We spend a lot of ink (and digital electrons) on all the wrongs that a suburban-dominated state government has inflicted on rural Virginia.
How the legislature has repeatedly killed all attempts to ease the disparities between schools in the state’s most affluent regions and its poorest ones.
How the legislature saw fit to abolish the coal tax credit but offered the coal counties nothing in return except the promise of an economic study.
How Gov. Ralph Northam proposed as a candidate to turn the University of Virginia’s College at Wise into a research university that could generate economic spinoffs for the region but hasn’t made any effort in office to do so.
So we are positively slack-jawed at just how pro-rural the bill legalizing marijuana in 2024 is.
We’ve previously written about the controversial “social equity” provision that gives some applicants for licenses preference over others. This is usually (and correctly) described as an effort make up for years of racial discrimination during which Black Virginians were four more times likely to be charged with misdemeanor marijuana offenses than whites. Certainly the part that gives a preference to graduates of the state’s historically Black colleges will benefit certain Black applicants. However, the part that gives a preference to applicants from economically distressed localities will benefit lots of applicants in rural Southside and Southwest Virginia, with the latter being overwhelmingly white.
We understand why Republicans voted against the bill. Some of a more libertarian bent were said to be open to the concept of legalization but balked at the social equity provision; they weren’t keen to vote for what in another era we’d have called “affirmative action.” Philosophically, those legislators are probably in tune with most of their constituents on that score. Nonetheless, many of them wound up voting against the economic interests of their districts.
If you think marijuana is the devil’s lettuce — well, we’re not here to argue that. We will, though, point out that there are lots of ways that rural Virginia can make money off legal marijuana. Intriguingly, many of these opportunities are ones that are specifically blocked in some of the most famous pro-weed states.
The focus is often on marijuana retail stores — the most visible aspect of legalization — but economically speaking, the real question is about the rest of the marijuana supply chain. Where will it be grown? And where will it be processed? That’s where the bigger money may be. With that in mind, the most relevant portion of Virginia’s pot bill deals with cultivation. Unlike Colorado and Washington, the first two states to legalize recreational marijuana (back in 2012), Virginia law specifically says that licensed cultivation is legal everywhere. At least 39 of Colorado’s 64 counties ban cultivation. In Washington, 134 of the state’s 281 local government have some kind of ban on marijuana businesses. Most are aimed at blocking retail stores but some ban cultivation, as well. Not surprisingly, those bans are concentrated in the most conservative (and rural) parts of the state.
The effect of that is that many rural areas in those states are denied the economic benefits of legal marijuana. Instead of farms there are lots of greenhouses, which often wind up in the urban areas that do allow marijuana cultivation. Marijuana Business Daily reports that California — which has the nation’s biggest marijuana market but also some of the most restrictive laws — more than 80% of the state’s pot supply comes from indoor operations. The biggest marijuana county in California isn’t in farm country but in Santa Barbara. In Colorado, there are now so many marijuana greenhouses in Denver that at one point they accounted for 3.9% of the city’s electricity usage. Colorado Public Radio reported in 2018 that “power use by indoor marijuana grows represents a growing problem for states like Colorado that want to reduce climate-change causing greenhouse gases.” This is what’s known as “inconvenient.”
That’s why Virginia’s “grow it anywhere” rule is so important. Rural Virginia has a better chance of getting a share of the production end of the business than rural areas in other states have. That’s no guarantee that rural Virginia will see marijuana replace tobacco as a cash crop. By the time you factor in the cost of the security required for a marijuana farm, maybe a greenhouse is more economically viable. Not our area of expertise. Greenhouses also can produce a crop year-round. But the point is rural Virginia at least gets to compete for the up to 450 licenses that will be issued for marijuana growers. Farmers should like that. The state will also issue up to 60 licenses for manufacturing facilities (think processing the harvest into saleable form). You’d think those businesses would want to be relatively close to the growers (just like there used to be lots of tobacco processors in Danville). That means if rural Virginia can get a lot of growers, it might get some of those processors, too.
This is a jobs question, an issue that ought to get the attention of every local government in rural Virginia. A 2020 report by Leafly found that the marijuana industry accounted for 39,804 jobs in California, 34,705 jobs in Colorado, 23,756 in Washington — and 234,000 nationally. We’re about the same size as Washington so that gives you so sense of how many jobs might get created in Virginia. Where will they be?
Forbes reports: “In cultivation, trimmers start at about $15.00 an hour on average while a director of cultivation can earn about $115,000, an increase of 25% over the previous year. Extraction technicians average about $37,000 per year, while managers earn about $65,000. In retail, budtenders make about $15.00 per hour plus gratuities and a vice president of retail operations averages about $150,000 annually.”
Let’s put it this way: That $37,000 for extraction technicians is higher than the median household income in 13 Virginia localities, all of them in Southwest and Southside with the exception of Petersburg. Those are also localities where marijuana applicants will likely qualify for some kind of preference in licensing. Other states have laws that effectively keep those jobs out of their rural areas, where they’d do the most good. Virginia opens the door. So here’s the question: How hard will rural localities work to get a share of this new industry?
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