How to Get a Virginia Marijuana Wholesaler License

How to Get a Virginia Marijuana Wholesaler License

Virginia marijuana wholesaler license.

How to get a Virginia marijuana wholesaler license? The wholesaler licenses are one of the more interesting types of licenses.  And in Virginia there’s only 25 of them. So you should be prepared.

Recently -on April 7, 2021- HB 2312 and SB 1406 were voted to be approved after Gov. Ralph Northam requested amendments from the legislature. 

This bill will replace cannabis prohibition with a system to legalize, tax, and regulate cannabis for adults 21 and older. 

Many — but not all — of the law’s provisions require a second legislative vote in 2022, or “re-enactment.”

The provisions to legalize cannabis possession and cultivation on July 1, 2021 do not require re-enactment, nor do penalties for minors possessing cannabis and provisions to allow the regulatory work to start.

The provisions to begin the regulatory structure and to legalize sales on January 1, 2024 also do not require re-enactment. Most new penalties — such as for bringing any cannabis into Virginia — do require re-enactment.

What is a Virginia Marijuana Wholesaler license?

A marijuana wholesaler license is a legal document that Authorizes the licensee to:

  1. Purchase or take possession of retail marijuana, retail marijuana products, immature marijuana plants, and marijuana seeds from a marijuana cultivation facility, a marijuana manufacturing facility, or another marijuana wholesaler and
  2. Transfer possession and sell or resell retail marijuana, retail marijuana products, immature marijuana plants, and marijuana seeds to a marijuana manufacturing facility, retail marijuana store, or another marijuana wholesaler.

The wholesaler appears as a middlemen among various categories of licenses.

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How to Apply for a Virginia Marijuana Wholesaler License

The legislative approval the Senate Bill 1406 and House Bill 2312 made Virginia the first southern state to legalize the possession and use of marijuana by adults.

Although beginning July 1, 2021 adults will be able to possess up to one ounce of marijuana and to cultivate up to four cannabis plants per household, the Virginia Cannabis Control Authority will not adopt regulations regarding licensing prior to July 1, 2022, while the licensing process will not be available until July 1, 2024.

In this sense, the information regarding the licensing process contained in SB 1406 and HB 2312 are pretty limited and applicable to all license types.

According to HB 2312 the licensing process starts with filing an application in a form provided by the cannabis authority and a statement in writing by the applicant swearing and affirming that all of the information contained in the application is true.

Take into account that if you are applying for an establishment license that requires an inspection by the Department of Agriculture and Consumer Services, you will need to provide proof of inspection or proof of a pending request for an inspection. You can get a license but you will not be able to sell marijuana products until an inspection is completed.

Application Notices

Every applicant will also need to post a notice of his application on the front door of the building, place, or room proposed to engage in such business:

  • The notice will be there for no more than 30 days and not less than 10 days.
  • The size and information will be determined by the adult-use marijuana licensing authority
  • Any objections have to be submitted to the licensing authority not more than 30 days following initial posting of the notice

The applicant will have to publish a notice at least once a week for two weeks in a newspaper published in or having a general circulation in the county, city, or town where the business will be located.

  • The information contained in the notice will be determined by the adult-use marijuana licensing authority.
  • Any objections have to be submitted to the licensing authority not later than 30 days from the date of the initial newspaper publication

Background Check

The adult-use marijuana licensing authority must conduct a background check of each applicant for a license, which includes a criminal history records search, including a fingerprint-based national criminal history records search:

  • The board may waive the requirement for a background check if a good cause is shown.
  • An applicant cannot be disqualified because of a past conviction for a marijuana-related offense.
  • The marijuana licensing authority has to notify the local governing body of each license application, and the local governing bodies must submit objections to the granting of a license within 30 days of the filing of the application

Application Fee

The information regarding the application fees is not available at the moment, the marijuana licensing authority is in charge of establishing the fees. However, HB 2312 provides the following information regarding the licensing fees:

  • They require to be paid at the same time the application is filed (except that such fee is waived or discounted for qualified social equity applicants).
  • The fee shall be in addition to the actual cost charged to the Department of State Police by the FBI or the Central Criminal Records Exchange for processing any fingerprints for each background check
  • The fee shall be in addition to the state license fee and will not be refunded.

