The top five most-read daily news stories on VirginiaBusiness.com from Feb. 14 to March 13 were led by news that Danish toymaker Lego will delay production at its Chesterfield County facility until 2027.
Lego Group will begin production at its $1 billion manufacturing facility at Meadowville Technology Park at least a year later than originally announced. (Feb. 15)
McLean-based Capital OneFinancial plans to acquire Discover Financial Services in an all-stock deal that would make Capital One the nation’s biggest credit card lender. (Feb. 19)
Dominion Energy reached an agreement to sell a 50% noncontrolling stake in its Coastal Virginia Offshore Wind project to investment firm Stonepeak. (Feb. 22)
The U.S. Department of Education levied a record fine against Liberty in a settlement of alleged Clery Act violations by the Lynchburg-based Christian university. (March 5)
Virginia Gov. Glenn Youngkin vetoed legislation Thursday that would have put Virginia on the path to a $15 per hour minimum wage and set up a retail cannabis market, killing bills that were important to Democratic state legislators he blamed for torpedoing the $2 billion Alexandria sports arena deal he’d championed.
Amid a deepening partisan divide in Richmond, Republican Youngkin announced six more vetoes Thursday evening, targeting legislation supported by Democratic lawmakers that would have set a $15 per hour minimum wage in Virginia beginning in 2026, as well as a measure that would have established a retail market structure for recreational marijuana sales beginning next year.
The vetoes were hardly a surprise to political observers across the state, as Youngkin had previously signaled his lack of support for a legal cannabis retail market, although legislators from both parties said before this year’s General Assembly session that they have problems with the status quo, in which it’s legal to possess small amounts of marijuana and purchase cannabis products with a doctor’s prescription in licensed dispensaries — and yet the billion-dollar recreational cannabis retail black market remains unregulated and untaxed.
HB 1 and its Virginia State Senate counterpart, SB 1, would have increased the state’s mandatory minimum wage from $12 an hour to $13.50 starting Jan. 1, 2025, and set a $15 per hour minimum wage at the start of 2026. The legislation passed through the General Assembly along party lines this session — with 51 Democrats voting yes, and 49 Republicans voting no in the House of Delegates, and 21-18 in the Senate, with Republican Sen. Mark Peake abstaining.
Youngkin wrote in his veto statement that raising the state’s minimum wage to $15 an hour in less than two years “would implement drastic wage mandates, raise costs on families and small businesses, jeopardize jobs and fail to recognize regional economic differences across Virginia.” He had previously said there was no need for the state to raise the mandatory minimum wage, and that the free market was taking care of the issue.
The Virginia Chamber of Commerce applauded the minimum wage veto, saying in a statement Thursday, “Although Virginia’s economy has recovered strongly from the pandemic, surpassing pre-pandemic employment levels, not all regions of the commonwealth have experienced equal economic growth. Raising the hourly minimum wage to $15 would have led to shuttered businesses and lost jobs, particularly in the areas most in need of strong economic growth and particularly for Virginia’s small businesses.”
However, Sen. Ghazala Hashmi, D-Chesterfield, tweeted Thursday evening that “every working American deserves a living wage. Period,” in reference to the minimum wage veto, and Richmond Mayor Levar Stoney, a Democrat who is running for his party’s nomination for governor, wrote that he has proposed raising city employees’ minimum wage to $20 an hour, adding, “It’s high time our governor stops playing political games and focuses on what our families need to rise to the middle class.”
Cannabis retail legislation
Cannabis bills HB 698 and SB 448 passed mostly along party lines too, although Republicans Del. Chris Obenshain and Sen. Christie New Craig joined Democrats in voting yes. If enacted, the measures would have established a framework to allow legal retail sales of recreational marijuana in Virginia starting May 1, 2025, and issued state licenses to sell marijuana on Sept. 1, 2024.
