Small cannabis entrepreneurs say they can’t compete against ‘Walmart of weed’

RICHMOND VA — Many small entrepreneurs in cannabis believe large companies are trying hard to lock them out of this industry and provide funding that allows them to get more access to lawmakers.

“Small businesses are the backbone of the country,”Sarah Grant, general manger of The Dispensary Richmond.

The shop was opened in August and sells vape cartridges and Delta-8-THC flowers.

“It’s hard to compete if you’re going against the Walmart of weed,” Grant said.

Grant stated that the lack of structure in recreational cannabis markets is stressful for small businesses. She also said that her store cannot compete with lobbyists from the national cannabis corporations.

In the last four years, new clients, special interest groups, and investors have entered this arena as Virginia lawmakers struggled with recreational and medical cannabis legislation. State lawmakers decriminalized simple possession of cannabis in 2021 with initial plans to legalize recreational cannabis by 2024—though that floundered in this year’s session. Potential sellers were left in uncertainty and certain parts of the legislation had to be reenacted, or passed again the following year before becoming law.

The market favors four companies that are licensed to serve five Virginia health districts. A licensed company is not available for the Northwest health district. Only state-licensed companies are allowed to open medical cannabis dispensaries within their district.

Some of these companies have merged in order to expand their businesses and have the cash they need to support Virginia politics.

Stephen Farnsworth is a political science professor at the University of Mary Washington and director of the school’s Center for Leadership and Media Studies.

“The recreational marijuana industry is the wild, wild West right now,”Farnsworth spoke.

The state’s commercial cannabis market could yield between $30 million to $60 million in tax revenue in the first year, according to a 2020 report by the Joint Legislative Audit and Review Commission, the state’s legislative watchdog agency. JLARC estimated that commercial cannabis sales could generate tax revenue of $154 million to $308 millions by the fifth year.

Virginia’s illicit recreational cannabis market is estimated to be the No. According to the 2020 Census, it is the No. 4 country. U.S. Cannabis Report. Virginia’s market generated roughly $1.8 billion of America’s estimated $60 billion in total illegal cannabis sales in 2020.

Farnsworth stated that a burgeoning industry is always dominated by wealthy individuals competing for the best position.

“From the point of view of an elected official, that means there are a lot of people who want to influence you,”Farnsworth spoke.

High stakes to get in the business

Sen. Adam Ebbin of D-Alexandria sponsored a billTo establish a recreational cannabis market, a few dispensaries will be allowed to operate in the state. Large-scale industrial hemp processors will also be allowed. This measure was intended to reenact legislation from last year and speed up the creation of a recreational cannabis market.

Each of the currently licensed medical marijuana dispensaries is paid $70,000 totalIn permit fees for their medical facility to become operational. The annual renewal fee for medical facilities is $10,000. The dispensaries would have paid $6 million to hold another license to open recreational retail stores and hemp growers would pay half a million dollars each, under Ebbin’s amended bill. Lawmakers could not agree on several conditions to the bill and decided instead to carry it forward to the 2023 legislative sessions.

Jason Amatucci is the president of Virginia Industrial Hemp Coalition. This group aims to establish strong hemp-centered manufacturing and agricultural industries in the commonwealth. Amatucci pointed to California’s thriving hemp industry. California produced nearly 4 million square footage of hemp grown in protected areas in 2021 —about double the production amount of the next largest state, Colorado, according to the U.S. Department of Agriculture. California has a $4 billion market annuallyForbes magazine estimates that there are approximately 1.2 million cannabis sales worldwide, but the majority of these are for medical and recreational purposes.

Amatucci said he didn’t want to see pharmaceutical companies gain a foothold in the recreational market before small businesses could.

“The government wants to protect Big Pharma,”Amatucci referred to the national medical marijuana companies’ retail purchasing power and the donations made towards legislators. “Follow the money on this, because it’s all in plain view for everyone to see.”

