health district boundaries were used to allocate licenses for Virginia's first five medical marijuana dispensaries in 2018
Source: Virginia Department of Health, Map of Virginia by Health Planning Regions
The Virginia General Assembly started the process towards legalizing the use of marijuana in 1979. The General Assembly blocked prosecution for possession of marijuana, if a doctor had prescribed it to a patient for the treatment of cancer or glaucoma.
Marijuana provided uniquely-effective relief for some patients suffering from the side effects of chemotherapy and other treatments, or pain from some diseases. For glaucoma patients, it lowered eye pressure.
The law did not create a legal process for patients to obtain marijuana for their medical use.
In 1997, Virginia legislators considered repealing the law. In the end the General Assembly retained the protection of cancer and glaucoma patients. The Federal government continued to list marijuana on Schedule I of the Controlled Substances Act; Virginia's law had no impact on Federal restrictions.1
The 1979 law required doctors to write a prescription for use of marijuana. Because doctors can legally "prescribe" only products certified by the Food and Drug Administration, legally they can only "recommend" use of marijuana. A state law that authorized prescriptions would violate the Federal Controlled Substances Act.
That conundrum was solved in 2002. A Federal circuit court ruled that doctor "recommendations" are a form of speech protected by the First Amendment.2
The Virginia General Assembly relaxed the requirement for a prescription in 2015, by authorizing possession based on a doctor's "recommendation." The legislature also prohibited prosecution of patients with intractable epilepsy who possessed cannabidiol, if they could show they had a doctor's certificate for treatment with the oils.
Cannabidiol (CBD) and tetrahydrocannabinol acid (THC-A) oil are chemical compounds extracted from the hemp plant that do not create a psychoactive response or marijuana "high." Numerous health benefits are claimed for using the oils, primarily applied to the skin.
Federal drug officials were opposed to legalizing the oils, because THC-A exposed to heat can convert to tetrahydrocannabinol (THC). The ultimate compound creates an intoxicating effect, creating an equivalent for recreational marijuana.
Similar to the 1979 legislation, the 2015 law technically created an affirmative defense for a narrow group of people who possessed marijuana oils based on a doctor's decision. The 2015 law also provided protection from prosecution for caretakers and parents/legal guardians, since they too could be found in possession.
The 1979 or the 2015 laws did not legalize possession of other marijuana products besides cannabidiol (CBD) oil and tetrahydrocannabinol acid (THC-A) oil. Possession of buds from flowers, or other parts of marijuana plants, remained illegal. No Virginia law has ever allowed for any recreational use of tetrahydrocannabinol (THC).
Virginia Tech research supported growth of industrial hemp, but not marijuana used for psychoactive impacts
Source: Virginia Tech, Facts About Industrial Hemps
Most significantly, the laws provided no legal mechanism for patients to acquire any form of marijuana for medical purposes. No one within Virginia was authorized to grow marijuana for medical use, and no one was authorized to import it from outside the state.
Patients were expected to acquire marijuana through means that were still illegal. The "affirmative defense" meant that selected people could not be prosecuted for breaking the law prohibiting possession, if a doctor had certified the cannabidiol was being used for treatment of glaucoma, cancer, or epilepsy. Nonetheless, possession was still technically illegal under state law.
Federal law enforcement agents were not constrained by the state law blocking prosecution. Federal officials focused on large-scale syndicates transporting drugs rather than punishment of individual users, and Federal rules began to shift in 2014.
In that year, the Federal government authorized researchers to grow "industrial hemp," which required that the tetrahydrocannabinol concentration could not exceed 0.3 percent. Four years later, the law was altered so states could license all farmers to grow industrial hemp. The possession of marijuana plant material exceeding 0.3 percent remained illegal under Federal law.3
In 2016, the General Assembly began to broaden the number of people who would be protected from state prosecution. The legislature authorized the Virginia Board of Pharmacy to prepare to license pharmaceutical processors who could grow marijuana for medical purposes, with tetrahydrocannabinol concentrations that exceeded the 0.3 percent limit for industrial hemp.
