Why So High? More Than Half the Cost to Legalize Weed in VA Goes to Police, Report Says.

Why does more than half of the new plan’s cost go towards law enforcement? It’s one of several questions raised by the state’s report.

RICHMOND-It would take an estimated $8.9 million to legalize marijuana in Virginia, according to a new report. That includes setting up a new agency, establishing the rules and setting up dispensaries. More than half of that money, $4.88 million to be exact, would go towards law enforcement.

The report, released Nov. 30 by Gov. Northam’s Marijuana Legalization Work Group, says one goal is to explore how the Commonwealth can ‘undo the harm of criminalization’ when it comes to marijuana. It’s unclear how that would happen with five times more money going to policing, rather than social equity programs. 

If Virginia does legalize cannabis next year, it will become the first state in the South to do so. 

15 states have legalized adult recreational cannabis use since Colorado and Washington legalized it in 2012.

Earlier this year, Virginia became the 27th state in the nation to decriminalize cannabis possession. Decriminalization does not mean that possession of the drug is legal. Instead, it simply no longer carries a criminal penalty. In Virginia, possession of less than an ounce of cannabis is a civil penalty and carries a $25 fine. 

Legalization, unlike decriminalization, removes both criminal and civil penalties for the possession of cannabis. When you legalize cannabis, you also get regulations. You get a system handling distribution.

However, legalization comes with limitations. Each state sets its own regulations for how it can be sold, consumed, and grown. These rules can vary wildly depending on which state you’re in. 

The Cost and Benefits of Legalization

According to the report, legalization presents a significant financial opportunity for Virginia. 

A legal adult-use marijuana industry could be worth between $698 million to $1.2 billion annually, according to the report. Legalization could also generate between $140.1 million and $274 million in tax revenues per year at industry maturation. 

If Virginia legalizes cannabis, it will need a new agency to oversee the industry. One option they considered was to house this agency in the Virginia Alcoholic Beverage Control (ABC) Authority. When projecting the cost of establishing such an agency, the work group made the assumption that ABC would oversee it. 

Based on that assumption, the report estimated that creating a regulatory structure for the marijuana industry would cost $8.961 million. 

The report suggested allocating $4.081 million to handle administrative and support services. That sets aside $1.365 million to hire a staff and $1.125 million for licensing services. The report suggested spending $632,000 on legal counsel costs.

Social Equity programming that the study claims will ‘undo harm caused by criminalization’ only received $959,000. 

This figure does not include the potential costs of grants and other financial aid to communities impacted by criminalization. However, the report does not actually recommend creating grant or loan programs for these communities or allocate funding for such. It only states that the Commonwealth ‘could’ institute such a program. 

“The last 20 years we’ve tripled down on the arrest of marijuana here in Virginia while the rest of the nation was legalizing. We have a real intentionality that we have to do, first steps to legalizing, and this report does not go far enough,” said Marijuana Justice founder Chelsea Higgs Wise. 

Where Does The Money Go?

Meanwhile, the majority of money that the report suggests allocating the marijuana legalization, $4.880 million, went to support the Virginia Bureau of Law Enforcement. To put that in perspective, Virginia would spend five times as much on law enforcement as social equity under this plan.

Out of that $4.880 million, $4 million would go towards hiring 40 people. That includes 20 sworn and 20 non-sworn field staff members. It’s not just for salaries. The report also proposed spending $100,000 to select, train, and outfit each person they hire to regulate the cannabis industry. 

The study allocated the remainder of the money it recommends spending on law enforcement to fund tax management, compliance audits, and seed-to-sale tracking software. 

The report recommends setting taxes on cannabis ‘high enough to cover the costs of implementing the state program.’

Therefore, almost $5 million dollars of revenue generated from legalization would support law enforcement agencies. 

“We’re about to make the biggest reinvestment back into law enforcement. To make sure our youth are criminalized, to make sure our folks in public housing are criminalized, to make sure our folks without shelter are criminalized,” Wise said. 

Secretary of Public Safety and Homeland Security Brian Moran did not respond to requests for an interview.

RELATED: Virginia’s Approach to Marijuana Needs to Change, Analysts Say

Failing to ‘Undo Harm’

The report states that ‘designating funds from marijuana tax revenue to reinvest in communities would be a critical component to social equity.’ 

In order to achieve this goal, it recommends two potential investment strategies to lawmakers. 

Instead of direct aid, the report first recommends a community investment model. Under this model, communities can apply for funding to meet their specific, community-driven needs including health care, education, and housing. Activists say the vague wording of this strategy means money might not reach the organizations actually providing aid to disproportionately impacted communities.

“Many states across the country are allowing the municipalities to get the revenue rather than the people who are actually enacting the social equity programs. and those municipalities do not know what to do with those monies and they again never actually reach the people. And so this is again how people are being left out of the market,” Wise said. 

The report also recommended directing funding intended to undo harm through programs for people in the criminal justice system. It also suggested using this funding for behavioral health programs that treat substance use disorder. According to Wise, this investment strategy reinforces the Commonwealth’s War on Drugs by supporting the stigma that cannabis is dangerous. 

“I am highly offended,” said Wise. “They’re now making it a public health issue. That’s their narrative. Versus a direct reinvestment so that we can provide our own public health, our own safety, with our own autonomy because we would have our own capital.” 

Social Licenses and Density Caps

But what about those communities? Does the report lay out any other solutions to help them? The answer is yes, to a point.

One involves social equity licenses. In other states that legalized cannabis, governments created special licenses for people disproportionately impacted by criminalization. In Illinois, which the report recommends modeling, recipients of these licenses receive technical assistance and support, pay reduced license and application fees, and can apply for low-interest loans from the government. 

Another strategy the report recommends is placing density caps on low in-come areas. These caps would limit the number of dispensaries that can operate in a specific area.

However, Daniele Piomelli says a concentration of dispensaries in low-income neighborhoods could actually benefit the communities. She serves as co-chair of the University of California Irvine Center for the Study on Cannabis.

“If you’re in need of it and it’s for medicinal purposes, it’s just like going to the pharmacy and getting Advil. You need to do that,” said Piomelli. “There is good money in cannabis, so it could be good also for a neighborhood to have something like that.”

Areas densely populated with cannabis dispensaries increase that neighborhood’s access to the medication. Despite stigmas to the contrary, dispensaries also do not lead to increases in crime rates. According to a study by the Institute of Labor Economics, dispensaries reduce property crime rates.

They also actually substantially stimulate the local commercial economy, according to a study by the National Association of Realtors. Most residential property values are not significantly impacted due to their proximity to dispensaries.

But beyond the economics, if Virginia officials truly want to “undo the harm”, there’s another area to focus on. What happens to anyone either in prison or with a marijuana conviction on their record? We take a look at that tomorrow.