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HomeMy WebLinkAboutI. A. CANNABIS ADVISORY TASK FORCE UPDATE 5.21.24Cannabis Advisory Task Force Briefing May 21, 2024 1 Definitions •Adult Use (AU) – Also known as Recreational Use. The use of cannabis in a non-medicinal manner. AU sales is currently illegal in Virginia •Cannabinoids - Cannabinoids are naturally occurring compounds found in the Cannabis Sativa plant. Of over 450 different compounds present in the plant, only 66 are termed cannabinoids. The most well known among these compounds is the delta -9-tetrahydrocannabinol ( Delta-9 THC), which is the main psychoactive ingredient in cannabis. Cannabidiol (CBD) is another important compound. •Cannabis Control Authority (CCA) – A state authority authorized to provide oversight of Medical and AU cannabis programs in Virginia •CBD – One of over 100 cannabinoids in hemp and cannabis. CBD is not intoxicating and legal for sale in Virginia •Delta-9 THC (Cannabis) – The intoxicating cannabinoid in hemp and cannabis. Delta-9 THC is legal for medical use only in Virginia •Delta-8 THC and Delta-10 THC (Intoxicating Hemp) – through a relatively simple chemical process, CBD can be used to make Delta-8 and Delta 10- THC, which is intoxicating and illegal in Virginia •Dispensary – A retail establishment licensed by the Commonwealth to sell medical cannabis. Oversight provided by the CCA •Kratom – Is a tropical tree native to Southeast Asia. Consumption of its leaves produces both stimulant effects (in low dosages) and sedative effects (in high doses), and can lead to psychotic symptoms, and psychological and physiological dependence •Medical Use (MU) – Use for treating medical conditions. Requires a practitioner’s review and approval, registration by individuals with the Commonwealth. May only buy cannabis at licensed medical dispensaries. •Patients – There were approximately 98,000 medical cannabis patients in Virginia as of late 2023 •Qualifying Conditions – Unlike some other MU states Virginia does not have a set list of qualifying conditions. Qualifying for a MU is left up to physicians to determine. Referred to in legislation as “Let Doctors Decide” 2 Cannabis Advisory Task Force (CATF) Background •Established October 2022 by City Council Resolution •Eighteen members include City Departments, Citizens of Virginia Beach, Commercial Real Estate, Healthcare, Cannabis Industry Representatives, Resort Interests and Councilman Berlucchi •The mission of the Cannabis Advisory Task Force is to serve as a balanced advisory group to City Council regarding cannabis consumption, sale, manufacturing, and cultivation, with respect to public safety, zoning, community, business, and educational concerns. •First year spent standing up Task Force, governance and education of committee members 3 Virginia Cannabis Market and Taxation •According to JLARC (Joint Legislative Audit and Review Commission) June 7, 2021 report: •First year Adult Use (AU) cannabis sales projected between $120 and $206 million •First year tax revenues projected between $37 million and $62 million •Year five cannabis sales projected between $613 million and $1.025 billion •Year five tax revenues projected between $184 million and $308 million •In 2022 Virginia collected $379 million in ABC related taxes •Industry would create between 11,000 and 18,000 jobs •Current Illegal market estimated to be over $1 Billion annually 4 Virginia Oversight and Regulatory Regime •Cannabis Control Act Approved April 7, 2021, effective July 1, 2021 •Legalized Medical Marijuana, Home Grow, possession of less than an ounce •Created Cannabis Control Authority (CCA), which began formal oversight of Medical program on January 1, 2024 and will have oversight of the Adult Use market if/when enacted. •Adult Use (Recreational) required re-enactment, which did not happen •On March 28, 2024 Governor Youngkin vetoed proposed legislation that would have created an Adult Use market in mid-2025 •Surveys show 62% of Virginians are in favor of Adult Use legalization •Earliest timeframe for Adult Use now mid-2026 5 Cannabis Control Act April 7, 2021 Provisions •Licensing at state level •Localities can determine hours and implement zoning and land use rules •Localities can opt out of retail stores by voter referendum •State tax of 21% at retail sale, in addition to standard 6% sales tax. Does not apply to medical dispensary sales. •Localities can impose up to 3% tax on sales to consumers in the municipality •After recovering regulatory costs, state 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%) •Note: Tax rates and other provisions of the CCA could change with subsequent legislation 6 Cannabis Control Authority (CCA) April 7, 2021 Provisions •Charged with: •Establishing the number of and criteria for licenses for Adult Use (AU) retailers (400), wholesalers (25), cultivators (450) and product manufacturers (60). Does not include medical businesses and hemp processors. Also approves testing labs. •Oversight of seed-to-sale tracking, packaging, and labeling – including potency and mandating warning labels. •Rules governing outdoor cultivation, sanitation, testing and advertising •Establish public health and safety