Can a Virginia smoke shop or members-only club give customers marijuana with a merchandise purchase and call it adult sharing?

Subject

Whether a CBD store or smoke shop unlawfully distributes marijuana when it gives marijuana to customers in connection with merchandise sales.

Plain-English summary

Virginia Attorney General Jason Miyares concluded that the shop practice described in the request is illegal distribution under Code § 18.2-248.1. Customers purchased other merchandise and received marijuana in an amount tied to the purchase price. The AG assumed that people who made no purchase received no marijuana. When the marijuana is given at the same time as the merchandise sale, or only because the customer made that purchase, the transfer is not protected “adult sharing” under § 4.1-1101.1.

Virginia law permits adults aged 21 or older to share up to one ounce of marijuana, or an equivalent amount of marijuana products, without remuneration. The statute expressly excludes gifts given at the same time as another reciprocal transaction, advertised with an offer to sell goods or services, or contingent on a separate reciprocal transaction. The opinion applies the first and third exclusions to the described practice. It says the shop's private-club label and its source of marijuana do not change the analysis. It does not decide whether a different membership-fee arrangement is lawful.

What this means for you

If you run a CBD store or smoke shop

Calling marijuana a “gift” does not protect the merchandise-purchase arrangement the AG analyzed. On the stated facts, the shop gives marijuana only to paying customers, with the amount reflecting the value of what they bought. The AG concluded that a gift made when the sale occurs or dependent on the sale is unlawful distribution. The opinion does not evaluate a membership-fee-only model or another business design.

If you are a customer

The opinion describes the shop's distribution as unlawful. It does not decide whether a customer in a particular transaction commits an offense. The statutory adult-sharing exception requires a transfer between people at least 21 years old without remuneration and excludes gifts connected to a reciprocal sale in the ways the statute specifies.

If you evaluate a particular transaction

Check the timing and condition of the gift. The opinion says a marijuana gift at the same time as a merchandise sale is contemporaneous with a reciprocal transaction; a gift available only with purchase is contingent on that transaction. Either relationship removes the transfer from the adult-sharing exception on the facts presented.

Common questions

Q: Is a free marijuana gift with a merchandise purchase protected adult sharing?
A: No, on the facts in this opinion. The AG concluded that a gift made with or dependent on the merchandise sale is unlawful distribution under § 18.2-248.1.

Q: Does calling the shop a private club change the answer?
A: No. The AG says § 4.1-1101.1 does not distinguish private from public sharing, and club status is immaterial to the described transaction.

Q: Does it matter where the shop obtained the marijuana?
A: The AG said the source was immaterial to whether the shop's described transfer to its customers is unlawful distribution.

Q: Does the opinion rule on a shop that charges a membership fee but no merchandise price?
A: No. The request and conclusion concern marijuana gifts contemporaneous with, or contingent on, merchandise sales. The opinion does not analyze a fee-only arrangement.

Background and statutory framework

The opinion explains that personal possession of certain amounts of marijuana by adults aged 21 or older became lawful under the Virginia Cannabis Control Act, but recreational distribution remains illegal under § 18.2-248.1. Section 4.1-1101.1 protects “adult sharing” of no more than one ounce, or an equivalent product amount, between adults without remuneration. Its text excludes gifts made contemporaneously with another reciprocal transaction, offered with a sale, or contingent on another reciprocal transaction.

The described shops sell merchandise and give purchasers marijuana in an amount reflecting the price paid. Applying the statutory exclusions, the AG concluded that a gift at the time of sale or dependent on sale is outside adult sharing and constitutes unlawful distribution. He limited his conclusion to the described scenario.

Source

• Landing page: https://www.oag.state.va.us/annual-reports-opinions/official-opinions
• Original PDF: https://www.oag.state.va.us/files/Opinions/2023/23-012-Plaster-issued.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain; the linked PDF is authoritative.

COMMONWEALTH OF VIRGINIA

Office of the Attorney General

Jason S. Miyares
Attorney General
202 North Ninth Street
Richmond, Virginia 23219
804-786-2071
Fax 804-786-1991
Virginia Relay Services
800-828-1120
7-1-1

April 20, 2023

The Honorable J. Chris Plaster
Commonwealth's Attorney for Tazewell County
Post Office Box 946
Tazewell, Virginia 24651

Dear Mr. Plaster:

I am responding to your request for an official advisory opinion in accordance with § 2.2-505 of the Code of Virginia.

