Episode 24: How can Virginia legalize cannabis the right way?

Suddenly, and seemingly out of the blue, legal weed in Virginia seems like it could be a real thing in the not-too-distant future. But legalization won’t be as easy as flipping a light switch. Should past weed convictions be expunged? Should business owners with past marijuana convictions get a leg up?

Virginia (and the nation) have a long history of racially disparate enforcement of marijuana laws... So now we have historical inequities and loads of other questions to deal with as we consider new legislation.

In this episode, Virginia Mercury reporter Ned Oliver and video journalist Alana Yzola take us through ways that Virginia could legalize cannabis in order to benefit Virginians the most.

Episode Transcript

Nathan Moore: This is Bold Dominion, an explainer for state politics in a changing Virginia. I’m Nathan Moore.

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Legal weed! Ah, it seems like just yesterday that people were making jokes about Denver now really being the Mile High City. But in the last few years, ten states have established legal and regulatory frameworks for cannabis sales -- from Maine to Michigan to Alaska.

Shortly before Thanksgiving, Virginia governor Ralph Northam said it’s time to legalize marijuana in Virginia. And leaders in the General Assembly started saying the same thing. Now the governor has established a Virginia Marijuana Legalization Work Group, and that Work Group has already released a report. Suddenly, and seemingly out of the blue, legal weed in Virginia seems like it could be a real thing in the not-too-distant future.

But legalization won’t be as easy as flipping a light switch. Should past weed convictions be expunged? Should business owners with past marijuana convictions get a leg up? Virginia and the nation have a long history of racially disparate enforcement of marijuana laws. So now we have some serious historical inequities to deal with as we consider new legislation.

Alana Yzola: So just a matter of smelling marijuana can lead to a person's death, where on the other side that same plant can be used to make multi-million dollar profits for other companies who statistically tend to be white.

NM: That’s Alana Yzola. She’s a video journalist who’s done work with Business Insider, BBC, National Geographic, and more. Earlier this year, she produced an investigative video piece about the social policy issues around the business of cannabis. We’ll hear more from her later in the show.

We start this episode with Virginia Mercury reporter Ned Oliver. He talked with Bold Dominion producer Aaryan Balu about some of the specifics that are emerging here in Virginia.

Aaryan Balu: So you've got all these challenges that do come with setting up a marijuana market, and they need to do some review. So Virginia's Joint Legislative Audit and Review Commission (the JLARC) has issued a report. What are some of the big challenges that they have looked into?

Ned Oliver: Yeah, you know, I don't know if I would even frame them as challenges, so much. It's just questions about how Virginia wants to proceed, because this isn't exactly rocket science. I mean, we've got 15 states that have either legalized or are in the process of legalizing. So there's plenty of examples. The biggest thing--what would I expect to kind of dominate the debate and discussion--are questions of equity. Because for a long time, we've known that marijuana laws were disproportionately enforced on black Virginians. I believe that the latest figure before decriminalization found that black people were 3.5x more likely than white people to face a possession charge. And that's despite, you know, study after study showing that, you know, white and black people use the drug at basically the same rates.

So, you know, at the forefront of the discussion is just: how can Virginia move forward in a way that doesn't leave those black Virginians behind and where they might actually see benefits from legalization beyond just the end of, you know, prohibition.

AB: Could you talk a little bit more about--what are some of the proposed ways to get that equity?

NO: Yeah, there's kind of two tracks. And one is how to handle past convictions. Basically, what the state can do and what, to me, it looks like we're headed towards is expunging past convictions for possession of marijuana. And that would mean, like, say I had a conviction on my record, it would just be zapped. No one would be able to find a record of it. I think where you're gonna see some debate around that is how far to go because obviously, people were facing other charges beyond merely simple possession. For instance, like low-level dealing.

The second track is how to make sure that, basically, once we open this marketplace, that black Virginians who were impacted--disproportionately, again--by the prohibition are set up to benefit from legalization. That's been a problem in pretty much every other state. And what JLARC found when they were doing this report is other states have tried to address that, but none of them have done a great job. And so the things we're looking at in Virginia are: should black Virginians be given a leg up in terms of, for instance, getting a license to grow and sell and, you know, do pretty much anything in the business arena that now will be legal? It's a little complicated. JLARC has said that, basically, legally, it would be difficult and probably subject to a successful legal challenge if the state was like, specifically saying black Virginians have special preferential treatment. They'd have to basically work around that.

