Virginia
Cannabis Consultant Insights
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Virginia Cannabis Consultant Insights
Overview of the Virginia Cannabis Control Act (2021) and CCA Medical Cannabis Regulation (Effective January 1, 2024)
In 2021, the Virginia General Assembly enacted the Virginia Cannabis Control Act, marking a significant shift in the state's approach to cannabis regulation. This landmark legislation legalized the possession of up to one ounce of marijuana for adults and established the Virginia Cannabis Control Authority (CCA), a regulatory body responsible for overseeing the cannabis industry in the state. Additionally, the Act permitted Virginians to cultivate up to four marijuana plants per household, fostering a more inclusive and controlled approach to personal use.
Effective January 1, 2024, regulatory oversight of Virginia's medical cannabis program transitioned from the Board of Pharmacy to the Cannabis Control Authority (CCA). The CCA, an independent, apolitical subdivision of the Commonwealth, is tasked with promoting public safety, advancing public health, and protecting communities through effective oversight and balanced, inclusive cannabis regulation. This shift aims to streamline the regulatory framework, ensuring that medical cannabis operations are conducted with rigorous standards for safety, quality, and accessibility, reflecting the state's commitment to a well-regulated cannabis industry that meets the needs of patients and the public.
Summary of HB 2312: Marijuana Legalization of Simple Possession
House Bill 2312, passed by the Virginia General Assembly, represents a historic shift in the state's cannabis policy, legalizing the simple possession of marijuana. This legislation, enacted in 2021, allows adults aged 21 and over to legally possess up to one ounce of marijuana for personal use. Additionally, it permits the cultivation of up to four marijuana plants per household, provided the plants are not visible from a public place and precautions are taken to prevent unauthorized access by minors.
HB 2312 also addresses the need for a regulated market by creating the Virginia Cannabis Control Authority (CCA), tasked with overseeing the commercial production and distribution of cannabis. This body is responsible for establishing and enforcing regulations to ensure public safety, product quality, and adherence to the law. The CCA will issue licenses for cultivation, processing, and retail sales, aiming to create a balanced and fair market.
The bill also includes provisions aimed at addressing past injustices related to marijuana prohibition. It outlines procedures for the automatic expungement of certain marijuana-related criminal records, reducing barriers for those previously convicted of offenses that are no longer illegal under the new law. This aspect of the legislation seeks to promote social equity and restorative justice, recognizing the disproportionate impact of previous cannabis laws on marginalized communities.
Overall, HB 2312 not only legalizes the simple possession of marijuana but also lays the groundwork for a regulated cannabis market in Virginia. It represents a comprehensive approach to cannabis reform, focusing on public health, safety, and social justice.
History of Cannabis Regulation in Virginia
1979
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The Virginia General Assembly passed a law eliminating prosecution for marijuana possession if a written prescription was provided by a doctor for the treatment of cancer or glaucoma. However, the law did not establish a legal process for patients to obtain medical marijuana.
2002
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A federal circuit court ruled that doctor “recommendations” for medical marijuana are protected under the First Amendment as a form of free speech.
2015
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The Virginia General Assembly authorized marijuana possession based on a doctor’s recommendation and prohibited prosecution of patients and their guardians who possessed cannabidiol (CBD) for epilepsy treatment, provided they had a doctor's certificate. This law did not legalize marijuana possession beyond CBD and tetrahydrocannabinol (THC) oils.
2018
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The Virginia General Assembly expanded medical marijuana use authorization to include any medical condition. The law empowered the Virginia Board of Pharmacy to license pharmaceutical processors and set up distribution procedures for medical marijuana. The Board issued one pharmaceutical processor permit in each of the state’s five health regions. Patients were required to obtain a physician's recommendation and register with the Virginia Board of Pharmacy at a cost of $50 per year.
2019
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The Virginia General Assembly clarified the legal use of CBD and THC oils, allowing physician assistants and nurse practitioners to write certifications for medical marijuana patients. The law also expanded the sale of marijuana to include edibles and other packaged forms, excluding marijuana flower.
2020
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Access to medical marijuana was increased by eliminating the requirement for on-site pharmacists during plant cultivation. The five authorized processors were permitted to establish five additional off-site cannabis dispensary facilities within their health service areas. The Virginia General Assembly decriminalized the non-medical use of marijuana.
2021
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The Virginia General Assembly legalized possession of up to one ounce of marijuana and created the Virginia Cannabis Control Authority (CCA). Legislation was enacted to allow Virginians to grow up to four marijuana plants per household starting July 1, 2021.
2022
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The Virginia General Assembly did not reenact the legislative framework for a retail market. To address delays in medical marijuana patient registration, the requirement for patients to register with the Virginia Board of Pharmacy was eliminated. Dispensaries were permitted to sell medical marijuana to patients with a written certification from a registered practitioner.