Issue Presented

You ask whether a business practice of giving away marijuana, free of charge, to customers who purchase other merchandise constitutes the illegal distribution of marijuana.

Background

You inquire regarding certain practices of businesses operating CBD stores and smoke shops (collectively, "shops"). You relate that, throughout the Commonwealth, some of these shops engage in the following business practices, or practices that are substantially similar. In addition to offering certain merchandise, such as grow supplies, CBD, or hemp products, for sale, the shops claim to be private, "members only" businesses that facilitate the adult sharing of marijuana among their member customers. Although the shops technically do not offer any marijuana for direct sale, customers who purchase shop merchandise receive marijuana as a complimentary "gift." The amount of marijuana "gifted" reflects the dollar amount of the goods purchased. I assume from your description that no gift of marijuana is provided to individuals who do not make a purchase. You further relate that the gifted marijuana is sourced from a "community of growers" who "gift" it to the shop; the shop owners engage in profit sharing with the growers using the proceeds of the merchandise sales.

Applicable Law and Discussion

The General Assembly enacted the Virginia Cannabis Control Act (the "Act") in 2021. Pursuant to the Act, personal possession of certain amounts of marijuana by individuals 21 years of age or older is now legal in the Commonwealth. The distribution of marijuana for recreational use, nevertheless, remains illegal under Code § 18.2-248.1.

As now codified in § 4.1-1101.1, however, the Act further provides that "[n]otwithstanding the provisions of § 18.2-248.1, no civil or criminal penalty may be imposed for adult sharing of an amount of marijuana that does not exceed one ounce or of an equivalent amount of marijuana products." For purposes of the Act, "'adult sharing' means transferring marijuana between persons who are 21 years of age or older without remuneration." Section 4.1-1101.1 explicitly excludes from permissible "adult sharing" any

instances in which (i) marijuana is given away contemporaneously with another reciprocal transaction between the same parties; (ii) a gift of marijuana is offered or advertised in conjunction with an offer for the sale of goods or services; or (iii) a gift of marijuana is contingent upon a separate reciprocal transaction for goods or services.

Accordingly, under certain circumstances, "sharing" of marijuana between adults is legal and adults "sharing" marijuana as allowed under § 4.1-1101.1 does not constitute unlawful distribution. You ask whether the conduct you describe falls within the ambit of legal adult sharing.

"When construing a statute, our primary objective is to 'ascertain and give effect to legislative intent,' as expressed by the language used in the statute." In interpreting legislative intent as expressed by "the plain meaning of the statutory language," courts "presume that 'the legislature chose, with care, the words it used when it enacted the relevant statute.'"

Section 4.1-1101.1 clearly establishes that "'[a]dult sharing' does not include instances in which (i) marijuana is given away contemporaneously with another reciprocal transaction between the same parties . . . or (iii) a gift of marijuana is contingent upon a separate reciprocal transaction for goods or services." Because the Act otherwise permits certain exchanges of marijuana when there is no "remuneration," this language serves to foreclose potential loopholes for schemes where there are transactions comprising direct or indirect exchanges that involve items of value in an attempt to circumvent the law.

In the scenario you present, shop customers who buy merchandise are "gifted" with an amount of marijuana that reflects the dollar value of the items purchased. Accordingly, the customers and the shop are engaged in a "reciprocal transaction" for the sale of goods. Should the "gifting" occur upon sale, then it will have occurred "contemporaneously with" that transaction, and if a "gift" is available only with a purchase of other goods, then it is "contingent" upon that purchase. Neither an establishment's status as a private club nor the source of its marijuana is material to whether the establishment or its customer members are distributing marijuana unlawfully; the provisions of § 4.1-1101.1 do not include either "private" or "public" or distinguish between private or public sharing. Thus, to the extent a customer is "gifted" an amount of marijuana either at the same time as, or dependent upon, the sale of legal, non-marijuana merchandise, such a transaction is not "adult sharing" and constitutes the unlawful distribution of marijuana.

Conclusion

Accordingly, based on the facts provided, it is my opinion that a CBD store or smoke shop engages in the illegal distribution of marijuana, in violation of Code § 18.2-248.1, when the shop "gifts" marijuana to customers contemporaneously with, or contingent upon, the sale of merchandise as described in the scenario presented.

With kindest regards, I am,

Very truly yours,

Jason S. Miyares
Attorney General