Virginia’s new cannabis authority faces more responsibilities, possible budget cuts

Lawmakers have signaled they want the new Virginia Cannabis Control Authority to take over the state’s medical marijuana program and act as the main enforcer of stricter rules on cannabis-related advertising.

But the authority, which is still staffing up after being established in 2021, is also battling the prospect of a major budget cut included in an initial spending plan approved last month by the Republican-controlled House of Delegates.

At a meeting of the five-member cannabis authority board Wednesday, Chief Administrative Officer Jamie Patten said the authority has told policymakers it’s concerned about the proposed budget cut and “what it would mean to us being able to operate.”

“Of course, now we’re in this limbo where the session ended,” Patten said, referring to the General Assembly’s decision to adjourn Saturday without a finished budget.

Lawmakers’ differing approaches to how fast the state should stand up an independent authority to act as a cannabis-focused equivalent of the state’s alcohol authority highlights Virginia’s still-jumbled approach to marijuana and hemp.

The House’s proposed funding reduction for the cannabis authority would drop its budget from $8.2 million to $3 million in the current fiscal year. The authority’s funding would fall from $11.2 million in the next fiscal year to $3 million. The larger amounts the House moved to cut were included in the budget plan Gov. Glenn Youngkin proposed late last year.

It’s unclear if the funding reduction will or won’t be included in a final budget deal worked out by Republicans and Democrats over the next few weeks. The budget plan approved by Senate Democrats boosted funding to the authority by $6 million in anticipation of building “the regulatory structure for legal cannabis sales in the Commonwealth.” The Senate budget also provided $1 million in local grant funding for “cannabis youth prevention programs,” an item that wasn’t included in the House budget.

“The key to successful prevention campaigns is ensuring that they are deployed well ahead of policy changes such as cannabis legalization,” the Senate’s budget document says.

The cannabis authority was created as part of the push to decriminalize possession of small amounts of marijuana and move toward a legal, regulated market for recreational marijuana sales. Its size and scope have been somewhat unclear, however, because Republican victories in Virginia’s 2021 elections meant the Democrats who put the state on a path to a state-sanctioned marijuana industry no longer had the power to complete the task they started.

In the legislative session that just concluded, Republican leaders pushed to crack down on hemp products that contain intoxicating THC. But they refused to move forward with legalizing retail marijuana sales, frustrating both proponents of fully legalized weed and businesses that sell hemp-derived products like delta-8 and might be forced to stop selling anything that contains intoxicating amounts of THC.

The cannabis authority is stuck in the middle of that dispute.

On its website, the authority is described as “the principal source of government expertise on cannabis” with “authority to develop, issue and enforce rules pertaining to the existing medical cannabis market and a prospective adult-use retail market.”

The authority is also responsible for public awareness campaigns focused on mitigating the potential harms of marijuana use. It currently has an advertising push underway warning about the dangers of driving while high.

At the start of 2024, the cannabis authority will take on oversight of the medical cannabis program that’s been under the purview of the Virginia Board of Pharmacy, which awarded the state’s first dispensary permits in 2018.

At least one cannabis authority board member expressed confusion Wednesday about how the authority could run an effective medical marijuana program given state and local authorities’ seemingly lax enforcement approach to unregulated or illegal cannabis shops.

“To me, it puts us in a very difficult situation from a health policy perspective. As soon as something happens, I would imagine somebody’s going to be looking to point fingers at who’s regulating this,” said board member Michael Massie, a lawyer, and former Portsmouth prosecutor. “I just don’t know how we could do what we’re supposed to do effectively.”

Cannabis authority Acting Head Jeremy Preiss said Massie had “identified a gap” and suggested the authority could engage local law enforcement and the attorney general’s office on ways to “protect the integrity” of the medical program.

“Our formal enforcement responsibilities will be confined to the medical program itself,” Preiss told the board. “We don’t have enforcement authority on other entities.”

The new bill cracking down on THC-infused hemp products, which is awaiting action by Youngkin, would empower the authority to look into possible violations of other cannabis rules, but only at the request of the Virginia Department of Agriculture and Consumer Services, currently the main regulatory agency for hemp products, or the attorney general’s office. The bill would allow the authority to “request, but not require, an appropriate legal official to bring an action to enjoin such violation.”

The legislation also instructs the cannabis authority to study how other states handle smokable and edible hemp products and report its findings to the governor and the legislature by Nov. 1.

A separate bill sent to the governor would enact stricter advertising rules for marijuana and other THC products. It would bar the promotion of illegal products, deceptive or unproven messaging, and the use of cartoons or other methods to appeal to people under 21 and would restrict outdoor advertising within 500 feet of houses of worship, schools, playgrounds, and substance abuse treatment facilities. The bill would make the cannabis authority responsible for enforcing those rules and would also allow the authority to make exceptions to the advertising rules when warranted.

Before a public comment section at Wednesday’s meeting, Preiss, the authority’s acting chief, issued a disclaimer noting the cannabis authority doesn’t decide what the state’s cannabis laws should be.

“We don’t make policy,” he said. “We implement, explain and provide advice on policies made by elected officials.”

Youngkin is expected to act on all pending bills by April 12, when the legislature will reconvene to take up any gubernatorial amendments and vetoes.