“The proposed legalization of retail marijuana in the commonwealth endangers Virginians’ health and safety,” Youngkin wrote in his veto statement on the cannabis legislation. “States following this path have seen adverse effects on children’s and adolescents’ health and safety, increased gang activity and violent crime, significant deterioration in mental health, decreased road safety, and significant costs associated with retail marijuana that far exceed tax revenue. It also does not eliminate the illegal black market sale of cannabis, nor guarantee product safety. Addressing the inconsistencies in enforcement and regulation in Virginia’s current laws does not justify expanding access to cannabis, following the failed paths of other states and endangering Virginians’ health and safety.”
The twin bills’ chief sponsors — Sen. Aaron Rouse, D-Virginia Beach, and Del. Paul Krizek, D-Fairfax — blasted the governor’s veto in statements Thursday. “Gov. Youngkin’s dismissive stance towards addressing Virginia’s cannabis sales dilemma is unacceptable. Public servants are obligated to tackle pressing issues, regardless of their origin or culpability. They cannot cherry-pick which problems to address,” Rouse said, while Krizek said the governor’s “failure to act allows an already thriving cannabis market to persist, fueling criminal activity and endangering our communities.”
Thursday’s vetoes came after the legislative scuttling of a $2 billion deal to bring a proposed sports arena in Alexandria, a controversial deal touted by Youngkin as potentially producing 30,000 jobs for the state and billions in economic activity, while critics in the Virginia State Senate — led by Democratic Sen. Louise Lucas, who chairs the powerful Senate Finance & Appropriations Committee — balked at the idea of the state taking on approximately $1.3 billion in debt and establishing a state authority to manage the properties.
Although the deal was still considered alive — at least on paper — until the state’s 2024-26 budget is finalized in April, the Washington Wizards and Capitals’ majority owner, Monumental Sports & Entertainment CEO Ted Leonsis, and Washington, D.C., Mayor Muriel Bowser signed an agreement Thursday that will keep the NBA and NHL teams in the District of Columbia through 2050, putting an end to all negotiations between Monumental, the state and the City of Alexandria.
The arena proposal, while not directly tied to cannabis and minimum wage legislation, became a partisan battleground as Youngkin indicated that he wouldn’t compromise with Democrats on either priority, despite needing their votes to establish the state authority to own the arena and entertainment district. Meanwhile, Lucas blocked Senate Finance Committee votes on legislation that would have created the authority, and the state legislature’s 2024-26 budget amendments dropped all mention of the authority.
In a news conference after the General Assembly’s regular session closed in March without a Senate vote on the arena authority, Youngkin said he didn’t “have any interest in the cannabis legislation. … Bluntly, you want to talk about putting a cannabis shop on every corner. I don’t quite get it.”
RICHMOND — Virginia lawmakers, in alignment with recent federal attempts, introduced consumer protection bills to tackle surprise tickets fees and recurring subscriptions, but only one measure passed.
Autorenewal notification updates — passed Del. Michelle Maldonado, D-Manassas, introduced House Bill 744 to update current state code to add “small business” to the existing consumer protections for auto renewal. That includes any goods, services, money or credit for business purposes.
Maldonado was presented with the issue by a constituent and small business owner concerned about auto renewals for subscription services, she said.
“I think that it is always good for companies, for businesses and for consumers when there is clarity and a consistency of process,” Maldonado said. The state legislature in recent years has grappled with transparency around auto renewal notification and ensuring the consumer has a way to cancel their subscription. An update last year set a time frame that the business must notify the consumer within 30 days.
Maldonado’s bill now requires subscription services to inform customers of the option to cancel no less than 30 days and no more than 60 days of the billing date, if the contract is longer than 12 months.
For Virginians in a tumultuous financial situation, surprising or inconvenient subscription payments can mean the difference between paying a bill or putting gas in the car, according to Maldonado.
Maldonado is hopeful the bill will pass Gov. Glenn Youngkin‘s desk because it had strong bipartisan support in both chambers.
