Editor’s Note: Since this story was published, Virginia legislators in both the House of Delegates and Senate have voted to decriminalize marijuana as of March 8, 2020, as reported by The Washington Post.
Let’s get this right out there at the start: Buying, selling and consuming marijuana is illegal in the state of Virginia. Penalties are stiff. Prison time is serious.
Possession of medical marijuana in Virginia is also technically illegal. If you are caught with it, you have to prove an “affirmative defense”—a legal term that essentially means a patient must be able to produce a valid registration from a state-sanctioned dispensary to avoid criminal consequences.
But, businesses can sell the extract of marijuana (usually referred to as CBD oil) in Virginia if it comes from a Virginia hemp farm—but it can’t be brought in from other states (i.e., interstate commerce of the drug isn’t allowed). So, those CBD health and beauty products you’ve been buying at the mall? Unless they’re made in Virginia, they’re technically illegal to sell.
Is your head spinning yet?
Despite dozens of states legalizing marijuana for both medical and recreational use, the sale of the drug is still very much in Wild West territory. It’s a multibillion-dollar industry that can’t seem to find its way, skittering and sliding from hoped-for economic highs to reality-bitten lows. But no one is refuting that marijuana has raked in millions in tax revenues for states where it’s been legalized—and made millionaires out of startup revolutionaries in a business climate that many are saying is today’s version of yesterday’s dot com surge.
Which is one reason why, it’s fair to say, lawmakers in Virginia have been revisiting the idea of legalization in recent years.
Here in Virginia, much has been made of the state’s slow march toward marijuana legalization (and the debate over the boundaries of legalization and decriminalization is expected to heat up even more now that the statehouse has flipped blue), but there remains a dizzying amount of laws and regulations on the books that continue to create confusion over what’s allowed—and what’s not allowed—for businesses and the average recreational customer.
Even some cannabis entrepreneurs in the local industry say it’s still an enter-at-your-own-risk game at this point, as state and federal laws surrounding the nascent issue conflict. “When you are handed the documents from the state for the final review about your dispensary, the top page says [the state approval] doesn’t protect you from federal law,” says Aaron Lopez, a DC-based consultant working with Dalitso, a soon-to-open medical marijuana dispensary in Manassas.
Despite those gray areas, Virginia looks poised to capitalize on the business of cannabis.
Marijuana in Virginia – A History
The debate over marijuana legalization in Virginia actually dates back all the way to 1979, when legislation was passed allowing doctors to recommend (not prescribe) medical marijuana to ease the side effects of chemotherapy and the degenerative eye disease, glaucoma. Of course, the legislation was essentially moot as, at the federal level, marijuana was (and still is) a Schedule I controlled substance, meaning it’s illegal in all forms and considered just as harmful as fellow Schedule I drugs heroin, ecstasy and LSD.
But in 2015—as a domino effect of marijuana legalization was sweeping the nation (Colorado kicked it off in 2000 when it legalized medical marijuana and now 33 states, plus DC, have legalized it for medical purposes—and 11 of those also have legalized recreational use.)—Virginia’s movement toward legalization seemed to get legs. That year, the state legislature chose to provide the aforementioned affirmative defense for registered patients, caregivers and pharmaceutical processors. To have the cannabis oils, a patient or their caregiver would need to present their registration if they were stopped by law enforcement, or in a court of law as their defense for possession of the oil.
Then, new conditions for recommending marijuana in Virginia were added in 2018. Now a qualified medical marijuana patient can be treated for any condition or disease that a doctor deems appropriate. A doctor still can’t prescribe medical marijuana, but isn’t barred from recommending a trip to the dispensary.
And, around that same time, the state also approved the licensing of five medical marijuana dispensaries (the state refers to them as “pharmaceutical processors”). The dispensaries, including one here in Manassas that is slated to open this year, have been licensed to sell medical marijuana in Virginia, in the form of CBD oil or THC-A oil, which can have up to 5% THC, according to the Virginia Board of Pharmacy.
