Virginia Lawmakers Pass Bills To Sell Marijuana And Modify The 280E Tax!

Legislators in Virginia adopted proposals on Friday that would legalize the sale of marijuana for adult use and permit cannabis businesses to claim some tax deductions at the state level while being prohibited from doing so at the federal level under Internal Revenue Service (IRS) code 280E.

Sen. Adam Ebbin was the only vote in favor of the 280E measure, which was approved by the Senate 40-0. (D). With a vote of 7-1, the House of Delegates counterpart version from Delegate Jeffrey Campbell (R) passed the Appropriations subcommittee and will now be considered by the entire panel.

As legislators in numerous states, including New Jersey, New York, and Pennsylvania, have sought to do, the legislation aims to separate Virginia’s marijuana industry’s ties to the federal tax code. Businesses that sell medical and recreational cannabis in the state would be entitled to deduct expenses that they are currently prohibited from deducting under IRS code 280E on a federal level.

Separately, the Rehabilitation and Social Services Committee of the Democratic-controlled Senate voted 9–6 to forward a bill by Ebbin allowing adult-use marijuana sales to the Finance and Appropriations Committee.

After lawmakers enacted a bill in 2021 legalizing marijuana possession for anyone age 21 and over, there have been unanswered issues regarding how the state legislature will handle cannabis commerce for adults in the 2023 session. Sales-related sections in that legislation had to be re-enacted, and in 2022, with a new Republican governor and a GOP-controlled House of Delegates, lawmakers did not take any action on the matter.

Since then, the House has been a sticking point for supporters since lawmakers are sharply divided over how to move forward with a potential commercial market. The recreational cannabis market will open on January 1, 2024, under the proposal that was approved by a Senate committee on Friday.

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Sales would occur at both current medical marijuana dispensaries and brand-new establishments owned by those who reside in “historically economically disadvantaged communities.” These operators would get instruction and assistance from current marijuana businesses.

The updated legislation now allows for the resentencing of individuals who are currently detained on cannabis-related offenses. If the idea ever passes the full Senate, which is still controlled by Democrats, it is uncertain if the House would be willing to support it. In recent weeks, numerous proposals intended to provide a framework for regulated sales have been proposed by GOP lawmakers.

https://www.facebook.com/watch/?v=3507614572850684

Early in the previous year, a House panel failed to pass legislation regulating marijuana sales. While some advocates, like those with Virginia NORML, have urged lawmakers to permit sales to start as soon as possible so that customers can access regulated products, others have voiced concerns that giving current medical cannabis businesses a head start in the recreational market could ultimately undermine equity for communities that have been targeted by the war on drugs.

Marijuana Justice, one of the most outspoken advocates for equity interests, hailed the amended alternative text of Eb bin’s sales legislation as “a significant victory” since it “reflected the public concerns regarding exclusive early sales and the criterion for the opportunity.”

The group wrote in an email to supporters, “The current replacement stipulates that if medical operators were to start sales first, then a 1:1 ratio must be met between medical operators and small company franchisees.” Additionally, the requirements for receiving cannabis possibilities in particular Virginian regions were made clearer.

The @vasenate Rehabilitation & Social Services Committee just advanced my SB 1366 to establish The Virginia Cannabis Business Incubator Project to support disadvantaged and undercapitalized farmers/entrepreneurs craft a boutique cannabis market. pic.twitter.com/pNQrtGZ37b

— Jennifer McClellan (@JennMcClellanVA) January 27, 2023

A bill by Sen. Mark Obenshain (R) that broadly aims to extend alcohol advertising restrictions to marijuana advertisements was also approved by the Senate earlier this month. The Senate Rehabilitation and Social Services Committee recommended further bills on Friday that deals with the safety of cannabis products, inhalable products, increasing cultivation operations, and creating a “Cannabis Incubator Project” to the Finance and Appropriations Committee Committee.

A Senate Education and Health subcommittee also decided to forward two bills pertaining to the development and administration of the state’s medical marijuana program to the full panel. A bill to create a statewide psilocybin advisory board and transfer the psychedelic to lower scheduling under California law was soundly passed by that same subcommittee earlier on Friday.

The decision was made roughly a week after a different Virginia House of Delegates panel rejected a proposal to legalize the use of psilocybin for serious medical problems with a doctor’s prescription. Despite not being in favor of re-criminalizing marijuana possession, Gov. Glenn Youngkin (R) has stated that there is “still work to be done” before he supports the development of a market for commercial sales and cultivation.