In 2018, the legislature broadened its authorization to use medical marijuana for any condition, not just cancer, glaucoma, or epilepsy. Legislators noted that medical marijuana would be a better alternative than opiates. Recreational use of any form of marijuana was not authorized by the 2018 Virginia law.
marijuana oil producers quickly advertised legalization in Virginia
The legal version had to contain at least 15% tetrahydrocannabinol acid (THC-A), but not more than 5% of the tetrahydrocannabinol (THC) that produces euphoria. Marijuana sold for recreational use has around 30% THC.4
The 2018 law finally established workable procedures for distribution of medical marijuana. Patients were required to get a physician's recommendation, then register with the Virginia Board of Pharmacy. Physicians had to be registered as well.
Patients who did not register and get a recommendation from a registered physician could no longer claim the affirmative defense that was established under the 1979 and 2015 laws. Registration fees were set at $50/year.5
at the end of 2018, there were 214 physicians registered for "recommending" CBD/THC-A oils
Source: Virginia Department of Health Professions, License Lookup
The law also authorized the Board of Pharmacy to license pharmaceutical processors who could:6
cultivating medical marijuana became legal in Virginia in 2018
The state invited companies to bid for the right to produce medical marijuana products and operate dispensaries. The Request for Applications included criteria for awarding up to 275 points when evaluating applications. The most significant ranking factor, the only one worth up to 50 points, was "Agriculture, Production, and Dispensing Expertise."
The Board of Pharmacy promised to issue one permit in each of the state's five heath regions. Competition was intense from companies both within and outside of Virginia. In the end, 32 companies submitted a total of 51 applications. Hampton Roads generated the greatest interest; there were 15 applications for the one permit to be issued for that region. One proposal identified that the horticultural part of its operation would be based on growing 5,000 marijuana plants adjacent to NASA Langley Research Center.
They paid $10,000 per application, and hoped they would become one of the five companies awarded permits. The initial fee of $60,000/year for each of the five pharmaceutical processor permittees was a minor part of their business plans. One applicant predicted it would spend $10-$20 million to start up the business. The medical marijuana market alone might not justify such expenses, but businesses anticipated that getting in on the ground floor would position them for greater profits once recreational use was legalized.7
The state required that the five pharmaceutical processors must grow, process, and sell the CBD at one location. No other state had such a requirement for complete vertical integration mandating that the companies with licenses had to find or construct production/processing/sales buildings. In a state with eight million residents, there would be only five sales outlets.
Makers of cigarettes/cigars/pipe tobacco products and liquor distilleries are allowed to grow, process, and retail at separate locations. Wineries which make direct sales to customers at tasting rooms receive some benefits if they grow their grapes in Virginia, but no agricultural businesses faced more restrictions than medical marijuana processors.
The Virginia Board of Pharmacy mandated implementation of electronic radio-frequency identification (RFID) seed-to-sale systems that could track the cannabis from either the seed or immature plant stage until the cannabidiol oil and THC-A oil was sold to a customer, and even prohibited production facility employees from wearing clothing with a pocket.
Initial regulations also prohibited advertising other than listing basic information on a website about a processor's location, hours of operation, and laboratory results. No window shopping was allowed; only employees, laboratory personnel, and registered patients (or parents/legal guardians) were allowed on the premises of a processor.
A pharmacist-in-charge (PIC) always had to be present. That person had ultimate responsibility for distribution, reflecting Virginia's perspective that medical marijuana was dispensed as a drug:8
Ten companies competed for the permit in the Third Health District, which stretches from Lynchburg and Danville west to Cumberland Gap. Dharma Pharmaceuticals won the permit, and based its operations in the vacant JC Penny's store at the old Bristol Mall. One of the investors in the pharmaceutical company owned the mall. It had been an economic success when it opened in 1975, but all the retail stores had closed in 2017.
Local officials were optimistic that Dharma Pharmaceuticals would create up to 150 well-paying jobs. Growing and processing marijuana was predicted to require high skills, including pharmacists, horticulturists, and legal specialists.
