HD11 - Impact on the Commonwealth of Legalizing the Sale and Personal Use of Marijuana (Chapter 1285, 2020)
Since 2012, states across the nation have begun legalizing adult-use marijuana for sale and personal use. Colorado and Washington State took the first leap into this policy area through statewide ballot referendums. Since then, 15 total states across the Northeast, Midwest, and West have also decided, via both ballot initiatives and legislative action, to legalize the substance, which remains illegal at the federal level. If Virginia was to legalize marijuana, it would be the first state in the South to do so.
The purpose of this report is not to recommend to either the Governor or the General Assembly whether or not the Commonwealth should take legislative action to legalize marijuana. Rather, this report seeks to outline important areas of consideration should Virginia pass legislation legalizing the substance. This report was mandated in Chapters 1285 and 1286 of the 2020 Acts of Assembly as an enactment clause in the legislation that decriminalized possession of small amounts of marijuana (HB972 & SB2). Furthermore, that clause required the creation of a work group comprised of relevant stakeholders to explore these ideas in depth. This work group met 15 times, including subgroup meetings, between July and October 2020 to hear from policy experts, health professionals, community leaders, and government officials from across the nation, including from states that have already legalized marijuana. This report is a reflection of the consensus, stakeholder-driven process by which this work group conducted its task.
Chapter 4 of this report is an overview of how other states have approached the question of marijuana legalization and the legal and regulatory frameworks they set up to control its sale and use. Every state has different approaches to each of the associated policy questions, but in some areas, such as legal age for purchase, a national consensus standard has emerged. Virginia has an opportunity to learn from and build upon all of these states that have already implemented programs. All of these states have faced substantial challenges, and if Virginia is intentional and allocates adequate resources, it can seek to minimize these challenges as much as possible. The next chapter of the report provides an overview of Virginia’s existing cannabis programs and recent marijuana policy changes, including the industrial hemp program, medical marijuana pharmaceutical processor program, and the 2020 law that decriminalized possession of small amounts of marijuana. This chapter also discusses what the potential goals of a legal adult-use marijuana program could be and how those goals might influence particular policy directions. These goals include protecting public health, ensuring social and racial equity, raising revenue, and ensuring the success of existing cannabis programs.
Chapter 6 covers the feasibility of legalizing marijuana for sale and personal use in Virginia. Setting up an adequate regulatory structure will require a significant upfront investment, in time, patience, and budgetary resources. This chapter includes a section regarding the potential regulatory, structural, and staffing needs of a state agency responsible for overseeing marijuana. This chapter also includes the estimated cost of setting up and maintaining this structure and fulfilling its regulatory goals. A program as complex as this cannot be created quickly; it is in Virginia’s best interest to move at a thoughtful pace.
One topic of particular interest to the Commonwealth is the potential impact of marijuana legalization on Virginia’s economy and state revenue. Chapter 7 includes fiscal analyses and concludes that there is significant opportunity for Virginia. For example, a legal adult-use marijuana industry could be worth $698 million to $1.2 billion annually in economic activity and up to $274 million in tax revenues per year at industry maturation. However, there are two caveats. First, this analysis relies on a number of assumptions, many of which could change once Virginia actually moves forward with a legalization program. Additionally, it will likely take at least five years for the industry itself to mature, which adds greater uncertainty. This chapter also discusses options regarding how the product itself might be taxed. These decisions will impact the growth of the industry and the amount of revenues the Commonwealth collects.
Chapter 8 focuses on the legal and regulatory framework Virginia would need to implement to successfully legalize the sale and personal use of marijuana. This chapter covers the potential structure of the industry and options for licensing programs for marijuana businesses. Importantly, this chapter discusses the opportunity for Virginia to establish a social equity program with a goal of undoing the past harms of criminalization on communities of color and other people who have been negatively impacted by marijuana prohibition. Furthermore, this chapter contains policy options on regulatory topics such as product composition, packaging and labeling, advertising, personal cultivation, and impairment. Finally, a section covers various criminal code changes that Virginia will need to consider with any potential marijuana legalization legislative effort. Overall, thoughtful deliberation will be required on each of these topics and many others as policymakers move forward.
Chapter 9 is dedicated to the review of the potential health impacts of marijuana legalization. Overall, there are scant data to demonstrate a scientific consensus of how marijuana legalization could impact both individual health and public health. One key recommendation of this report is to collect targeted data regarding public health and safety matters, such as poison control calls, emergency room visits, driving impairment, youth use rate, and treatment data by drug. This will allow Virginia to accurately analyze the impact of legalization and the efficacy of public health and safety efforts. Efforts such as consumer education, youth access prevention, and behavioral health programs, such as substance use disorder prevention, treatment, and recovery, are all important. Policymakers should consider allocating some of the revenue the state collects from marijuana sales to these programs. Finally, ensuring the success of public health tools like Virginia’s Indoor Clean Air Act should continue to be a priority.
Overall, this report provides a blueprint for thinking about marijuana legalization in Virginia, should policymakers choose to pursue legislation. This report rarely makes specific recommendations. However, it does lay out options for officials to consider as they move forward in this area.