WHAT IS HOUSE BILL 2312?
Virginia's HB 2312, approved on April 7, 2021, legalized simple cannabis possession and cultivation beginning July 1, 2021. It also proposed a system to regulate, tax, and control the cultivation, manufacture, sale, and distribution of retail cannabis and retail cannabis products in Virginia.
WHAT IS THE VIRGINIA CANNABIS CONTROL AUTHORITY?
The Virginia Cannabis Control Authority consists of a five-member Board of Directors and is responsible for implementing regulations, issuing cannabis licenses, and overseeing the cultivation, manufacture and sale of retail cannabis and related products.
WHAT TYPES OF LICENSES ARE AVAILABLE?
(1) Retailer; (2) Wholesaler; (3) Cultivator; (4) Product Manufacturer. Additional licenses will likely be created for testers and transporters.
WILL THERE BE A LIMIT TO THE NUMBER OF LICENSEES?
Yes, the number of licensees will be capped at 400 retailers, 25 wholesalers, 450 cultivators, and 60 product manufacturers, though these limitations do not include existing medical cannabis businesses and hemp processors.
WHEN WILL THE LICENSING APPLICATION PERIOD OPEN?
The licensing application period is anticipated to open July 1, 2023, prior to the start of retail cannabis sales, which is scheduled to begin no earlier than January 1, 2024.
WHAT IS VERTICAL INTEGRATION AND IS IT ALLOWED?
Vertical integration is the combination or co-location of two or more of the activities of cultivation, manufacturing, and dispensing at one location. Vertical integration is generally prohibited, with exceptions made for (1) microbusinesses, (2) existing medical cannabis businesses, and (3) hemp processors after meeting certain requirements.
WHO QUALIFIES AS A SOCIAL EQUITY APPLICANT?
Social equity applicants are those having 66% or more of its owners who: (1) have had a prior cannabis conviction, (2) have a close relative with a cannabis conviction, (3) live in an area that has been disproportionately impacted by cannabis enforcement or that is economically distressed, or (4) graduated from a Virginia HBCU.
HOW WILL THE VIRGINIA CANNABIS LICENSING SCHEME BOLSTER SOCIAL EQUITY?
Social equity applicants will be given priority from July 1, 2023 through January 1, 2024, and will be subject to lowered application fees. The Virginia Cannabis Control Authority will create a Cannabis Business Equity and Diversity Support Team to identify barriers and remedies to inclusion, provide technical assistance, and formulate regulatory requirements to bolster diversity, equity and inclusion. 30% of revenue raised from licensing fees and taxation will go to the Cannabis Equity Reinvestment Fund which reinvests in programs supporting historically marginalized populations.
HOW CAN APPLICANTS PREPARE NOW FOR THE UPCOMING ADULT-USE CANNABIS LICENSE APPLICATION CYCLE?
The first step in preparing for your cannabis license application is to retain a cannabis business attorney.
Among other things, they will guide you through the steps of securing real estate, obtaining local approvals, developing your security plan, environmental impact plan, and quality control plan.
WHY IS A CANNABIS BUSINESS ATTORNEY IMPORTANT?
The lawyers at Leaf Legal, P.C. provide comprehensive and experienced legal counsel to Virginia cannabis businesses in all aspects from the ground up to make sure clients are able to safely navigate Virginia's adult-use cannabis program with an in-depth understanding of all integral elements of licensure and running a compliant business.
By understanding the complexities of Virginia's licensure procedures, the attorneys at Leaf Legal, P.C. are able to diligently guide clients towards establishing state-compliant cannabis businesses. Leaf Legal, P.C. is fully equipped to assist your legal needs in Virginia's rapidly expanding licensing and regulatory scheme. Contact the attorneys at Leaf Legal, P.C. to request a consultation.