The mall was also being proposed for a gambling casino and family resort, anticipating the General Assembly might loosen Virginia's regulations on gambling in order to spur economic development.
Early plans for the casino projected it would need only 100,000 square feet of the 544,000 square feet at the old mall. However, state regulations required that the area for growing, processing, and selling marijuana products must be 1,000 feet away from the proposed day care facility for workers at the resort's anticipated hotel.
Dharma Pharmaceuticals would need less space than the resort/casino, and made clear that it would consider other locations than the mall if state officials would approve a location change. The city manager for Bristol, Virginia made clear his preference, assuming the casino was authorized:9
Bristol was clearly not in the center of the region. It is a two-hour drive down I-81 from Roanoke, and an extra hour distant from Lynchburg. A facility located in the Radford area would have been easier to access for more of the predicted 100,000 customers.
Dharma Pharmaceuticals may have won the permit purely on the basis of its application, but it may also have benefitted from recognition that Bristol was struggling financially and that opioid overuse was particularly common in Southwestern Virginia.
the medical marijuana license for the Third Health District was awarded to a company based at Bristol Mall, on the edge of the district's boundaries
Source: Virginia Department of Health, Map of Virginia by Health Planning Regions
Other licenses were awarded to companies planning to base operations in Manassas, Staunton, Richmond, and Hampton Roads. The Richmond permittee, Green Leaf Medical planned to spend $16 million to develop its site in Manchester south of the James River. The company claimed the retail outlet was:10
Two of the five companies awarded licenses quickly asked for approval to alter the locations they had proposed. The Board of Pharmacy rejected the request for the Northern Virginia company, Dalitso, to start operations sooner by using an existing building in Gainesville rather than constructing a new building in Manassas.
The company, which branded its operation as Beyond/Hello, ended up constructing a new building. It was in an area zone for industrial use, between the Norfolk Southern Railroad tracks and a Prince Wlliam County waste transfer/composting facility, but close to I-66.
Dalitso cleared trees and built a new facility west of Manassas, near I-66
Source: US Geological Survey (USGS), Gainesville VA 1:24,000 topographic quadrangle (2019)
The request to relocate the Bristol location to another location, away from the mall, was deferred to a future meeting and then denied. The bidding for the five licenses had included review of specific locations for growing, processing, and selling medical marijuana. The Board of Pharmacy was unwilling to allow the Bristol licensee to change that fundamental component of its bid after winning the contest, even if the result would be construction of a medical cannabis dispensary next to a gambling and entertainment venue.
A local member of the House of Delegates complained that the 4-3 vote for denial reflected geographic ignorance:11
Dharma Pharmaceuticals then proposed, as its second alternative, moving from its original proposed location to a parcel that was adjacent to the mall. It ended up opening in the location proposed in its bid, which was the old JC Penney store at the mall. In the production area, one room was designated as the nursery for the initial growth of plants. Plants were moved to flowering rooms where lights facilitated growth. Another room housed large plants in the "mother phase," before harvest and transfer to a drying room, extraction room, and packaging room. A quarantine room stored product until testing showed it was ready to be sold in the dispensary.
In June 2020, it was clear that the casino is Bristol would be approved by the voters in November. Dharma Pharmaceuticals was notified that its lease for the old JC Penny store would be terminated. The company made plans to move from the Bristol Mall to Abingdon. It acquired a manufacturing facility and got approval from Washington County officials to operate a sales outlet close to I-81 at Abingdon, before applying again to the Board of Pharmacy.12
Dharma Pharmaceuticals planned a move to Abingdon in 2020, since its lease at Bristol Mall was terminated to make space for casino development there
Source: ESRI, ArcGIS Online
While the state was approving five pharmaceutical processors, CBD-infused products were being sold without clear legal authority in health food store, gas stations, and other retailers. After the US Congress passed the 2014 Farm Bill which support for hemp production, various retailers began to sell hemp-derived CBD products.