Monopolies in medical cannabis

A Virginia Board of Pharmacy licensed practitioner is the only way to legally buy cannabis with more than.3% THC. The practitioners will issue a written certification that a patient is suffering from an illness and would benefit by medical cannabis. To get their official card, approved patients must apply to the board. The General Assembly recently A bill was passedThis allows patients to bypass the Board of Pharmacy application in July and receive a referral to the dispensary.

Virginia’s licensed medical cannabis companies can grow cannabis at their processing facility and sell it through their dispensaries. Virginia NORML, a cannabis advocacy group, reports that there are currently 11 dispensaries offering medical cannabis. Each licensee is allowed one dispensary for growing or processing cannabis, as well as up to five satellite retail locations.

These are the four licensed operators to serve Virginia:

  • Dalitso, also known as Beyond/Hello, is the Northern health district.
  • Dharma Pharmaceuticals is also known as RISE in the Southwest health district.
  • Green Leaf Medical in the Central health district.
  • Columbia Care in Eastern health district.
  • Green Leaf Medical, located in Richmond, is the headquarters of this company. Was acquiredColumbia Care in 2021

    Cresco Labs announced plans to acquire the Chicago-based medical cannabis giant Cresco Labs. PurchaseColumbia Care bought Columbia Care in March for $2Billion, but the deal is not yet closed.

    Jushi Holdings is based in Florida and operates in five other states. AcquisitionThe Virginia-based Dalitso in 2021 will be worth approximately $22 Million

    Dharma Pharmaceuticals, which is based in Chicago, was acquired by Chicago-based Green Thumb Industries. 13 other marketsAccording to the Bristol Herald Courier, it is.

    The state’s four licensed pharmaceutical processing firms now fall under the ownership of three out-of-state companies valued at hundreds of millions and traded on the stock market.

    Lobbyists for Cannabis

    If the company reaches its forecasted revenue, the merger of Columbia Care and Cresco Labs could make them the second-largest retailers in the country, and the largest outside of Florida. Joint press releaseThe company stated that they would have 130 retail stores in eight states. It was estimated that it could earn over $100 million annually.

    Campaign donations have been made from cannabis money. According to the The, between 2021-2022, a total of $160,000 was donated by licensed operators to Democrats and just over $100,000 for Republicans. Virginia Public Access Project, a non-profit that tracks campaign financing reports.

    Jushi contributed $117,000 in total. Jushi now owns Dalitso which contributed $30,000. The total donations of the other operators ranged from $21,000 to $50,000. There are also donations from testing laboratories and individuals involved in this industry.

    The amounts don’t rival the hundreds of thousands of dollars, or even millions, that other political special interest groups have spent. However, the cannabis industry is relatively new and small business owners who thought they would have a clearer path into the market last year are now concerned.

    “At a minimum, a campaign donation is going to buy you an opportunity to be heard,”Farnsworth spoke.

    Donations don’t guarantee a lawmaker will support legislation favorable to a lobbying firm, but money can buy access, Farnsworth said.

    Del. According to VPAP Dawn Adams (D-Richmond) is the only nurse practitioner within the House of Delegates. Adams is registered with the state in order to refer patients for medical marijuana. RVA Telecare is Adams’ business. A consultation to obtain a medical cannabis card will cost $155.

    Adams sponsored numerous pieces of legislation regarding cannabis reform. She gave testimony in support of the now-deadSen. Emmett Hinger, R. Augusta, introduced the bill. Many hemp advocates said that it would restrict their products and instead promote medical cannabis. The bill also sought to ban synthetic Delta-8 products.

    Adams declined to answer questions about the revenue she earns from issuing medical marijuana referrals. Adams did not respond to an email and a phone call to confirm her feelings about a potential conflict of interest.

    Conflict of interest is defined in state code for legislators. According to state code, legislators with a personal interest should be disqualified from voting on measures. Code of the state. If they are informed of any potential interest, they can participate in discussions. According to the, personal interest can exist if a lawmaker has a personal stake in a business or provides services related to the proposed legislation. State code

    Adams listed her Integrated Health Consulting company This was earlier in the year as an economic interest with the state’s Ethics Advisory Council. Telecare is offered by the A Telecare. ListenedThe company has been registered twice with the State Corporation Commission: once under Integrated Health and once as its own entity. The company is not listed with the council as a potential conflicts of interest.