So one of the suggestions was they could target policies like reduce license fees, business startup financing and mentorship to people with past marijuana convictions. They note though, that that could also include, you know, like a wealthy white kid who got caught with weed in college. So they could kind of do a two-prong thing and say: "well, how about someone with a marijuana conviction on their record who is living in a area that had a high rate of convictions historically?" And again, it's not perfect. That could then become a wealthy college grad who's living in a gentrifying neighborhood. So it's not perfect, and it's gonna...I think it's gonna be interesting to see how they work that out.

And then I guess I said, two prongs, maybe there's a third prong. There's going to be a lot of tax revenue. I think that the state is estimating they could generate upwards of $300 million a year, once this is really up and running. We've already heard a push to make sure that that money doesn't just get rolled into the state's general fund and kind of pad the budget and is instead more targeted to, say, a grant program that would benefit education programs in high-risk school districts or, you know, again, districts that saw high rates of marijuana convictions in the past.

AB: Have those kinds of programs worked in other states or in other situations here in Virginia?

NO: There have been issues and other states. I know, just from JLARC's study, they basically found that other states have tried this, and they haven't been entirely successful for a variety of reasons. I think nationwide, the legal marijuana industry is quite dominated by white men.

AB: So actually, speaking of the legal marijuana industry. One of the big comparisons is to the alcohol industry. You know, how does the JLARC study--how does it propose ways to deal with that sort of corporate control that is likely to happen?

NO: Basically, the state will either need to designate an existing agency or create a new one to regulate this. If they were to designate an existing agency, the natural fit would be, you know, ABC, our friendly neighborhood state-run monopoly liquor stores. That does not mean that anyone is suggesting that ABC be involved in any way in the sales. Like don't expect to pick up a bag of weed at the liquor store. The reason that's just off the table from the get-go is because marijuana remains illegal at the federal level. And the state is basically concerned that if they were involved in selling, that would open them--the state specifically--to a legal challenge from the federal government.

The benefit to handing over control to ABC, as JLARC saw it, was that it would basically get things up and running quicker, because you wouldn't be starting a whole new agency from scratch. The downside is that they wouldn't be dedicated and focused on regulating cannabis. And that would make it harder to sort of just have that singular focus that JLARC thought would give them the flexibility to emphasize priorities that we've already talked about, such as the social equity initiatives.

AB: Yeah, the main argument--not the main argument--but one argument that I've sort of seen against the legalization of marijuana is the fear that you're going to get an industry like the tobacco industry. Are there any other precautions that they suggest taking to prevent that sort of corporate control from happening?

NO: The impression that I've gotten is that nobody wants to see a situation where a new cannabis market in Virginia is dominated by large corporations. Say, be it a tobacco company or an out-of-state, you know, vertically-integrated marijuana conglomerate, which have been developing. One of their big suggestions to keep that from happening is preventing vertically-integrated companies from operating in Virginia. So that would basically mean, like, you couldn't get a license to grow and then also distribute and sell.

The plus side of that is it would it would mean, say, a marijuana dispensary would be more open to buying from lots of different producers. The downside is it would mean that prices would probably be a bit higher. Now that said, that's not necessarily a downside from state lawmakers' perspectives, because one of their goals is to reduce risk and use and they found in their studies that higher prices actually would sort of keep it out of the hands of kids. And maybe discourage, you know, extremely heavy use.

AB: Is there is there anything else on this topic that we've missed so far?

NO: I think one other thing that I've been thinking about that's kind of interesting is that Virginia's medical marijuana market is really just now coming online. And it started is you know, four or five years ago under Republican control as like a very narrowly targeted--it was sort of described as a CBD oil program back when CBD products were extremely difficult to get. That's all changed. And I mean, I've I have some I've talked to some people who have gone into the shop in Richmond and if you have the money, it sounds like to me marijuana is basically already illegal. Again, if you have the money, you can go to a website and find a doctor who will do a video consultation with you for $150. Some of them offer deals where if they don't recommend cannabis to you, you get your money back. Once you have this certification, you can walk up to these new pharmacy-dispensary-grow sites. There's four and I think three of them are now open. And, I mean, from what I've heard from people have gotten in you basically can buy whatever you want in whatever quantities you want. So it's kind of already here.