Ticket service fees and scalping — failed Del. Dan Helmer, D-Fairfax, introduced HB 277 to mandate that any ticket sold must display the total price upfront, including a resale ticket. New York, Tennessee and Connecticut have similar laws, according to a Ticketmaster brief on the topic. Sen. Stella Pekarsky, D-Fairfax, introduced Senate Bill 388, which had similar language in regards to misrepresenting a good or service and the disclosure of fees. It was amended in the House to reflect the language in Helmer’s bill.
Both bills passed their respective chambers with strong bipartisan support but could not pass a conference committee that tried to resolve the differences between the House and Senate amendments.
The House committed to creating a “ticket fee transparency act” that also allowed the attorney general’s office to litigate certain violations. In the end, there was a tied vote in the House and the Senate which ultimately kept the bills from passing after the presiding officers voted. HB 277 draws inspiration from the evergreen discussion around ticket costs for the Taylor Swift Eras tour, Helmer said.
But before that outrage existed, Pearl Jam challenged Ticketmaster in 1994. The band was frustrated by the ticket fees passed on to consumers, in part due to Ticketmaster’s exclusive contracts with stadiums, according to Rolling Stone.
Helmer learned from his staff how drip pricing fees sneakily make an already expensive ticket cost even more.
“I’ve been in the trenches fighting for price transparency for years,” Helmer said.
Helmer is excited to see this discussion taking place on a national level, but surprised the bill could not pass.
“We were disappointed because we’ve got to get rid of these junk fees,” said Stephanie Sedgwick, Helmer’s chief of staff.
Drip pricing and hidden fees are present in purchases such as airline tickets, food delivery and ticket pricing. A 2023 Senate Joint Economic report defined drip pricing as the practice of businesses showing a low base price, but various fees are added to the total throughout the purchase process.
A customer purchases a ticket that originally states the price is $50. As the purchasing process continues, the total increases when various convenience fees or services charges are added. The price may be nearly doubled by the time the checkout process is complete. Ticketmaster has transitioned toward optional all-in pricing to remove some of its added surprise fees. President Joe Biden met with representatives from many entertainment and lifestyle companies in June 2023, including Ticketmaster, DICE, SeatGeek and AirBnB.
Consumers using Ticketmaster can now see a display that explains the new all-in pricing model, if the venue or artist opts in. The tickets display all included fees as part of the total to pay, instead of additional fees tacked on to the end price.
However, fees can still be added to verified resale tickets through Ticketmaster. One example of this is the price of a resale two-day pass for live electronic act Pretty Lights in Hampton. An event pass with a listed price of $191 becomes over $230 during the checkout process.
Lucas Anderton is creative director for the political communication tech firm SBDigital and an avid concert goer. Anderton has traveled regularly to see some of his favorite jam bands like Phish and Goose, and knows tickets are difficult to find. The surprise ticket fees make it even harder, and also diminish transparency for fans.
“I think that we’re seeing fees that are as much as 75, 80% of the ticket value,” Anderton said. “It’s such a turn off.”
Hidden costs associated with rentals like AirBnB also directly relate to a music fan’s negative experience, considering the amount of people who travel for these big events, according to Anderton.
He is looking forward to all-in pricing becoming more common.
“I think that’s No. 1, is when you first click on that seat on the seat map, the seating chart, like the price it shows you is with fees and everything,” Anderton said.
Ongoing federal efforts The Biden administration has addressed drip pricing and junk fee issues since 2022. The White House announced a new strike force in early March this year that will examine “unfair fees,” which could save consumers an estimated $20 billion annually.
The Strike Force on Unfair and Illegal Pricing will also confront the issue of credit card late fees, which could reportedly save consumers $10 billion a year. The Credit Card Accountability Responsibility and Disclosure Act took effect in 2010 and set a precedent where banks could only charge late fees to cover the cost of a late payment.
