SEPTEMBER 22, 2022

Virginia Cannabis Companies are Expanding Medicinal Facilities Despite Uncertainties over Adult-Use Sales

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Cannabis multistate operators in Virginia are focusing on expanding their medicinal cannabis facilities as they wait to see if the commonwealth’s adult-use program will begin in 2024 as anticipated, given that Republicans control most of the state government.

Virginia lawmakers adopted legislation last year to establish the South’s first commercial recreational cannabis industry. Democrats ruled the state at the time.

However, sources noted that a 2024 launch is far from likely, after Republicans retook the state House of Delegates and the governor’s palace last November, casting doubt on the impending recreational market – and its structure.

Meanwhile, executives from Florida-based Jushi Holdings and New York-based Columbia Care, both of which hold MMJ licenses in Virginia, say they’re focused on opening the six total dispensaries permitted by state law.

They are also constructing infrastructure like as grow rooms and industrial facilities.

“We are working tirelessly on expanding up our entire array of grow rooms,” said Trent Woloveck, Jushi’s chief commercial director, adding that the firm recently launched its third store in Alexandria in July.

Jushi also operates dispensaries in Manassas and Sterling, both of which are in the Washington, DC metropolitan region.

“Our Fairfax shop will open before the end of the month,” Woloveck stated. “We’ve recently begun work on our fifth store in Arlington, and we’re finalizing our sixth location in Woodbridge and building up that facility.”

The improvements in patient access are especially noteworthy.

Previously, patients had to wait up to six months after receiving a physician’s medicinal cannabis prescription to receive the proper papers from the state Board of Pharmacy.

This restriction has been removed, bringing medicinal marijuana more in line with standard prescriptions.

“With the increased patient access… we’re very focused on having all of our satellite locations up and running so we can service as many as possible,” said Ngiste Abebe, vice president of public policy at Columbia Care.

Cresco Labs, located in Illinois, is expected to purchase Columbia Care, but the deal hasn’t finalized yet, and Cresco Labs sent inquiries concerning Virginia to Columbia Care.

According to the company website, Columbia Care now has four of its maximum six dispensaries in the state: Portsmouth, Virginia Beach, Richmond, and Short Pump.

According to the 2022 MJBiz Factbook, the Virginia medical market, which debuted in 2020, is expected to generate up to $25 million in sales this year and up to $95 million by 2026.

In addition to Columbia Care and Jushi, additional licensed medical cannabis businesses in Virginia include Green Leaf Medical, a Maryland-based multistate operator, and Dharma Pharmaceuticals, a Virginia-based firm.

The debut of the recreational market is in doubt

Perhaps the most significant development in Virginia this year has been the failure to pass two legislation that would have paved the way for the state’s recreational marijuana industry.

According to the MJBiz Factbook, the recreational market is expected to reach $500 million in sales in 2024 if it debuts as scheduled, and might approach $1 billion in sales in 2026.

Republican leaders in the House of Delegates tabled the two legislation, House Bill 430 and Senate Bill 391, according to JM Pedini, executive director of Virginia NORML.

Pedini highlighted that the Senate bill breezed through the Democratic-controlled upper chamber but never made it out of committee in the Republican-led House.

“There is not a single committee chair in the House of Delegates who would let an adult-use retail bill to progress to the floor,” Pedini added.

As a result, Pedini does not expect the recreational market will open in January 2024 as planned.

“Is it really conceivable to have adult-use retail sales on January 1, 2024, given the Virginia Republican-controlled House of Delegates’ utter inability to move forward with any adult-use legislation?” Pedini inquired rhetorically.

“The short response is ‘No.’… There will be no way until and until House leadership agrees to emphasize retail sales…”

Woloveck, on the other hand, believes that economic and public-health concerns will drive the Virginia GOP and Gov. Glenn Youngkin to stick to the original plan for a regulated adult-use market in 2024.

A request for response from Youngkin’s office was not returned.

Woloveck says the governor and House Republicans want to take their time to ensure that opening a recreational market has no detrimental consequences for public health.

He cited the restriction on hemp-based delta-8 items established during the last parliamentary session, as well as the MMJ program extensions, as part of that goal.

Woloveck also stated that the Republicans are still debating a policy approach to adult-use marijuana.

“The governor has continued to demonstrate good faith in his desire to learn… and get an adult-use program.”

“It seems reasonable that the Republicans would obtain something that goes into effect on 1/1/24, because adult-use sales are legal on that day,” Woloveck said.

He went on to say that his understanding of the legislation passed in 2021 that legalized adult-use marijuana and established the Jan. 1, 2024, start date for sales is that the launch isn’t changeable; it’s written into law.

The only question is whether Republican lawmakers and Youngkin can reach an agreement on a legislative framework to oversee those transactions.

“I think the Legislature and the governor will continue to advocate for it because they see the need from a public safety and law and order standpoint,” Woloveck said.

Abebe of Columbia Care was more reserved.

“I believe a bipartisan agreement is perfectly achievable.” I also don’t think it’s a foregone conclusion” that recreational sales will commence on schedule in 2024, according to Abebe.

“I’d be incredibly impressed if we could complete everything this year and have adult-use sales begin on January 1, 2024, but I also believe there’s a lot of work to be done to accomplish anything like that.”

In any case, Abebe believes there will be no definitive answers to the rec market question for some time.

“I believe we’ll see greater activity through September.” “However, regardless of who is in charge, making cannabis the No. 1 concern for everyone is tough,” she added.

For the time being

Pedini claims that since adult-use possession and consumption – but not sales – were legalized last year, the illicit market has begun to develop in the absence of a state-regulated industry to suit consumer demand.

Pedini noted that it throws a kink in the works since many of those illicit firms offer cannabis of doubtful quality, which might lead to a public health problem.

“Pop-ups are undeniably popular. They weren’t previously, but they are now, according to Pedini.

“People see these things, these dispensaries, and they walk in and buy these entirely unregulated items, and everyone knows unregulated products are a hazard to consumer health.”

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