Virginia Cannabis Market Performance Projections
Medical Cannabis Market
The medical cannabis market in Virginia has shown significant growth and is expected to continue expanding. For instance, companies like Jushi have reported a 33% year-over-year increase in medical cannabis sales for the first quarter of 2024. This growth is driven by the positive response to retail and wholesale operations within the state (Benzinga). By 2025, the medical cannabis market in Virginia is projected to generate up to $150 million annually.
Adult-Use Cannabis Market
The adult-use cannabis market in Virginia, set to be fully operational by May 1, 2025, is anticipated to reach between $875 million and $1.1 billion in annual sales by 2026. This projection includes a robust licensing framework that supports small-scale entrepreneurs and ensures equitable access to the cannabis industry. The Virginia Cannabis Control Authority (CCA) will oversee the licensing process, maintaining compliance with state laws and fostering a safe, regulated market environment (Expert Market Research).
How to Apply for a Pharmaceutical Processor License in Virginia
In 2016, legislation authorized the issuance of five pharmaceutical processor permits in Virginia, one for each Health Service Area (HSA). Initially, permits were issued in 2018, but the permit for HSA 1 was rescinded due to litigation, which concluded in May 2023. Subsequently, the request for applications was rescinded in September 2023.
As of January 1, 2024, regulatory oversight transferred from the Board of Pharmacy to the Cannabis Control Authority (CCA), which is responsible for promoting public safety and health through effective cannabis regulation.
The Notice of Open Applications (NOA) sought applications for a permit to operate a pharmaceutical processor in Health Service Area (HSA) 1 (there are 5 health service areas in total), covering the Shenandoah Valley and areas like Charlottesville, Fredericksburg, Spotsylvania, and Stafford. Only one permit will be awarded in this area.
Applicants must apply online and pay a non-refundable fee of $18,000. Applications will be disqualified if they are incomplete, false, submitted late, fail to pay fees, or if the applicant has disqualifying criminal convictions. No one with a felony conviction in the last five years can own, work for, or act as an agent for a pharmaceutical processor.
Type: Pharmaceutical Processor Licensing Application
Regulatory Structure: Medical
Max amount of Pharmaceutical Processor licenses to be issued:
A maximum of five (5) permits – one in each health service area established by the Virginia Department of Health.
License Application Fees
Application Fee: $18,000
To be paid at time of application submission
License Fee: $165,000
To be paid once license is awarded
Definition of Pharmaceutical Processor in Virginia
A pharmaceutical processor is a vertically integrated facility licensed to cultivate, produce, and dispense cannabis products to qualified patients. The Virginia Code § 4.1-1600 defines a pharmaceutical processor as a facility authorized to cultivate cannabis plants, produce cannabis products, and dispense them to patients with a written certification.
License Application Structure
The application process includes four stages:
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Submission of applications
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Review of applications
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Award of conditional approval
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Grant of a pharmaceutical processor permit
A. Anticipated Timeline for Conditional Approval
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Issue NOA
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Application Due
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Board reviews and scores applications
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Deadline for fingerprinting and background checks
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Finalize conditional approval or select alternate
B. Stages
Stage 1: Submission of Applications
Applicants must submit a complete application through the online portal, including the $18,000 fee.
Required materials include:
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Business plan
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Owner details
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Authorization to conduct business in Virginia
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Compliance with local building, fire, and zoning regulations
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Prior involvement in the cannabis industry
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Exterior and interior facility plans
Freedom of Information Act Notice
All materials are subject to FOIA, Virginia Code title 2.2, chapter 37.
Stage 2: Review and Scoring of Applications
The review committee will score applications based on business plans, addressing eight categories. Each category is scored from 0 (Unsatisfactory) to 2 (Exceptional). A minimum of 8 points is required for consideration:
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Financial position
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Likelihood of success
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Cultivation methods
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Manufacturing processes
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Dispensing practices
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Quality control
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Prevention of diversion
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Proposed location
Stage 3: Awarding of Conditional Approval
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Conditional approval will be given to the highest-scoring applicant. In case of a tie, a lottery may be used.
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Conditional approval is subject to criminal history checks of material owners (5% or greater interest).
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Fingerprinting and background checks must be completed by July 8, 2024.
Stage 4: Granting of a Pharmaceutical Processor Permit
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Applicants have one year to fulfill all permit requirements, including facility construction, equipment installation, and hiring necessary personnel.
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A $165,000 fee is required for the initial permit.
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Permits are valid for one year and can be renewed annually.
Virginia Cannabis Consultants
As Virginia continues to evolve its cannabis regulations, offering significant opportunities for both medical and adult-use markets, it is essential for businesses to navigate this complex landscape with expertise and precision. Cann Strategy stands ready to support your cannabis venture, providing comprehensive operational consulting to help you start, launch, or optimize your business.
Whether you are preparing for the next cannabis business license application window or seeking to enhance your current operations, our team of seasoned professionals is here to ensure your success. Partner with Cann Strategy to leverage our in-depth knowledge and experience, positioning your business at the forefront of Virginia's burgeoning cannabis industry. Contact us today to take the next step towards your cannabis business goals.
Book a free call with one of our consultants.
Book a free call with one of our consultants.