    The lawmaker voted for a billThis allows a patient to obtain a medical cannabis card without the Board of Pharmacy. Later, she was recorded as “present but not voting”The same applies to an identical Senate bill. The lawmaker didn’t excuse herself Voting in support of Hanger’s bill.

    The delegate Before the final House vote on Hanger’s bill, and said that she has no financial interest in her support of the legislation.

    “All I can tell you is that I spend a lot of time reading, studying,” Adams said. “I have no financial stake in anything … this is a public safety issue.”

    Adams wanted the market to have more regulation and safety, she testified.

    Cannabis advocates said Hanger’s bill would push people toward the medical cannabis industry, which Adams is a part of, while eliminating access to certain hemp produced, low-THC CBD products.

    “They can position themselves so that the medical monopoly is the only ones that can sell these products,” Amatucci said. “What we have now, with this medical monopoly system is worst product, worst prices.”

    Licenses for social equity

    Luke Greer is the owner and operator of Northern Virginia Hemp Co. He has been in Virginia since legalization of industrial hemp farming.

    “I don’t mean to villainize large money interests,”Greer said. “But I don’t feel that they should prioritize that over the small businesses that have been operating in the space prior.”

    Colorado’s Department of Revenue issues licenses to recreational cannabis retailers for approximately $7,500 per licenseApplication fees. California’s Department of Cannabis Control issues licenses A ranked revenue system is capped at $96,000 for retailers making more than $7.5million. Applicants adversely affected by the criminalization cannabis Can be appliedCalifornia residents can have the fee waived

    Virginia lawmakers disagree on whether and how to make the recreational market more accessible for people who were operating in it before decriminalization. This is what cannabis reform advocates call “the legacy market”.

    Del. Charniele Herring, D-Alexandria, introducedThe House bill 2021It legalized simple possession of marijuana and created the first outline for a recreational market. Social equity provisions were included in the bill to prevent existing processors depriving smaller entrepreneurs. It also addressed decades of disproportionate policing in relation to cannabis crimes.

    Lawmakers differed on the number and price of licenses that social equity applicants should receive, as well as how many licenses they should be granted.

    Legislators A bill was killedDel. Danny Marshall (R-Danville) proposed that licensed industrial hemp sellers who wanted to sell recreational cannabis must pay a $1,000,000 fee to the Board of Pharmacy. In addition, they must be a long-time resident of an economically disadvantaged area and a business owner.

    Grant stated that these fees are not accessible to small business owners, particularly if they have been financially impacted by legal system.

    “People have been in this business their whole life, just in the illicit market,” Grant said. “Those folks should definitely have an opportunity to get into this legally.”

    Amber Littlejohn is the executive director of Minority Cannabis Business Association. This group wants Virginia to create a legal cannabis market that is fair to minorities. War on Drugs.

    “When we make the investment in social equity programs, we are going to get that back,”Littlejohn said. Supernova Women is an advocacy organization run by women of color who seek to lower barriers to entry and increase sustainability in the cannabis industry. A Supernova Women studyThe return on every dollar that is invested in a social marijuana equity program was $1.20 this year.

    “Even if people are not compelled by the moral imperative, there is actually economic and broader social reasons to do it,”Littlejohn said.

    She was hopeful that her groups’ demands for inclusion in the industry would be met but said that it would be an uphill battle.

    Michael Carter Jr., an 11th-generation farmer, is the patriarch of Carter Farms in Orange County. Carter said social equity programs won’t solve the damage done to communities of color but recognizing the past by opening access to licensing could be a start.

    “We had the opportunity to make up the deficit when it comes to opportunities like this,”Carter said. “But many farmers and many African Americans realize that we’re not gonna get that opportunity.”

    Capital News Service is a program of Virginia Commonwealth University’s Robertson School of Media and Culture. The program provides coverage for the state government through students.

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