guidelines for personal home cultivation, including to protect children and prevent nuisances, including odor. •Oversight and enforcement of market participants •Note: Tax rates and other provisions of the CCA could change with subsequent legislation 7 2023 Crime Statistics Overview 8 *Data is dynamic and subject to change *Compiled by VBPD Analytical Services Unit *Total 2023 homicides - 8 Statistics Overview: Historical Comparison *Data is dynamic and subject to change.Compiled by: VBPD Analytical Services Unit 2020 2021 2022 2023 3 Year Avg 2023 Compared to 3 Year Avg Involving Marijuana 593 284 410 185 429.0 -56.9% Involving Marijuana and Juvenile Arrestee 82 53 159 60 98.0 -38.8% Arrest Charges 2020 2021 2022 2023 3 Year Avg 2023 Compared to 3 Year Avg Total Homicides 17 15 23 24 18.3 30.9% Involving Marijuana 1 1 7 3 3.0 0% Involving Juvenile Offenders / Arrestees / Victims 4 2 5 2 3.7 -45.5% Involving Marijuana and Juveniles 1 0 2 1 1.0 0% Homicides 2020 2021 2022 2023 3 Year Avg 2023 Compared to 3 Year Avg Total Violent Crime 567 582 515 533 554.7 -3.9% Involving Juvenile Offenders / Arrestees / Victims 83 77 54 150 71.3 110.3% Violent Crime Offenses 2023 Marijuana Related Homicides •January 2023 - Suspects involved in a marijuana drug deal conspired to rob the dealer of the marijuana. During the incident the dealer was shot and died from his injuries. •January 2023 – Subjects from Hampton agreed to meet in Virginia Beach to conduct a marijuana transaction. During the transaction, an argument over money occurred, resulting in the dealer being shot and he died from his injuries. •March 2023 - Suspects involved in a marijuana drug deal conspired to rob the dealer of the marijuana. During the incident the dealer was shot and died from his injuries. 10 Intoxicating Hemp vs Cannabis •Cannabis – intoxicating compound (cannabinoid) is Delta-9 THC (medically legal in Virginia) •CBD – Non-intoxicating cannabinoid found in hemp and cannabis (legal in Virginia) •Through chemical process hemp derived CBD can be used to make Delta-8 and Delta-10 THC (intoxicating and illegal) •Intoxicating hemp products: •Do not have any regulatory oversight •May be created using potentially harmful chemicals •May have other harmful additives •No assurances as to quality of manufacturing practices •Often sold to minors (through local retail establishments, online and other methods) 11 Virginia Beach Public Schools Percentage of Long-Term Suspensions/Expulsions involving Cannabis Related Products •School Year 2014-2015 – 22% •School Year 2019-2020 – 25% (On site attendance closed March 13, 2020 due to COVID) •School Year 2023- 2024 – 28% (YTD, 7 weeks remaining) Note that cannabis related products could include cannabis purchased legally through the medical market, cannabis purchased illegally through illicit market, or intoxicating hemp products purchased at retail stores, online or other methods. 12 Virginia Department of Health Emergency Department Visits Among Minors •Note: VDH has set up a “surveillance system” to better characterize the burden and impact of adverse impacts due to THC and CBD consumption on children in the Commonwealth •Note: Pediatric visits declined 21.5% in second half of 2023 compared to first half of 2023, which coincides with new regulations on hemp derived products going into effect on July 1, 2023 13 Dispensaries vs CBD/Vape Shops Licensed Medical Dispensary CBD/Vape Retailer 14 Medical vs Unregulated Retail Medical •Must be licensed and subject to oversight and enforcement by the CCA •Patients must have valid written certification from a practitioner •Security Checks ID before entry granted •No display of cannabis images •No attraction to minors under 18 (packaging or advertising) •No giveaways or free samples •No loitering Virginia Code: 18VAC110-60-215 Unregulated (CBD/Vape Shops) •No licensing or oversight of CBD retailers •No registration with state •No security required to check ID •No prohibition on image displays •No prohibition on attracting minors •May give away product or free samples •No prohibition on loitering •Are known to sell illict market cannabis •Note: Not all CBD shops are bad actors, but many bad actors use CBD as a front for selling intoxicating hemp and illegal cannabis. The unregulated nature of the vape/CBD industry does allow for bad actors. 15The Medical vs Unregulated Delivery Medical Unregulated 16 Products Licensed Medical Dispensary CBD/Vape Retailer/Online 17 Recommendations •As Adult Use sales do not appear to be imminent, continue to monitor – even when law does change expect at least a six-month gear up period •Consider increased monitoring and enforcement of CBD/Vape shops that are selling intoxicating hemp products. Potentially partner with the Virginia Department of Health, Dept of Agriculture Office of Hemp Enforcement and Virginia State Police in their Education and Enforcement Efforts •Consider initiation/changes/improvements to: •Parental education programs •School Substance Abuse Intervention Programs (SAIPs) •Use of non-law enforcement personnel as School Resource Officers (SROs) •Use of different technologies for delivering education materials •City outreach and education programs 18