NM:  Ned Oliver is a reporter with the Virginia Mercury. Online at Virginia Mercury dot com. We’re going to take a short break, but stay with us. We’re back in a sec with journalist Alana Yzola for more on how cannabis policies could address equity issues.

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NM: You’re listening to Bold Dominion, a state politics explainer for a changing Virginia. Visit us online at BoldDominion.org. Have a friend who’s trying to figure out Virginia state politics? Tell them about this show. And then subscribe in Spotify, Apple Podcasts, and wherever fine podcasts are served up.

Bold Dominion is a member of the Virginia Audio Collective, online at VirginiaAudio. org. Check out all the podcasts from the collective, including This Week in Virginia History. Sure, Virginia history includes big battles and famous names. But our richer history is made up of smaller events. The disenfranchised. The nonconformists. And just regular people making Virginia history. For two minutes each week, This Week In Virginia History shares those stories at VirginiaAudio.org.

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NM: So the idea of cannabis legalization in Virginia has been loosely bandied around in policy circles in years past, but it was not widely seen as a burning issue. (Well, so to speak.) But now governor Ralph Northam and the General Assembly are both looking pretty hard at what legalization could look like. And to do that, they’re looking at what has worked - and hasn’t worked - in other states.

Alana Yzola is a video journalist who has done work with Business Insider, BBC, National Geographic, and more. Earlier this year, she produced a piece that investigated some of the sociopolitical and racial equity questions around the cannabis industry. She begins by explaining why she pursued this story in the first place.

AY: I think I've always just been super interested in the war on drugs. It was just one of those topics that has always spoken out to me. You know, I'm black. I grew up in a very multiracial community. My father is police officer, so he told me stories about arrests. I had an uncle that was in and out of the system due to drugs. So those kinds of themes have been present in my life. Just kind of understanding, like, what can lead someone to go to jail for something that another group of people are profiting so heavily on? Those themes always stuck out to me.

NM: In the piece you did as you did your research on the cannabis industry in different parts of the country that have made it legal already--how does it work? What are you finding in terms of people who have criminal records for marijuana-related crimes that are now legal?

AY: When California first legalized marijuana, they had Proposition 64, which was allegedly supposed to eradicate/expunge records for those who were previously convicted of marijuana charges. However, while it looks amazing on paper, in practice it was very difficult to do. The courts were backed up. At that time, it was completely manual--you had to, you know, petition to the court, go through gobs of paperwork, pay legal fees to get representation. It was very difficult, especially because the people that were most likely to be persecuted based on marijuana defenses were in communities that were disenfranchised. Were in communities that had faced over-policing had faced like an inequitable access to capital. They didn't have the funds to go about expunging the records.

Later on California made it a little bit more easy. I believe two years ago, 2018, they passed something that allowed it to be automatic. So if you had a marijuana conviction on your record, automatically it was supposed to be expunged. But then if you get into the nitty-gritty if you had a marijuana conviction that was connected with another crime that wasn't eligible to be expunged, then you had to go do the whole process again, petition the court, all that fun stuff that made it difficult to expunge your record.

NM: Well, because that disparity in criminal records also carries through. Unless their record's been expunged, they're prohibited from working in the industry, right?

AY: Yes. I do--I'm not sure about all states, but I do know that in my research in New Jersey, specifically, full legalization isn't in New Jersey. It's medical. So one of the characters that I interviewed for this story, he isn't able to legally have a dispensary because of a previous felony that was attached to marijuana possession. So it's kind of ironic that this man who served his time for a marijuana-related offense can't join the industry legally because of his marijuana-related offense.

NM: I've read a number of analyses around this that kind of conclude that, you know, when you have all this sort of racially disparate impacts of arrests, it kind of gives the impression that states are almost clearing out the black and brown suppliers when it was a black market to make space for for white-owned businesses to operate aboveboard.