The Board has the authority to increase state license fees. The Board shall set the amount of such increases on the basis of the consumer price index and shall not increase fees more than once every three years. Prior to implementing any state license fee increase, the Board shall provide notice to all licensees and the general public of (i) the Board’s intent to impose a fee increase and (ii) the new fee that would be required for any license affected by the Board’s proposed fee increases. Such notice shall be provided on or before November 1 in any year in which the Board has decided to increase state license fees, and such increases shall become effective July 1 of the following year.

Recordkeeping

Every licensee must file and maintain with the marijuana licensing authority a current, accurate record of the information required for the licensing and notify the licensing authority of any changes to such information in accordance with the regulations

Every application for a license has to be made on a form provided by the licensing authority.

State regulation 

A new Cannabis Control Authority would be created in July 2021 to regulate the adult-use cannabis market. A Board of Directors would issue regulations; grant, suspend, or revoke licenses. 

License Caps

The marijuana licensing authority must establish the number of licensees, the licenses cannot exceed the following numbers:

  • Retailers: 400 licenses
  • Wholesalers: 25 licenses
  • Cultivators: 450 licenses
  • Product Manufacturers: 60 licenses

These numbers do not take into consideration existing medical cannabis businesses and hemp processors.

The licensing authority will also establish criteria to evaluate new licensees based on the density of retail stores in the community and to consider any negative public health outcomes in the community.

Vertical integration (owning multiple types of cannabis businesses) would not be allowed except in the case of: 

  • Microbusinesses 
  • Existing medical cannabis businesses, all of which are vertically integrated, and hemp processors may be vertically integrated if they: 1) pay a $1 million fee to the Virginia Cannabis Equity Loan Fund and the Virginia Cannabis Equity Reinvestment Fund; and 2) the business submits a diversity, equity, and inclusion plan to the Cannabis Business Equity and Diversity Support Team and implements it or provides job training services to persons recently incarcerated. 

Stores in the state must be geographically dispersed. Their dispersion must be reassessed after every 100 licenses are issued.

Social Equity Applicants

The bill promotes inclusion by prioritizing social equity applicants. The bill defines “social equity applicants” as those having 66% or more owners who:

  • Have a prior cannabis conviction
  • Have a close relative with a cannabis conviction
  • Live either in an area with disproportionate cannabis arrests or that is economically distressed
  • Are graduated from a Virginia HBCU

Social equity applicants will be given preference from July 1, 2023 until January 1, 2024. Regulators will also waive a percent of the application fees.

Additional Regulations Established in the Bill

Furthermore, the bill creates a Cannabis Business Equity and Diversity Support Team to identify barriers to inclusion, offer technical assistance, conduct outreach, and develop requirements for diversity, equity, and inclusion plans.

A new 21-member Cannabis Public Health Advisory Council would assess and monitor public health impacts and make recommendations, including about warnings regarding cannabis products’ safety and product composition and public health awareness.

The bill includes requirements for seed-to-sale tracking, packaging and labeling, and requires state-created information on risks to be available at the point-of-sale.

Rules would governs outdoor cultivation, sanitation, testing, and advertising.

Finally, regulators would also establish public health and safety guidelines for personal home cultivation, including to protect children and prevent nuisances, including odor. 

Timeframe of the Bill

  • Most of the bill — including legal possession — will take effect on July 1, 2021. (The current penalty for possession of up to an ounce is a civil fine of up to $25.) 
  • Sales would begin no earlier than January 1, 2024. 

Taxes established on the bill

  • Fees would be determined by the Board and can be increased based on ination. 
  • After covering regulatory costs, the revenue would be allocated to: pre-K education for at-risk children (40%); a Cannabis Equity Reinvestment Fund (30%); substance abuse treatment and prevention (25%); and public health programs (5%). 
  • The Cannabis Equity Reinvestment Fund, administered by a 20-member Cannabis Equity Reinvestment Board, would direct funds to: 

Scholarship programs for historically marginalized populations, including those who were in foster care and who have been impacted by substance use; 

  • Grants to support jobs training and placement, workplace development, youth mentoring, and reentry services; 
  • Contributing to the state’s Indigent Defense Fund; and 
  • No -and low- interest loans for social equity applicants.

If you want more information regarding what could you do in order to enter the cannabis industry in Virginia, don’t hesitate to contact us.

If you want to be updated on the current state of Cannabis legalization, you should check out our map of marijuana legality by state.

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tom

tom

Licensed to practice since 2008, Thomas Howard has represented numerous financial institutions in litigation to enforce their security interests.
tom

tom

Licensed to practice since 2008, Thomas Howard has represented numerous financial institutions in litigation to enforce their security interests.

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