To be a qualified medical marijuana patient, Virginia residents must get certified by any one of 350 Virginia Board of Pharmacy-registered practitioners (which is a fraction of the more than 35,000 doctors registered to practice medicine in the state) and pay an initial $50 fee, plus a $50 renewal fee each year.
One of the licensed dispensaries approved by the Virginia Board of Pharmacy is Dalitso in Manassas, a 50,000-square-foot pharmaceutical processor growing its own cannabis and processing its own cannabis oils as outlined by the law.
“It’s been a long process,” says Lopez, the consultant representing Dalitso’s public and government affairs. “The state began a process about four years ago. But as soon as they accepted the applicants, they gave all of us about a year to get a final certification to be allowed to start growing, but not dispense anything.”
These were provisional licenses issued in December 2018. The state gave approved licensees until December 2019 to start growing, but, as of press time, Dalitso is still waiting for final approval of a permit to begin selling product. “So, it’s a very intensive ordeal to get all of that history and get it up and running by that time,” Lopez says.
Other approved dispensary applicants include Darma Pharmaceuticals in Bristol; Green Leaf Medical in Richmond; Columbia Care in Portsmouth; and PharmaCann in Staunton, all of which are in varying steps of the state approvals process.
In addition to the indoor pharmaceutical processors, Virginia lawmakers also recently amended regulations on hemp growing in the state to match the updated regulations in the 2018 federal Farm Bill, meaning farmers in Virginia can now grow hemp to produce CBD oil, which is seen in all sorts of skin care products and supplements advertising wellness benefits. Hemp is expected to be a cash crop for Virginia, replacing some of the state’s long-standing tobacco farms as sales of cigarettes wane.
A March Toward Legalization
On the business side, it would seem that the supply chain is now there. Farmers can grow, pharmaceutical processors can dispense, doctors can recommend and patients can consume. But, says Jenn Michelle Pedini, the development director of NORML (National Organization for the Reform of Marijuana Laws), a national, pro-marijuana legalization advocacy organization, and the executive director of NORML’s Virginia chapter, the next step advocates are pushing for is decriminalization and ultimately legalization of recreational use.
The recent rise of legalizing marijuana across the country has had little to no effect on Virginia. Arrests for possession of marijuana in Virginia rose to 28,866 in 2018, a 3.5% increase from 2017 and the most arrests in 20 years, according to the Virginia State Police Crime in Virginia report. And penalties are steep. Selling marijuana is a felony punishable by up to 10 years in prison.
But, with Democrats now holding a majority at the statehouse—the first time in 20 years—advocates are predicting swifter movement toward legalization.
“Now that the majority has shifted, that will create pathways for more robust reform, such as decriminalization or even legalization and regulation of adult use,” Pedini says.
The hope, says Pedini, is after two years of pushing for decriminalization, Governor Ralph Northam will have more support for bills that would decriminalize marijuana possession and expungement of marijuana arrest records—bills that were defeated in the 2019 legislative session. But, “It all comes down to what the committees want to do,” says Pedini.
And, not everyone is in favor of legalizing marijuana. Luke Niforatos, chief of staff and senior policy advisor for Alexandria-based Smart Approaches to Marijuana (SAM), one of the largest and most well-funded nonprofits generally viewed as an anti-cannabis advocacy organization, says there is a misinterpretation of polling figures that indicate a majority of Virginians are in favor of wholesale legalization.
“We have not done a poll in Virginia, but other polls that ask yes or no for legalization need to ask a more accurate question, which is, ‘Which policy of medical or decriminalization or recreational or completely prohibited do you favor?’ The vast majority will say that they want other options other than complete legalization,” says Niforatos.
Niforatos says that there’s a false dichotomy out there to say it’s either legalize it wholesale and have commercialization or throw everybody in prison. “We reject that notion. We can and should decriminalize and reform laws. But we should not fully legalize it,” he says.
CBD and the Wellness Trend
Meanwhile, the train seems to have left the station when it comes to recreational use of CBD oil, despite the fact that, here in Virginia, it’s sold within a cloud of legal uncertainty.