AY: Yeah, I mean, the history of the word itself, "marijuana" was rooted in racism. So it was cannabis for a long time. They use the plant historically, way before it was even illegal, for textiles and paper products, those sorts of things. Then there was a mass migration of Mexican migrants that came into the United States. A lot of migrants in Latin America that came in adapted the process of smoking the plant. And because of that, it was a new thing. It was easy to demonize. Legislation had passed to make you have to register with the IRS and be taxed in the 30s, which kind of paved the way to the 50s, the Boggs Act, which was the first act to make drug possession punishable through imprisonment. So these are the types of ways that it was kind of evolved. Even when the Boggs Act kind of like disappeared, it was kind of reintroduced in new ways through the Nixon administration and the Reagan administration. The War on Drugs prevailed. I believe it was one of the aides of...I think it was Nixon. Yeah, it was an advisor to Nixon, who admitted later on that they used the War on Drugs to incriminate the left wingers who were anti-war as well as black people.

NM: You're describing with the Nixon administration and the War on Drugs, and really what's dominated social policy in this arena for the last half century. I mean, how much...how big of an issue is this in 2021? You know, looking ahead, how big of an issue is this going to be? This racially disparate history of cannabis possession and charges?

AY: I think it's going to be a huge issue, especially in terms of over-policing. This year was definitely the year of protests of, you know, over policing, issues within black and brown communities and their relationships with law enforcement. And a lot of times, when you have laws like these non-violent laws that are used as kind of entryways into these negative interactions between officers and members of black and brown communities, those needs to be addressed.

For example, Philando Castile, is a perfect example. For those, I guess, who don't remember, Philando Castile was killed by police in his car. But the reason why he was approached by police was because they smelled marijuana in his vehicle. So just a matter of smelling marijuana can lead to a person's death, where on the other side, that same plant can be used to make multimillion dollar profits for other companies who statistically tend to be white. So it's one of those issues that needs to be addressed going forward. There needs to be legislation involved that as you were legalizing the plant, you need to make sure that there's also legislation that protects people who have been historically and systemically disenfranchised by that same plant. So definitely in 2021, as we move forward, those needs to be at the forefront of any decision going forward.

NM: What kind of legislation have you heard of or might suggest that could be beneficial in that way? To not just say, okay, it's legal now, but to also redress the history of unequal criminal enforcement of it.

AY: For sure, for sure. I know that and other states that have kind of been making waves and a little bit of murmurs of possible legalization, there have been bills that were introduced. I know that there were a few black legislators in New York that had said that they didn't want to vote on any legalization laws until there was proof that the profits that were being made were going back into these disenfranchised communities in some way. I know that in Massachusetts, they had passed equity laws along with it to kind of help people who were disenfranchised, to get the right tools and necessities they need to join into the legal cannabis business.

Clear and concise expungement is 100% a necessity. We need to make sure that expungement is accessible and possible. That means if you have a felony that's directly related to a marijuana-related offense, that you have the capacity to still join the legal industry. I also think it's important to have equity programs where we're reaching out to people who are trying to enter the legal market. There needs to be some sort of percentage. I know that some states have said that the percentage of permits that they're giving out should be representative of that community that had been disenfranchised by marijuana previously. Definitely making sure that black and brown voices and entrepreneurs are at the forefront of every decision since they were the most affected.

NM: You mentioned earlier that in some states, there have been, you know, organizations, companies with lots of capital. Building dispensaries, building distribution centers, building, you know, all the infrastructure for an entire cannabis industry aboveboard before was even fully legal, because they sort of anticipated the state was about to legalize and all the rest. I mean, how much is the cannabis industry already consolidating into a fairly small number of big players?

AY: I think that it's starting, and especially in 2020, where a lot of businesses are struggling. I think it's already starting. You know, marijuana is a very touchy industry to get into because a lot of businesses, when you're just starting out, you get a loan from a bank, using that capital to kind of like jumpstart your business. Because marijuana currently to this day is still illegal on a federal level, banks can't really get involved with that. Right now, banks can't invest in the marijuana industry. So they're dependent on big capital. And very few people have the capital needed to create long-lasting marijuana-related businesses. So the Mom & Pop shops in the legal industry won't really have a chance. So you kind of need that big consolidation, especially now a lot of businesses are closing, they're struggling financially.

