Virginia Governor Ralph Northam’s State of the Commonwealth Address Puts Cannabis in the Spotlight

On Wednesday, Virginia Governor Ralph Northam and lawmakers announced legislation to legalize, tax and regulate adult use cannabis, with legal sales coming as soon as January 2023. The legislation, which stands a strong chance of passage, would establish a state fund designed to give people with cannabis convictions a leg up in the state’s new industry, and it would also expunge many cannabis-related charges. 

Northam also reiterated his support for legalization during his State of the Commonwealth address Wednesday evening, calling for legalization centered on equity after acknowledging that the criminal justice system “treats different people unfairly.” 

“Marijuana is a great example,” Northam said, noting that while white and Black people use cannabis at similar rates, Black people are three and a half times more likely to be charged with a cannabis-related crime, and are almost four times as likely to be convicted. 

“It’s time,” he said, to “make marijuana legal and end the current system rooted in inequity. We’ve done the research and we can do this the right way, leading with social equity, public health, and public safety.” 

The legislation put forth by lawmakers and Northam—which was published by the Virginia Mercury ahead of its formal introduction—calls for cannabis to be regulated by the Virginia Alcoholic Beverage Control Authority, which would become the Virginia Alcoholic Beverage and Cannabis Control Authority. Home cultivation would be allowed. Localities would have to hold a referendum on allowing retail shops, but not other license types. Cannabis would be taxed at 21%, which, with state and local taxes, would put the total rate at roughly 30%. Revenue would be allocated toward pre-kindergarten programs (40%), equity (30%), substance use programs and prevention (25%), and other public health efforts. 

The legislation, which would “give preference to qualified social equity applicants” in licensing, also establishes a Cannabis Equity Reinvestment Board that will oversee a Cannabis Equity Reinvestment Fund. Other new roles created include: Cannabis Social Equity Liaison, who will oversee a Cannabis Business Equity and Diversity Support Team, and a Director of the Office of Diversity, Equity, and Inclusion. Both will work together “on matters related to diversity, equity, and inclusion standards in the marijuana industry.” And finally, the legislation creates a Cannabis Equity Business Loan Fund.

Senator Adam Ebbin, one of the top backers of the legislation, noted that a top priority for 2021 is to “create a legal adult-use market for cannabis that will equitably address the unfortunate impacts caused by the misguided war on marijuana.” 

When Northam released his budget in December, he called for legalization. At the time, he said that his budget “lays the groundwork to legalize marijuana in the Commonwealth.” 

“We know that laws to ban marijuana historically were based in discrimination, and criminalization laws have disproportionately harmed minority communities. Virginia has studied the experience of other states—including taxation, banking, criminal justice, licensing, and regulation. Our path forward will lead with social equity, public health, and public safety. This session is the time to get this done,” Northam said in December.

In November, Northam’s cannabis legalization workgroup concluded months of meetings with a nearly 500-page report that provided recommendations on what legalization could look like in the state. 

The lengthy report came after a study released by the state’s Joint Legislative Audit & Review Commission found that legalization in Virginia could generate more than $180 million in annual tax revenue, and more than 11,000 jobs, once the program matures to its fifth year of operation. 

Northam noted in his State of the Commonwealth address the economic reasons for considering legalization: Virginians could be leaving a lot of money on the table, he said. 

“Marijuana has become a cash crop that rivals tobacco, even right here in Virginia. But as an illegal crop, it makes no money. Virginia, by legalizing and taxing it, we can use the revenue to help communities most disproportionately impacted by the inequities in our laws,” Northam said, adding that “just half of the potential annual revenue” could cover the costs of two years of pre-kindergarten for “every one of Virginia’s most vulnerable three and four year old children who deserve the best start in life.” 

Virginia has been on a steady path to legalization since 2019, when Attorney General Mark Herring hosted a cannabis summit

“Front and center is badly needed reform of our cannabis laws in Virginia. I don’t believe that Virginia’s current system of criminalizing cannabis is working. It is needlessly creating criminals and burdening Virginians with convictions. The human and social costs of this are enormous,” Herring said, emphasizing that communities of color bear the heaviest burdens when it comes to how cannabis laws have been enforced. 

In an interview with Cannabis Wire, Herring stressed that it was necessary for legalization to address the disproportionate rate of arrests between Black and white cannabis users, despite similar rates of consumption.

Herring told Cannabis Wire that “the social equity and racial equity concerns are real in Virginia, and that disparity cannot be discounted or ignored. It has been proven, and legalization will help address that.” 

Cannabis law reform is coming to the South, with Mississippi voters choosing to legalize cannabis for medical use on Election Day, and Texas lawmakers pledging to expand their program. Herring told Cannabis Wire that Virginia’s cannabis plans could set an example for other southern states. 

“We have shown that marked progressive reform is possible here in Virginia. And we need to continue forward on that path,” Herring said. “It’s possible in their states too.”

HB 1815, another bill to legalize cannabis in Virginia, was introduced last week. As Cannabis Wire reported, that bill is unlikely to be the one to cross the finish line. 

More Virginia Governor Ralph Northam’s State of the Commonwealth Address Puts Cannabis in the Spotlight