Companies were allowed to set a $25 fee for the first late payment, and $35 for subsequent late payments, which increased to $30 and $41 due to annual inflation. Late fees are a “major driver” in the credit card company profit model, according to a report from the Consumer Financial Protection Bureau, or CFPB.
The CFPB in early March set the threshold for these late fees at $8. Larger card issuers can charge fees above the threshold if they can prove it will cover actual collection costs.
Capital News Service is a program of Virginia Commonwealth University’s Robertson School of Media and Culture. Students in the program provide state government coverage for a variety of media outlets in Virginia.
Since joining Roanoke County in 2022, Poe has been responsible for real estate development, business retention and expansion and key community partnerships, Franklin County said in a statement. She succeeds Beth Simms, who left the Franklin County post in October 2023 after more than two years to become Patrick County’s administrator.
“Franklin County has made key public investments that position the county for growth,” Poe said. “I’m excited to put my passion for economic development to work helping the county take advantage of the opportunities ahead.”
Poe previously worked as a business manager for Roanoke Regional Airport and as an economic development specialist for Downtown Roanoke Inc. She also worked in real estate and property management.
“Dani is the experienced leader needed at a critical juncture in Franklin County’s progress,” Franklin County Administrator Christopher Whitlow said. “It was clear during the interview process that she understands the county’s value proposition and knows how to leverage the county’s advantages to create jobs and investment, develop its workforce and continue to enhance livability.”
Poe is the 2024 chair of Leadership Roanoke Valley and graduated from Radford University, where she studied sports and fitness administration and management, according to her LinkedIn page. Next month, Poe will graduate from the University of Oklahoma’s Economic Development Institute program.
Located about 10 miles south of Roanoke, Franklin County was estimated to have 55,549 residents as of 2023, according to the U.S. Census.
“The ship was already in Virginia for a normally scheduled port of call and was headed to [Baltimore] afterward,” Port of Virginia spokesperson Joe Harris said in a statement to Virginia Business. “The accident happened, [and] the [Baltimore] cargo was offloaded here.”
The port expects these diverted volumes of cargo to increase. “It is, however, too early to discuss specific impacts to our operation,” Harris said.
Speaking to press during a bill-signing ceremony Tuesday, Virginia Gov. Glenn Youngkin pledged to assist Maryland during the disaster with everything from additional port capacity to emergency search and rescue services, saying the “entire commonwealth’s capabilities are at the ready.”
If assistance is requested, Virginia emergency resources available to Maryland include the Virginia State Police, the Virginia Department of Emergency Management and the Virginia Department of Fire Programs, according to a spokesperson for the governor.
On Wednesday afternoon, rescue workers recovered the bodies of two of six road construction workers killed in the accident in which the Singapore-flagged container ship Dali collided with the Key Bridge around 1:29 a.m. Tuesday, shortly after the ship lost power and its pilots issued a mayday call. National Transportation Safety Board investigators and other federal officials continued looking into the cause of the crash Wednesday, as the Biden administration pledged federal support to rebuild the bridge, calling on Congress to authorize hundreds of millions in funding likely needed for the bridge‘s replacement, an undertaking that could take at least a year.
It’s unclear, Harris said, how many additional vessels and what volume of cargo the Port of Virginia will ultimately see, especially since no one knows how long the Port of Baltimore will remain closed to all ship traffic. All vessel traffic in and out of Baltimore’s port has been suspended until further notice, Maryland’s transportation secretary announced Tuesday morning.
Ocean carriers will decide how Baltimore-bound imports and exports will be diverted to other ports, Harris said, adding that ships presently in transit with cargo bound for Baltimore will likely unload in the ports of Virginia, Philadelphia, or New York and New Jersey.
“Our effort today is continuing to communicate with the ocean carriers and cargo owners to let them know that we have ample capacity to handle additional cargo and vessels,” he said.
The increased traffic won’t impact the Port of Virginia’s service levels, according to Harris. “This is a modern, 21st century port that has a significant amount of experience in handling surges of import and export cargo.”