Federal and state agencies did not regulate the CBD-infused products, except for Food and Drud Administration approval of Epidiolex for two rare forms of epilepsy. The legality of other CBD-related material was not clear. Consumer safety was not assured, since the Food and Drug Administration was not researching and then approving items for sale.
In 2018, the Powhatan County Sheriff purchased CBD-infused products from retail outlets and had them laboratory tested. One purchased item was pure marijuana, far exceeding the 0.3% threshold of tetrahydrocannabinol defined for creating an intoxicating high. Other items contained synthetic cannabinoids that created the effects desired by Spice users. There were no independent assurances of quality or safety for purchasers of CBD-infused products, so the "buyer beware" philosophy was appropriate.
State police lacked the ability to distinguish CBD-based products from illegal marijuana. In 2019, a state police officer ticketed a man for possession of marijuana. He contested the citation, claiming the hemp flower he had in his possesion was purchased legally at a store in Charlottesville selling CBD products. The store submitted a test showing its products had a THC level of .28 percent, below the 0.3 percent threshold that would have made the hemp flower illegal.
A District Court judge ruled that the citation was valid, but upon appeal to Circuit Court the second judge voided the conviction. The State Police on patrol have the ability to recognize marijuana by appearance and odor, but now need a field test that can determine if marijuana products exceed the 0.3 percent threshold.13
The 2019 General Assembly passed three laws to clarify the rights to use cannabidiol (CBD) and THC-A oil. Physician assistants and licensed nurse practitioners were authorized to write a "certification" for patients, patients could designate a registered agents to pick up the products, and students with proper documentation could use CBD and THC-A oil at school. One goal of the increased access was to reduce the use of prescribed opiates.14
The 2019 legislature expanded the right to sell marijuana in edibles and packaged in most every form, from suppositories to lollipops. The legislators declined to described what they had authorized as a "medical marijuana program" and called it a "low-THC oil program." The General Assembly did maintain the ban on the sale of marijuana flowers, thus blocking the opportunity to smoke/vape marijuana legally even with a doctor's recommendation.15
marijuana-infused lollipops, such as those sold in Amsterdam smoke shops, were legalized by the 2019 Virginia General Assembly
Source: Amsterdam Party Guide, Do Weed Lollipops Get You High?
Authorizing sale of medical marijuana could impact sales of alcohol; one study found a 15% reduction. The impact of recreational marijuana could be greater, after it was decriminalized in Virginia by the 2020 General Assembly. The legislature replaced the felony for possession of up to an ounce of the plant with just a $25 civil fine.16
The 2020 General Assembly further increased access to medical marijuana. Pharmacists were no longer required to be on-site for cultivation of plants, and the five authorized processors were allowed to establish five additional off-site cannabis dispensing facilities within the same health service area where they were licensed. With the creation of more outlets, Virginia customers gained 25 more retail opportunities and were no longer obliged to get to the processing facility to purchase cannabis oil, the new term for what had previously been called cannabidiol oil or THC-A.17
After PharmaCann was awarded the license for Health District 1, with plans to construct a facility in Statunton, it announced plans to merge with MedMen. The plans were terminated in later 2019, and MedMen ended up with the license. However, the company failed to start construction on the new building for growing, processing, and selling medical marijuana.
The Virginia Board of Pharmacy refused to grant an extension to MedMen in 2020. The state agency cancelled the license and issued a new Request For Applications. That meant the facility could be constructed anywhere within Health District 1, and could end up being located as much as 100 miles east of Staunton.18
the Health District 1 permit for a cannabidoil processing facility in Staunton was cancelled in 2020, re-opening the possibility of a facilty anywhere within the district (red)
Source: Virginia Department of Health, Health Districts and Health Service Areas, Commonwealth of Virginia
between 2003 - 2014, marijuana possession arrests increased 76% in Virginia while decreasing overall at the national level
Source: Drug Policy Alliance, Racial Disparities in Marijuana Arrests in Virginia (2003-2013) (Figure 1, p.3)