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  • Eli Hunt

Where Does the Revenue From Medical Marijuana Go in Virginia?

Virginians with medical marijuana cards know that they are getting one of the safest products of the highest quality when they pick up their products at Virginia dispensaries. What they may not know is where the money paid into Virginia’s medical marijuana program goes. That is part of an ongoing debate in the Virginia legislature and may change at some point in the future. Here is the current state of affairs and all the details on medical marijuana revenue.

First off, how much revenue does medical marijuana generate in the Commonwealth? Early projections at the start of medical sales estimated that sales would reach about $50 million by 2024 and between $9 and $11 million in the first year. At that point, flower was still not permitted. The sales of this highly valued product would (and did) more volume to sales.

Across the country, legalized sales have proven lucrative for states. Adult-use sales, or ‘recreational’ sales, produced an estimated $3.7 billion in revenues, according to the Marijuana Policy Project. As recreational sales are on hold for a time in Virginia, all revenues will continue to come from medical sales for the time being.

Equity Initiatives

In the original bill that legalized cannabis in Virginia, legislators included statutes that would funnel 30 percent of all revenue from cannabis sales into social equity programs. These programs were focused on providing entrepreneurial opportunities to minority and women-owned businesses. This was seen, in part, as a way to correct some of the injustices that had happened to minority communities during the War on Drugs.

Changes to Legislation

In the 2022 legislative session, some Virginia politicians have made moves to change this revenue structure. Proponents of this new revenue philosophy would rather see this money redirected to Virginia’s General Fund— a fund that includes revenues from things such as corporate income tax, individual income tax and sales tax. These monies are then allocated into Virginia’s general budget to fund initiatives or programs on an as-needed basis.

Many marijuana advocates see this as a huge loss. Social equity was one of the central motivations behind the original legislation, and such programs have proven successful in other states where marijuana is legal. Advocates also believe that such programs are better for Virginians as a whole as they help improve quality of life and the social fabric in the Commonwealth.

Where Revenue Does Not Go

Of course, when you purchase your medical marijuana, there is one thing of which you can be sure— your money is not going into the illegal market. Another central idea in legalizing cannabis is to funnel monies away from criminal enterprises. Legalization allows cannabis users to benefit from the wonders of this natural remedy without inadvertently funding actions or organizations they would never want to support.

Where this whole discussion goes will develop over the next year and into the 2023 legislative session. Until then, medical marijuana users can rest assured that they are supporting a legal and safe program that helps support all Virginians on some level.

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