The Virginia Legislature recently moved an adult-use cannabis bill to Gov. Glenn Youngkin’s desk, but his office has remained vague when asked whether he’d sign it.
But choosing not to do anything might be his actual strategy, and that could establish the state as the first in the South to allow regulated recreational sales of cannabis, MarketWatch reported.
The legislation, which has cleared both the state Senate and the House of Delegates, awaits Youngkin’s signature, veto, or amendment. Under Virginia law, if Youngkin doesn’t take action within 30 days after the legislature adjourns, the bill will automatically become law. That differs from other states where governors can prevent legislation from becoming law through inaction, known as a “pocket veto.”
Youngkin, who previously expressed disinterest in cannabis legislation, might be undertaking this strategy to achieve his bigger goals. By allowing the bill to become law without his signature, he could maintain a stance of nonengagement while avoiding direct confrontation with a growing number of Virginians who support cannabis reform.
At the same time, such a choice could help sell Youngkin’s effort to relocate the Washington Capitals National Hockey League team and the Washington Wizards National Basketball Association team to Northern Virginia. Some state Democrats have indicated that their backing for the new sports arena could be contingent on the governor’s approval of the cannabis bill.
“The Democrats see it as a bargaining chip for sports team votes,” Irina Dashevsky, partner and co-chair at Greenspoon Marder, told the outlet.
SB 448 proposes the creation of a regulatory framework for the retail sale of cannabis in Virginia, with tax revenue benefits and a planned market opening as early as May 1, 2025.
Adults would be allowed to purchase up to 2.5 ounces of marijuana or an equivalent amount of other cannabis products per transaction, with the applied taxes. The legislation also sets a total tax rate for marijuana purchases at 11.625%.
Currently, the state permits adult use and home cultivation of cannabis, but it doesn’t not allow retail sales.
Despite the bill’s passage through the legislature, sources told MarketWatch there may not be enough votes to override a veto from Youngkin, should he decide to reject the measure. The governor also has the option to propose amendments, sending it back to the legislature for further consideration.
The medical market in Virginia already includes public players such as Jushi Holdings Inc. (OTCQX: JUSHF) and The Cannabist Company Holdings Inc. (OTCQX: CBSTF), formerly known as Columbia Care.
The development comes as several other states are trying to tackle the adult-use cannabis question this year, despite the ebbs and flows of rescheduling excitement. Neighboring Maryland’s adult-use market had a hot start by most metrics.
Still, it’s starting to seem like Virginia is teetering toward an industry win. The outcome could set a precedent for other Southern states, such as Mississippi, which so far has one of the most promising medical programs.
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