This is part of our Cardinal Way project on promoting civil discussions. Last month we ran opposing pieces on whether to legalize retail sales of cannabis, with state Sen. Aaron Rouse, D-Virginia Beach, writing the yes side and Del. Wendell Walker, R-Lynchburg, writing the no side. Mike Troxel, a member of the board of advisors for the Virginia Hemp Coalition, now offers a third point of view.

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I have known my friend, Del. Wendell Walker, for roughly 35 years or more, and I appreciate his willingness to listen and have a constructive dialogue on the somewhat complicated and fairly new issues surrounding hemp and cannabis. Similarly, I appreciate Sen. Aaron Rouse’s willingness to dive in on the Senate side regarding these issues. While they address the issues from the perspective of their parties, I would like to address it from the perspective that hasn’t been mentioned yet: the consumer, taxpayer and voter.

I believe my friend Wendell misses the point directly off the bat in his thoughts on a legalized cannabis market. His question as to how Virginia can regulate recreational cannabis when they can’t regulate the gray markets is answered similarly to Mr. Khrushchev’s discovery upon visiting U.S. grocery stores in 1959: Gray and black markets only flourish because you get in the way of normal business transactions via unnecessary regulatory barriers. Ask California, Oregon and Washington state about that.

Likewise, Senator Rouse starts to touch on the point that we do need a legal recreational cannabis market but then misses the point in terms of what those regulations should look like. It is difficult on one hand to say that you want a fair and level playing field for all, and then immediately discuss state handouts for some groups. That is like saying that everyone is equal, but that some are more equal than others. Capable business owners who cater to the demands of their customers will do just fine, and those are found throughout all socioeconomic strata.

Further, given the state’s clear track record of failure when it comes to business ventures surrounding vices, not “helping” entrepreneurs would probably be the best thing for them. Something about breaking your legs, selling you a wheelchair (made with your tax dollars), and then telling you to thank them because otherwise you wouldn’t be getting around so well. 

The old joke about government not being able to turn a profit running a brothel and selling alcohol (here’s looking at you, Mustang Ranch Brothel in Nevada) rings true here too. The Virginia ABC has declining profits, rising costs, $2.7 million in missing alcohol from a distribution center, and “financial irregularities.” Let’s stop beating a dead horse and making the taxpayers pay for it.

By any measure, Virginia’s state-sponsored cannabis monopolies are an abject failure. By the General Assembly’s own study, 90% of cannabis customers went out of their way to avoid buying in Virginia. Virginia consumers don’t want what the state is trying to force them to buy. The two biggest complaints I’ve heard are low quality and exceedingly high prices. Funny how that happens in a monopoly. Worse, the General Assembly obliterated a Virginia CBD industry with $3.3 billion in economic impact, built off of mostly small Virginian-owned businesses to do it. It was a mere coincidence, I’m sure, that Jerry Kilgore (was and continues to be a lobbyist for Dharma Pharmaceuticals — the cannabis monopoly holder for HSA III in Southwest Virginia) is the brother of Del. Terry Kilgore, who carried the bill (HB2294) that made basically every full spectrum, federally legal, CBD product in the state illegal for everyone but the medical cannabis monopolies to sell.

To answer my friend Wendell’s position, it is not the state’s business to regulate serving size or quantity of consumption by legal adults. If that were the case, every buffet in the state would be shut down and the ABC would start carrying infinitely smaller bottles of alcohol. If our citizens are intelligent enough adults to vote for their representatives, then those elected representatives shouldn’t insinuate that those same adults are not intelligent enough to figure out how much they want to buy, of which product, for which purpose. Further, it’s not the business of the state in a representative government to insert its nose into the different reasons why adults buy different products — or of how potent those products may or may not be. The market will determine that with every purchase — creating a feedback mechanism on customer satisfaction that is infinitely more responsive and more accurate than anything the government could cobble together (just ask the Soviets). Republicans would be shocked at how many members of their base use cannabis on a daily basis to avoid having to use prescription drugs shoved at them by Big Pharma and the medical establishment for all sorts of various maladies.

Senator Rouse is correct about Virginia companies or the lack thereof. Currently zero of the five state-granted cannabis monopolies are Virginia-owned. It is an affront to all of us that a politboro of unelected cannaczars would choose only out of state companies to bestow the riches of government cartel ownership on, to the exclusion of the taxpayers paying their six-figure salaries and seven-figure budgets. (For reference, the CEO of the Virginia Cannabis Control Authority [VCCA] makes $182,000 per the 2024 budget, and the VCCA is slated to have a $6.2 million administrative budget in the 2025 budget bill [HB6001].) I do worry about the direction that his party means to take the legislation though. It is insulting when a government takes someone’s rights and then leases those rights back via fees, taxes, or other licensing schemes. People have a right to buy and use cannabis, so let’s stop quibbling about how big of an additional sin tax will be attached to it, and whose pet projects will be funded with it.

The excuse that it must be done “for the children” has become a bit tiresome. Do the same thing that is done for alcohol and tobacco sales. Problem solved. Additionally, the tired trope of “supporting small business” gets old when it is precisely small businesses that are intentionally excluded. Small businesses survive precisely because they cultivate a loyal customer base that trusts them for quality products. It’s amazing how this gets touted every November, but promptly forgotten in January. Additionally, the regulatory burdens should not be crafted specifically to be so heavy that these small businesses cannot bear them. Consumers need to know a very small set of things: Are there heavy metals and if so, in what quantities? Are there molds or other contaminants? What is the content of the cannabinoid being advertised? Everything else is superfluous. If the manufacturer wants to add more information, great. If the consumer only buys products with more information — or doesn’t even look at the information, great. That’s the marketplace at work.

Perhaps the worst result of all of this — which lies directly at the feet of Governor Youngkin and the General Assembly, is turning our state and local law enforcement into essentially the armed enforcement wing of the state’s cannabis cartel. We have major fentanyl and opioid problems, violent crime is up, and yet untold hundreds of thousands of taxpayers’ dollars are being wasted persecuting people for selling plants without the king’s tax stamp, not buying from the king’s cannabis vassals, and generally simply not being part of the king’s cannabis cartel. Yes, Virginia, we’ve criminalized unlicensed farmers markets. 

Cannabis is here to stay. The state’s regulatory scheme has failed spectacularly — as expected, but the answer is very simple. Use a simple set of testing requirements that are not cost prohibitive for small businesses. Use the same laws regarding underage sales that exist for alcohol & tobacco. Use the basic state sales tax that already exists. Use a low registration fee for growers, manufacturers, and sellers so that folks with small budgets aren’t priced out. Finally, pardon all nonviolent cannabis possession and distribution convictions along with protecting gun ownership rights for cannabis possessors and users like (but not limited to) our veterans. Whoever gets this less wrong will likely win the governor’s mansion in 2025.

I appreciate the thoughts and comments of both my friend Delegate Walker, and Senator Rouse. From my perspective, for the sake of both consumers and good policy: The answer is more free markets, not less — just like the USSR and grocery stores.