Virginia Business Editor Richard Foster contributed to this story.
Editor’s note: An earlier version of this article listed an incorrect summary of cargo diverted to the Port of Virginia and an incorrect estimate for the replacement cost of the Key Bridge. The story has been corrected and updated.
The Washington Wizards and Capitals NBA and NHL teams are staying put in the District of Columbia and will not be moving to Alexandria, according to announcements from Washington, D.C., and Virginia officials Wednesday. These events put the final nail in the coffin of a controversial $2 billion Alexandria arena proposal touted by Virginia Gov. Glenn Youngkin.
“We’re going to be together for a long time,” Washington, D.C., Mayor Muriel Bowser said at a news conference Wednesday evening, joined by Monumental Sports & Entertainment CEO Ted Leonsis.
Bowser said that she and Leonsis had just signed an agreement to keep the teams in Washington through 2050, in exchange for D.C.’s pledge to pay $515 million over the next three years to upgrade and modernize Capital One Arena in downtown D.C.
According to Leonsis, he and Bowser continued discussions regularly after his and Youngkin‘s December 2023 announcement of the proposal to create a $2 billion arena and entertainment district in Alexandria — a nonbinding deal that was opposed by some Virginia Democratic lawmakers and Alexandria residents.
Youngkin, whose efforts to build the arena were blocked by Virginia State Senate Democrats during the General Assembly session, said in a statement Wednesday afternoon that “personal and political agendas drove away a deal with no upfront general fund money and no tax increases, that [would have] created tens of thousands of new jobs and billions in revenue for Virginia.”
He also referred to the possibility of 30,000 new jobs and $12 billion in economic activity that the deal could have brought to the state, which “just went up in smoke,” according to the statement.
“This should have been our deal and our opportunity,” the governor continued. “All the General Assembly had to do was say, ‘Thank you, Monumental, for wanting to come to Virginia and create $12 billion of economic investment. Let’s work it out.'”
The proposed sports arena and entertainment district faced significant pushback from state Sen. Louise Lucas, the powerful chair of the Senate Finance & Appropriations Committee, who prevented the Virginia State Senate from voting on a measure to create a state authority that would control the project’s approximate $1.3 billion in public funding.
Answering a reporter’s question about what had happened with the Virginia negotiations and opposition among state lawmakers, Leonsis didn’t speak specifically about the state Senate’s roadblocks or any other missteps among state officials.
But D.C. officials “did everything right from December on. And when I looked at the other side of the board,” Leonsis said, referring to Virginia, “some of them weren’t scoring as high, and they weren’t together.
“We are an incredibly valuable company,” he added. “Forbes just said we’re worth $6 billion. That would make us one of the 10 most valuable companies in Virginia, one of the 10 most valuable companies in Washington, D.C., [and] we should be treated with that kind of respect. The city [of Washington] treated us that way. And that really was what the game changer for us.”
Leonsis said at the news conference that he would talk about Virginia at a later time, but he complimented Youngkin as “a good man,” who was aware of his ongoing negotiations with Bowser.
At the news conference, held Wednesday evening at Capital One Arena, Leonsis said that in recent months, he and Bowser met nearly weekly on the “main couch in the lobby at the Waldorf, and I would jump up and run to the bar and get some drinks, and we would talk about what’s the vision for the city.”
The option of more space
Another key factor in D.C.’s negotiations with Monumental was the recent closure of a shopping mall near the current arena. Washington, D.C., officials and the mall’s owner offered to let Monumental expand into about 200,000 square feet of that space, Leonsis said. The 12 acres on the Potomac River, where the arena would have been part of 9 million square feet of new multiuse buildings, was part of that proposal’s appeal, he added.
Lucas opposed the amount of public spending on the arena — saying that schools and toll relief should be higher priorities for the state — and tweeted Wednesday afternoon, “As Monumental announces today they are staying in Washington, D.C., we are celebrating in Virginia that we avoided the Monumental Disaster! