Cover Story | Economic Development
Then, earlier this year, Virginia became the 16th state in the U.S. — and the first in the South — to legalize recreational marijuana. Lawmakers made it legal for people older than 21 to cultivate and possess limited amounts of marijuana, and they also started the process of writing regulations for a commercial market to open in 2024. Legalization in Virginia has opened a vast, uncertain new industry that still faces many unknowns. Entrepreneurs, including the four brothers behind Pure Shenandoah, are scrambling to engage the market. Johnson says marijuana was “always in the back of our minds” when they founded Pure Shenandoah. “Some of that’s out of our control,” he notes, “but the way the laws came down, it couldn’t have been any better.” Marijuana represents only one of three
new, potentially giant industries for the commonwealth.
“I genuinely thought that being at the forefront of solar and renewable [energy] was a once-in-a-lifetime opportunity to be on the front end of a multibillion-dollar industry,” says Greg Habeeb, president of Richmond-based Gentry Locke Consulting, a lobbying, communications and marketing business started by the Roanoke law firm. “Then a year later, it’s the same thing with casinos and online gaming, and the next year, it’s the same with cannabis.”
Widespread impact A 2020 study by Virginia’s Joint
Legislative Audit and Review Commission (JLARC) found that marijuana legalization could generate between $31 million and $62 million in tax revenue during its first full year of sales, and between $154 million and $308 million by the fifth year of com- mercial sales. By comparison, Colorado, an early legalizer, collected $387.4 million in state taxes and fees in 2020 on an industry that recorded $2.2 billion in annual sales last year, according to The Denver Post. Virginia’s new law will create up to 400 retail licenses, 450 cultivation licenses, 60 processing or manufacturing licenses and 25 wholesale licenses. (The state ruled out an ABC store model for marijuana retail sales because it would have required state employ- ees to do something federally illegal, experts say, and also because the Northam adminis- tration and legislators wanted to make social equity a priority in awarding retail licenses.)
24 | NOVEMBER 2021 JUNE 2019
But state-level legalization of marijuana has broader implications for businesses stretching far beyond license holders. “You have a hard time finding a busi- ness that can’t be directly or indirectly affected,” Habeeb says. “We were having a hard time coming up with one that couldn’t find a way to be involved with cannabis. Transportation, technology, security, every- thing — there was always a way, if they wanted to, to be involved in this industry.” That can also include marketing, human resources and HVAC services. “Often with legalization, the focus is directed toward cannabis business licensing opportunities, but the economic opportunity afforded by legalization is so much greater than that,” says Jenn Michelle Pedini, develop- ment director for the National Organization
for the Reform of Marijuana Laws and executive director of Virginia NORML. “Cannabis businesses need all of the same services that any business needs. Not only do businesses need these ancillary services, so do consumers.” Take Lockgreen, a Suffolk-based family business that sells lockboxes for marijuana users to safely transport cannabis in compliance with state law, which requires marijuana to be in a sealed container while transporting it in a vehicle and not to be consumed by the driver or passengers. Husband and wife Ron and Sarah Kiah Morton see their endeavor both as a way to enter the burgeoning industry but also to educate communities that have tradition- ally been punished under earlier drug statutes.
Suffolk couple Ron and Sarah Morton started Lockgreen, a business selling lockboxes for marijuana users to comply with state law when transporting cannabis.
Photo courtesy The Cavalier Daily Photo by Mark Rhodes
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