesses.
5. Enforce ownership limits and review mergers based on existing evidence of predatory and anticompetitive tactics in state marijuana markets.
6. Disqualify corporations from the cannabis industry if they have engaged in corporate crimes, defrauded the public, or caused significant public health damage.
7. Create a multi-agency task force to enforce anti-monopoly limits.
8. Authorize states to ban or delay interstate commerce in order to preserve state-level advantages to local businesses.”
The Latest
House Republicans kill legislation to kick start legal sales of marijuana in Virginia | Richmond Times-Dispatch
The headline for this is a little misleading, considering there were people on both sides of the political spectrum who didn’t like this bill, but any way… Today SB 391 was pushed back until next year and SB 591 was moved forward. While we did not want 391 to pass, we want 591 to pass even less. Here’s why.
The good:
SB 391 would have established new crimes for possession. This would be a step backward for Virginians trying to enjoy their freedoms.
SB 391 would have also established an 18-month monopoly for a small handful of mega-corporations. This would have been a step backwards for Virginians who want to support small businesses/local economy and don’t want to pay dispensary prices.
SB 591 prohibits the production and sale of “marijuana” products that “depict or are in the shape of a human, animal, vehicle or fruit.” This is meant to discourage products that may be marketed to kids or mistaken for kid-friendly candy.
The bad:
SB 591 modifies the definition of “marijuana”. It removes delta-9 in “delta-9 THC” and specifies “THC” to mean “any naturally occurring or synthetics tetrahydrocannabinol, including its salts, isomers, or salts of isomers.” This would prohibit the production and sale of the minor, less psychoactive cannabinoids like Delta-8 THC. (This is extremely upsetting because we have customers that depend on our Delta-8 products. Delta-8 is sometimes referred to as “weed light” — Many of our customers say Delta-9 THC is too psychoactive.)
SB 591 also limits the amount of total THC allowed per package in hemp products, which would make most CBD products illegal. (THC content no more than 0.25mg per serving and no more than 1mg THC per package)
As stated at the top, “corporate lobbyists for big cannabis businesses are working hard to establish monopolies in states with limited markets.” I would even go further and say that they know that hemp businesses like us are speaking out about being cut out of the recreational market in the future. They are working to shush us by passing legislation that will cripple the independent hemp industry in Virginia.
Here’s a bill we DO like:
HB 950 by Delegate Michael J. Webert (R) would:
Begin to establish a framework for small businesses to participate in the recreational cannabis market alongside the medical dispensaries.
Establish a framework for regulating the market by regulating Virginia’s test labs. This would allow consumers as well as those on all sides of the industry to ensure the quality and safety of products on shelves.
Things we don’t like about HB 950 (but which are not deal-breakers):
Would give localities the power to prevent a recreational cannabis business from operating in their area. (The medical dispensaries/pharmaceutical companies would be exempt from the rule.)
Would prevent recreational cannabis businesses from having any kind of online store or delivery service. (The medical dispensaries/pharmaceutical companies would be exempt from this rule too.) We don’t like this because it’s an unnecessary advantage the dispensaries want to have over small businesses. These pharmaceutical companies are whispering in legislators ears trying to convince them the industry won’t be safe if they don’t grant all these advantages to Big Cannabis, but there’s absolutely no evidence to back up their claims.
What to do:
We recommend using the resources below to contact your representatives and tell them why they should NOT support SB 591 and why they SHOULD support HB 950.
Our personal thoughts
It's disappointing to see some of the comments in response to the recent news of a dispensary opening in Christiansburg. There were a lot of assumptions being made about how people on different ends of the political spectrum feel about cannabis. Particularly, that conservatives are supposedly against it. These are harmful assumptions that perpetuate the stigma around this plant and push us further apart as a community.
We serve people from all ends of the political spectrum. Our store is a politics-free zone. Our industry is necessarily tied to some political issues, but we feel that we — as Americans, as humans — agree on a lot more than our social media and news make it seem.
Cannabis is medicine. People want access. They also want choice. Unfortunately, with the medical industry and corporations in charge of the scene, there's not good access and there's no choice.
There are plenty of reasons to be angry about the dispensaries popping up all over the state, but for most it has nothing to do with the plant itself. We're angry that people's lives are still affected by cannabis prohibition. We shouldn't be talking about expanding the industry in VA until those people are out of prison and hundreds of records expunged. Corporations profit and are working to establish a long-term monopoly while our government continues to treat people like criminals for the same exact substance. This needs to end. It's so long overdue. It's not a political issue. It's a human rights issue.
Once we free the innocent... We need an OPEN, regulated market. We need open competition so that the prices aren’t artificially set unattainably high by mega-corporations eager to satisfy investors in another state. We need a fair game so we can enjoy unique, craft cannabis products made locally with love by members of OUR community. We, the people, should be allowed to be a part of this business. If the barrier to entry is too high, the reparations will never be made, there will be no equity, people will continue to be taken advantage of, and we won't get better. Don't we all agree that we want people to feel better and be treated fairly? We HAVE to work together.
Call-To-Action
Contact Your Legislators
We need everyone to contact their delegates and stop this new bill that would jeopardize Virginia's Hemp and CBD industry! Here are a few resources for contacting your legislators.
Specific to SB591:
Significant Negative Impacts of SB591S3 prepared by Blake Bilger, owner Cypress Hemp helps point out the major flaws with the bill being presented! Use this to help with language to communicate with your representatives.
A list of Virginia delegate’s emails: Copy and paste to mass-email everyone.
List of Virginia’s House of Delegates Members: Names, phone numbers, and email addresses.
General resources:
Use commoncause.org to enter your address and locate the names & contact information for ALL of your representatives for your address.
Tips for Communicating With Legislators | The American Battlefield Trust
Write a letter to your legislator | American Society for Biochemistry and Molecular Biology
Subscribe to Marijuana Justice email newsletter — they occasionally share tools that help you send effective communications to representatives about specific bills.
Main Arguments:
The facts and studies show that over-regulation of the industry does NOT keep the unregulated market under control. Enforcement does not help.
No one has died from cannabis. The idea that this bill is about safety is misdirection. We should be passing legislation based on facts and studies, not based on fear mongering.
The availability of minor cannabinoids like Delta-8 THC is important to:
Consumers looking to access THC without resorting to the black market
Consumers who cannot afford the prices the dispensaries are charging for Delta-9 THC.
Consumers who are looking for something with a therapeutic threshold that lies in between CBD & Delta-9 THC.
The restrictions being proposed to the hemp industry would also have consequences on CBD products. This will be a huge hit to small local hemp businesses in Virginia who are waiting patiently to have a chance to be a part of the recreational market.
UPDATE: 3/11/22 — SB591 passed the house and could be considered by the governor next. Here’s a couple ways to contact the governor: