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House Republicans begin retail marijuana debate with focus on lower taxes and school funding
Del. Michael Webert's proposed bill would cut taxes on marijuana sales in half
GOP lawmakers in the Virginia House of Delegates are taking their first stab at legislation to open the retail marijuana market, introducing bills that would lower the tax rate on sales and redirect proposed social equity funding to school infrastructure.
But leadership in the chamber stressed that the effort remains very much a work in progress and that they expect plenty of changes as the legislation makes its way through the committee system.
While his bill largely tracks with legislation introduced by Democrats in the House and Senate, it diverges in a few key areas.
First, it halves the proposed tax rate on retail sales from 21% to 10%, which would be the lowest in the country. Webert called the step important to compete with the black market, citing the experience of California, where the combined tax rate on sales is just over 36%.
“They have an ungodly huge black market,” Webert said.
“So we don’t want the taxes so high that we drive things to the black market.”
His bill also changes how the money would be spent.
Social equity and schools
Democrats centered their legalization effort around social equity provisions aimed at making amends for disproportionate enforcement of marijuana laws in Black communities. To that end, they proposed that 35% of tax revenue from marijuana sales be dedicated to a Cannabis Equity Reinvestment Fund, which the law proposed be dedicated to providing scholarships, community programs and business loans to people and communities “historically and disproportionately targeted and affected by drug enforcement.”
Referendums, unions and resentencing
The bill also includes subtler departures from the approach proposed by Democrats. For instance, both bills allow localities to hold referendums to opt out of marijuana sales, but the GOP bill would bind towns to the decision of their surrounding county while the Democratic bill treats them as independent jurisdictions. (Legislation from two GOP delegates goes further, barring any retail marijuana stores unless sales are specifically approved by a local referendum.)
The GOP bill also drops languages that would block local governments from passing new zoning rules that apply only to marijuana businesses.
Both chambers have also introduced separate legislation to move the date retail sales can begin from 2024 to 2023 — a key recommendation from lawmakers tasked with studying the issue over the summer.
The chambers differ, however, on whether to include large hemp processors in the stop-gap program. The House version limits early sales to existing medical producers. The Senate version allows large industrial hemp processors to also enter the market early.
So far, none of the bills have been docketed in the House of Delegates and it remains unclear when debate on the measures will begin in earnest.
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