So I think that right now, consolidation is already happening. I know that there were some downfalls when the marijuana industry first started, where people were investing huge amounts of money, and capital and resources and property into the industry. But they kind of overshot it, because it's still illegal. So there's this huge gap period that they weren't allowed to--they weren't able to make back the profits they had invested in.

NM: This is not something I necessarily would have thought of, but is the patchwork state-by-state but still federally illegal nature of this whole rollout...is that discouraging smaller shops?

Alana Yzola 

It's all about capital. So when you have a low amount, and there's very few channels for you to invest in your own business--you know, the bank, again, the banks are a major source of a lot of investment in small businesses and if you can't even get to that then you have to reach out to, you know, private hedge funds and all of those sorts of resources to get ahead and to keep yourself on foot. But those hurdles can prevent you from thriving.

For example, you can't even apply for a dispensary license unless you already own commercial property to sell that in. So that means you could have a property for a year or two years and not be able to sell anything out of it legally. So you just have this commercial property that's literally just sitting there--like, you're paying rents on it and you can't even make money on that. That's a deterrent in itself.

Hedge funds tend not to invest in black and brown-run industries, like statistically speaking. So then there's that hurdle. Where are you going to get the capital? And making sure that you have not only the capital to run the business, but hire technical writers to write your application for you. Hire certain lawyers to get--if you want to join and you need something to be expunged, having that legal backing.

So there's all these hurdles that you have to jump through. And because it's federally illegal, there's even more hurdles and laws that you have to overcome in order to get everything going. So it's very difficult for a start-up marijuana company to operate legally.

NM: So here in Virginia--and I think you're my first non-Virginia guest for this podcast, by the way, 'cause it's a Virginia politics explainer--but here in Virginia, they're looking at...the General Assembly and the governor are looking at legalizing next year. And that'll be a phase process by all accounts. But what should a state like Virginia learn from others? What legislation should be in place? If you were going to write a letter to the Assembly and tell them how to do it, what would you say?

AY: I'd say expunge all the records of people who are currently in or out of jail that deal with marijuana related offenses. I'd say reach out to community representatives in these communities to make sure that they're being fully represented. I'd say to create legislation that allows small businesses to thrive, whether it's state-run assistance or reallocating some of the taxes that would result in sale of marijuana back into the communities or some sort of way to help use those taxes to help promote those smaller businesses. And kind of just have a hands-on approach when it comes to making sure that everybody understands the laws in place to create dispensaries and everything like that.

NM: It sounds like having a more active role in managing a new economic sector than perhaps what the state has been accustomed to in the past--

AY: Yes, definitely.

NM: --in order to help that new sector develop into something vibrant and more robust in the future.

AY: It honestly would help all parts of the industry, not just on a social level, but on an economic level. Another reason why the cannabis industry had that lull is because of the pricing. You know, the black market has competitive pricing. So if you allow members of the black market a channel into selling and creating money legally, that helps everyone. It's killing two birds with one stone. Essentially, you're allowing for the legal market to flourish and be taxed, that can go back to the state. You're allowing the people who would normally be arrested for selling and producing a product that's already legal from going to jail. And you're helping to create, hopefully generational wealth and long-term wealth for the state.

So I think the best way to do that is: it starts with complete legalization, complete expungement, and economic empowerment for communities and people who might not have had access to it previously.

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NM: Alana Yzola is a video journalist who has done work with Business Insider, BBC, National Geographic, and more. You can find her work online at AlanaYzola.com. That’s AlanaYzola.com. Thanks to her and also to our first guest, Virginia Mercury reporter Ned Oliver.

My name’s Nathan Moore, and I’m the host of Bold Dominion. Huge thanks as always to our producers Aaryan Balu and Charlie Bruce. Find this show online at BoldDominion.org. Go ahead and subscribe… it’s just a click away.

Hey! We’re always on the lookout for topics for future episodes of Bold Dominion. Send your ideas to our email address -- BoldDominion@virginia.edu. That’s BoldDominion@virginia.edu. Or direct message us on Facebook, Twitter, or Instagram. If you like this episode, please leave us a review on your preferred podcast app, or share this episode with a friend!

Keep social distancing, y’all, and I’ll talk with you in two weeks!