Tuesday, September 28, 2021

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Legalizing Marijuana: What Individuals And Businesses Need To Know

On July 1, 2021, Virginia officially legalized marijuana, meaning that it is now legal for individuals 21 years of age and older to have up to one ounce of marijuana for personal use. Consuming it in public or offering it to others in public remains illegal, with first offense fines running $25. The law also allows people to grow up to four plants per household (not per person) at their primary residence as long as the plants are not visible from the streets. The plants also need to be labeled and out of reach of children. Retail sales of marijuana will continue to be illegal until 2024 when state-sanctioned shops will be licensed to sell.

However, there is still more to the equation that many people don’t understand, which is why the Virginia Peninsula Chamber of Commerce recently hosted an online panel titled, “In the weeds in the 757” as part of their “Eyes on the Future” series. The discussion centered around what the new law means for individuals, but also for business owners and their rights and responsibilities when it comes to employees who partake in the use of marijuana.

For example, the regulatory and licensing part of the bill that was passed this year needs to be re-enacted in 2022. Next year’s General Assembly will have to vote on it again or it won’t become law.

Reports found that Virginia could see incredible economic development because of a legal cannabis industry. It could create as much as 18,000 jobs, not only in the cannabis industry but also building trades, security, and professional services. Reports also found that Virginia could collect up to $308 million in tax revenue by the fifth year of implementation.

According to Megan Field, Policy Advisor to Governor Ralph Northam, assuming next year’s General Assembly passes legislation as it is currently written, here is what people can expect:

–                 Legal sales are supposed to begin January 1, 2024. It will take time to stand up the new state agency, Cannabis Control Authority (CCA), which will own and operate the stores where marijuana is sold.

–                 There are five different license categories: cultivation, retail, processing, wholesale, and labs. There are some exceptions for current pharmaceutical processors and medical marijuana companies.

–                 There is a cap of 400 retail stores and 450 cultivators. Stores will roll out slowly to allow for geographic diversity and to control supply.

–                 The new law does not make any changes to Virginia employment law. Neither employer nor employee rights have changed because of this legislation.

–                 The legislation sets up a system similar to what exists for current alcohol sales in Virginia through ABC stores. Retail sales are allowed unless a locality chooses to opt out. They must do so by December 2022 for localities to prohibit retail stores.

–                 There are strong protections in the legislation around advertising limits, how close retail stores can be to schools, labeling restrictions on what products can look like—they cannot be in the shape of animals or trucks or other things that would be attractive to children.

–                 Forty percent of revenue from marijuana sales taxes will go to early development education for at-risk three- and four-year-olds; 30 percent goes into a cannabis equity reinvestment fund—reinvest in communities that have been historically underinvested, providing scholarships, workforce development, etc.; the remaining 30 percent goes to public health initiatives.

As for how legalized marijuana can impact businesses, Scott Kezman, Director and Assistant General Counsel for Newport News Shipyard summed it up this way: “The 300-page bill didn’t change anything legally between employers and employees. There was another shorter bill (Bill 40.1-27) that was passed this year that talks about medical marijuana and does give some protections to people who are using medical marijuana. That’s the real change in the law in respect to employers and employees. But it doesn’t allow an employee to come to work impaired. The big problem, from an employer’s perspective, if we could test for impairment, that would clear up a lot of things. We can test for impairment with alcohol. But testing with marijuana is difficult because it stays in people’s systems for so long. So, somebody could have used two or three weeks ago, and they still would pop positive on a drug screen. They may not be presently impaired but would still fail a drug test.

“According to the Federal Drug-Free Workplace Act, one of the biggest issues employers have with marijuana is it’s still a federally scheduled substance. That can impact somebody’s ability to get a job or security clearance. We have not changed our current drug-testing posture. We still do pre-employment testing. If marijuana is perceived as legal and the base of people using it expands, employers are going to face a reckoning with pre-employment drug screens. Can I fill my positions with a pool of people who are not using marijuana?”

Shaun Bennett, Associate Attorney at Jackson Lewis PC, agrees that there are just too many unknowns right now that need to be cleaned up, including conflicts between federal and state laws.

“The Moore Act would take marijuana off schedule one, which would help clear a lot of issues for employers,” said Bennett. “But that also depends on the employer and what their guidelines are. For example, if you’re a federal contractor, or you have CDL drivers or other employees covered under the Department of Transportation rules and regulations working for you, they would still need to comply with government guidelines.”

The bottom line is, while people are now permitted to legally use marijuana, there are still complications that can arise from an employer’s perspective. Those that use are urged to talk with their company about policy on use and how it can affect their employment status before they feel they are protected by the new law.

For additional information on Virginia’s plan for legalizing cannabis, visit www.cannabis.virginia.gov.

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