Cannabidiol (CBD), the most popular type of marijuana product that can be seen at your local shopping malls, pharmacies and many other stores across the state, is derived from hemp—which is actually a species of marijuana called cannabis sativa, one of the three species of cannabis. CBD does not contain psychoactive components like other parts of the marijuana plant and therefore does not cause a high.
But those CBD products (think CBD-infused lotions, tinctures and vitamins) are illegal too, according to the Food and Drug Administration (FDA).
According to Amy Abernethy, principal deputy commissioner of the FDA, in testimony before the Senate Committee on Agriculture, Nutrition, and Forestry on July 25, 2019, the passage of the 2018 Farm Bill has led to the misperception that all products made from or containing hemp, including those made with CBD, are now legal to sell in interstate commerce. “At present, any CBD food or purported dietary supplement products in interstate commerce is in violation of the Federal Drug and Cosmetic Act (FD&C),” adding that the FDA is wrestling with questions not only about the intrinsic safety of CBD, but also about potentially unsafe manufacturing processes for products containing CBD.
“The FDA knows from CBD products it has tested that they may not contain the amount of CBD indicated on a label, or they may contain other potentially dangerous compounds that are not listed on the label,” Abernethy says.
The organization has formed a working group that will, in part, examine the future of CBD as a food and dietary supplement product that would be directly available to a wide range of consumers, which could potentially include pregnant or nursing mothers, children, the elderly, those with chronic illnesses and those taking medications that might interact with CBD.
But the hard reality for any cannabis-related business is that marijuana right now, today, is still considered an illegal drug under federal law.
However, that hasn’t stopped businesses from capitalizing on the purported positive effects of marijuana, and particularly CBD oil, with claims ranging from using it as an alternative to anxiety medication to easing nausea to treating cancer. It should be noted that studies have suggested CBD and medical marijuana can help with ailments from depression to epilepsy, but, as a Schedule I drug, funding for scientific tests can be hard to come by.
Which is why it’s been touted simultaneously as the wonder drug of the age and the latest snake oil of smarmy marketers.
In Northern Virginia, CBD oil-infused products are easy to access. Look to many drugstore chains, grocery stores, mall kiosks, spas and other proprietors with products that fall under the “wellness” buzzword, and you’ll find an array of products promising to help you chill out.
But, “It is illegal in the eyes of Virginia law to sell these products,” Pedini says, if they’ve come from across state lines. “The only types of product like that that comports with state law would be products made by Virginia-licensed hemp processors that have been approved for sale by the Virginia Department of Agriculture and Consumer Services (VDACS).”
“There isn’t a THC or CBD product in the state that is legal. There may be some legal products from research done under the Farm Bill regulations in 2014. But the misunderstanding under the 2018 bill stems from the fact that the FDA has not given its OK, and Virginia doesn’t have a plan in place,” says Lopez, the consultant for Dalitso, noting that the 2014 Farm Bill only protected cannabis growers registered with the state’s hemp research pilot (and couldn’t have more than 0.3% THC in the plant). In 2019, updated laws allowed Virginia hemp farmers to register for commercial production (without the research requirement).
He continues: “VDACS doesn’t have a plan in place. And they are waiting for the USDA to come up with their regulations before they can develop their plan. So far, without that, nothing can cross state lines.”
In January 2020, the state of Virginia submitted its hemp farming oversight plan to the USDA and is currently waiting for approvals.
A Need for Regulations
Despite lobbying groups on both sides of the issue arguing for and against legalization, there does seem to be some common ground when it comes to regulations.
Lopez says that the concern about regulations is really at the heart of the CBD sales issue. Major drugstore chains are selling CBD products out in the open, and that adds a new level of credibility to the product. “When you walk into a pharmacy and you see a CBD product there, you think, ‘Oh, it has to be legal or it wouldn’t be sold here,’” Lopez says. “If a pharmacist comes and talks to you about a product, you automatically think it’s been tested, it’s been certified. But there isn’t a single pharmacist in the state of Virginia, or a store, that should be selling any CBD products.”
Representatives for NORML echo those concerns. According to NORML, in recent years, marketers have advertised a variety of CBD-related products online and in other venues. However, third-party analytical testing, including by the FDA, of some of these products has consistently found them to be of varying quality and safety.
