Virginia

Equity Project State Briefing

Social Equity

Social Equity Definition / Criteria

  • i. Previous Cannabis Conviction:
  • ii. Income:
  • iii. State Residency:
  • iv. Qualifying Neighborhood / Municipal Residency:

Within Virginia’s adult use sector a social equity license applicant  is a person who has lived or been domiciled for at least 12 months in the state and is either 

(i) an applicant with at least 66 percent ownership by a person or persons who have been convicted of a certain misdemeanor marijuana offenses; 

(ii) an applicant with at least 66 percent ownership by a person or persons who is the parent, child, sibling, or spouse of a person who have been convicted of a certain misdemeanor marijuana offenses; 

(iii) an applicant with at least 66 percent ownership by a person or persons who have resided for at least three of the past five years in a jurisdiction that is determined by the Board after utilizing census tract data made available by the United States Census Bureau to have been disproportionately policed for marijuana crimes;

 (iv) an applicant with at least 66 percent ownership by a person or persons who have resided for at least three of the last five years in a jurisdiction determined by the Board after utilizing census tract data made available by the United States Census Bureau to be economically distressed; or 

(v) an applicant with at least 66 percent ownership by a person or persons who graduated from a historically black college or university located in the Commonwealth.

Source:

Va. Code § 4.1-606. Subsection 13

Social Equity Provisions

Social Equity provisions have yet to be established by the board. However, the law requires the creation of a program to provide loans to qualified social equity cannabis licensees for the purpose of promoting business ownership and economic growth by communities that have been disproportionately impacted by the prohibition of cannabis.

While still being developed, the  social equity  program should:

  1. Identify social equity qualified cannabis licensees who are in need of capital for the start-up of a cannabis business properly licensed;
  2. Provide loans for social equity operators;
  3. Provide technical assistance; and
  4. Bring together community partners to sustain the Program.

Source:

Va. Code § 4.1-1502. Subsection (b)

License Priorities and Set Asides

  • License Priorities / Set Asides:
Yes

Social Equity provisions have yet to be established by the board. However the law requires the board to establish standards and requirements for (i) any preference in the licensing process for qualified social equity applicants, (ii) what percentage of application or license fees are waived for a qualified social equity applicant, and (iii) a low-interest business loan program for qualified social equity applicants.

Source:

Va. Code § 4.1-606. Subsection 15

Fee Waivers and Reductions

  • Fee Waivers / Reductions:
Yes

Social Equity provisions have yet to be established by the board.  However the law requires the board to establish standards and requirements for (i) any preference in the licensing process for qualified social equity applicants, (ii) what percentage of application or license fees are waived for a qualified social equity applicant, and (iii) a low-interest business loan program for qualified social equity applicants.

Source:

Va. Code § 4.1-606. Subsection 15

Other Financial Support for Social Equity Applicants and Licensees

Virginia has not yet announced how much money will be provided to specifically support its social equity program, nor whether the funds will be available to program participants prior to the states first commercial cannabis sales in 2024.

The law does however establish the Virginia Cannabis Equity Business Loan Fund, which is derived from the Cannabis Equity Reinvestment Fund. Money in the Equity Business Loan Fund  shall be used  only for the purposes of providing low-interest and zero-interest loans to social equity qualified cannabis licensees in order to foster business ownership and economic growth within communities that have been the most disproportionately impacted by the former prohibition of cannabis. 

The wider Cannabis Equity Reinvestment Fund will receive 30% of all tax profits (an estimated $26 million in the first year of sales and $128 in the fifth). Funds  will be used for the following activities. 

  1. Supporting persons, families, and communities historically and disproportionately targeted and affected by drug enforcement;
  2. Providing scholarship opportunities and educational and vocational resources for historically marginalized persons, including persons in foster care, who have been adversely impacted by substance use individually, in their families, or in their communities;
  3. Awarding grants to support workforce development, mentoring programs, job training and placement services, apprenticeships, and reentry services that serve persons and communities historically and disproportionately targeted by drug enforcement.
  4. Contributing to the Virginia Indigent Defense Commission and
  5. Contributing to the Virginia Cannabis Equity Business Loan Fund (as described above)

Source:

Va. Code § 4.1-1501. Virginia Cannabis Equity Business Loan Fund
Va. Code § 2.2-2499.4. Cannabis Equity Reinvestment Fund
Cannabis in Virginia, Frequently Asked Questions "What will Virginia’s law do to promote social equity?". Retrieved January 7, 2022

Other Licensing Provisions

License Caps

  • License Caps:
Yes

Virginia has licensing caps as it is a limited license state. The licensing cap for Marijuana cultivation facilities is 450. The cap for marijuana manufacturing facilities is 60. The cap for marijuana wholesalers is 25. The cap for retail marijuana stores is 400.  No person shall be granted or have interest in a license in more than one of the following license categories: marijuana cultivation facility license, marijuana manufacturing facility license, marijuana wholesaler license, retail marijuana store license, or marijuana testing facility license. Local municipalities are not able to opt out of participating in the adult use sector.

Source:

Va. Code § 4.1-606. Subsection 19(c)
Va. Code § 4.1-630. Subsection (a)
Va. Code § 4.1-805. Subsection (b)

Application Selection Process

  • Selection System:
TBD

The Virginia board has not yet established a  licensure selection system for their adult use sector.

Felony Disqualification on Ownership

  • Ownership Exclusion for Felony Convictions:
Yes
  • Exemption for Cannabis Offenses:
Yes

Virginia’s adult use framework disqualifies applicants for cannabis licensure on the basis of certain convictions. In Virginia, the board may refuse to award an adult use  license if the applicant  has been convicted of any crime involving moral turpitude within 7 years of the date of the application or has not completed all terms of sentencing and probation resulting from the felony conviction. However, the board may not disqualify an applicant because of a past conviction for a marijuana-related offense.

Source:

2020 Va. HB 2312. § 4.1-809. Subsection c; § 4.1-1000. Subsection b

Employee Criminal Records

  • Conviction Restrictions for Employees:
TBD
  • Exemption for Cannabis Offenses:
Yes

While adult use sector regulations have not yet been released, any employment background screening will have to be in compliance with Virginia’s Ban the Box legislation which took effect July 1, 2020. Under the state’s Ban the Box provision, employers, educational institutions, and state and local governments will be prohibited from requiring job applicants to disclose information related to simple marijuana possession charges in any application, interview, or during any other part of the hiring, admission, or licensing process.

Source:

Va. Code § 19.2-389.3. Marijuana possession; limits on dissemination of criminal history record information; prohibited practices by employers, educational institutions, and state and local governments; penalty

Availability of Expungements

  • Expungements:
Yes, Automatic

Virginia offers record cleaning for certain cannabis convictions. The expungement process is automatic for cannabis misdemeanor convictions. Felony cannabis convictions are eligible for expungements. However, the process is not automatic.

Source:

Va. Code § 19.2-392.2:1. Former marijuana offenses; automatic expungement
Va. Code § 19.2-392.2:2. Former marijuana offenses; petition for expungement
(Both recently amended by 2021 House Bill No. 2113. )
Virginia Legislative Information System HB 2113. Criminal records; sealing of records, Sealing Fee Fund created, penalties, report. Retrieved January 7, 2022