Recreational marijuana legalization is coming to Virginia

  • With 1 in 3 Americans now living in a state where adult pot use is legal, Virginia is no longer sitting on the sidelines. Over the weekend, local lawmakers narrowly approved compromise legislation that would make it the first state in the south to allow recreational marijuana. The bill now goes to Virginia Gov. Ralph Northam (D), who supports legalization, for his signature.
  • Fine print: The law would legalize the use of cannabis by people over the age of 21. It would also allow possession of up to an ounce by anyone over 21 and establish an agency to oversee regulation of the cannabis market. The state is hoping that its commercial recreational marijuana program could generate nearly $1.5B in annual sales within five years of the scheduled start on Jan. 1, 2024.
  • Specifics of the regulations were punted until next year, when they'll be decided by the legislature. Under discussion is the framework and criminal penalties for several offenses, including underage use and public consumption of marijuana. Currently, people under the age of 21 would face a $25 civil penalty and have to undergo treatment.
  • More details: Part of the bill is aimed at ending disparate treatment faced by people of color in the criminal justice system. The legislation calls for 30% of marijuana tax revenue to go to a fund aimed at communities historically over-policed for marijuana-related crimes. Some lawmakers and advocacy groups also complained the years-long waiting period needlessly extends unjust treatment, though others argued that going ahead without regulations could boost illegal pot sales.
  • Last week, Gov. Phil Murphy signed a series of laws that legalize the possession of marijuana for recreational use in New Jersey.
  • On the move premarket: Tilray (NASDAQ:TLRY) +4.6%, Aphria (NASDAQ:APHA) +4.3%, Aurora Cannabis (NYSE:ACB) +3.7%, OrganiGram (NASDAQ:OGI) +3%, Canopy Growth (NYSE:CGC) +1.6%, Cronos (NASDAQ:CRON) +1.5%. Jushi Holdings (OTCQB:JUSHF) is off 0.3% and Columbia Care (OTCQX:CCHWF) is unchanged.
  • Cannabis ETFs: Global X Cannabis (NASDAQ:POTX) +4.1%, AdvisorShares Pure Cannabis (NYSEARCA:YOLO) +3.6%, ETFMG Alternative Harvest (NYSEARCA:MJ) +2.9%, AdvisorShares Pure US Cannabis (NYSEARCA:MSOS) +1.3%, The Cannabis ETF (NYSEARCA:THCX) +0.4%.

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