In some instances, products have been found to contain far lower percentages of CBD than advertised. In other instances, products alleging to be THC-free have been found to possess THC, as well as other psychotropic adulterants (THC, or tetrahydrocannabinol, is the main psychoactive component in cannabis).
One lab study by Medicinal Genomics Corporation—a research company using cannabis genetics to test for the safety and efficacy of the plant—found that there can be THC on hemp seeds from the external contact of the seed hull with cannabinoid-containing resin leaves during maturation, harvesting and processing.
In almost all instances, commercially available CBD products contain far lower quantities of CBD than are necessary to yield therapeutic effects in clinical trials.
That concern for consumer safety is echoed by Niforatos of SAM.
“All of those products in those stores are completely unregulated products,” Niforatos says. “We have no idea what is in those products. There is no guarantee that there is no THC in those products because no one is testing them. So at this point, it is buyer beware.”
Niforatos argues that all the claims of CBD are either untrue, or way out ahead of the scientific evidence. There is no scientific basis for curing cancer, for example, which some CBD makers have stated, and the FDA has been chasing and fining companies who make such claims.
Vaping and the Cannabis Crisis
In 2019, reports started coming in of unexplained deaths related to e-cigarettes. As of January 2020, the Centers for Disease Control reported 60 deaths connected to the so-called “vaping crisis” and, as more research was done, the blame fell to corrupted cartridges in vape pens.
The cause of deaths now appears to lie with vitamin E oil in the cartridges. Essentially, the oil dilutes the THC or nicotine in the cartridge, but hardens once smoked—and hardens in the lungs, coating the lungs and causing distress or even death. Most of the faulty pens appear to have come from the underground market. But since the vape pens contained THC in some cases, the deaths marked the biggest PR crisis to hit the cannabis industry since legalization started. “THC-containing products continue to play a major role in the outbreak,” according to a recent report by the Centers for Disease Control and Prevention.
Despite the cause of death not being directly linked to THC, the vaping headlines have been responsible for a short-term decline in the rapidly growing industry. Sales fell 21% from August to September 2019, which falls in line with the timing of the first vaping-related death headlines, according to a recent report from BDS Analytics, a market research firm tracking the cannabis industry. Stocks for several publicly traded cannabis companies also fell anywhere from 25% to 40% in August, though both sales and stock appear to be rebounding as the vaping crisis wanes.
But both proponents and opponents point to this crisis as proof that the cannabis industry needs more formal regulation to guard against black market sales, with stricter testing on all products, enforcement of seed-to-sale tracking compliance and other guidelines and procedures typically in place for other big cash crops and pharmaceuticals.
The Future of a New Industry
Despite the setbacks, advocates agree that legalization is on the horizon in
Virginia, as the state continues loosening restrictions on marijuana use.
Dalitso is set to open its doors in the near future, pending final state approvals, and is anticipating serving thousands of medical marijuana customers.
Meanwhile, the debate continues in Virginia and beyond. Does the nationwide landscape have any bearing on state action? Pedini, of NORML, says that any movement of any bills in Congress, such as the STATES Act (ending cannabis prohibition at the federal level and letting the states make their own rules) and the SAFE Banking Act, allowing cannabis businesses to use banking services like any other business, won’t have any effect on movement of bills in Virginia. “These broader policy changes really don’t move the needle in the committee,” Pedini says. But, “The general consensus is that we are two to three years away from ending cannabis prohibition across the country.”
Dale Sky Jones, who led legalization efforts in California as legislative liaison and a founding member of the National Cannabis Industry Association, says she would point out two things to Virginia legislators. “No. 1, it is worth it. [Studies show] you will see a reduction of violence at home, reduction in suicides, reduction in overdose deaths because having a safer alternative will also make safer communities,” she says. “And you can do it, conservatively and slowly. Cannabis will continue to be sold in the state, and it’s up to you if the proceeds go to buy guns or books. You have an opportunity to separate the good from the bad by simply regulating the people who want to play fair, and pay their taxes and come out into the light and be a regulated market.”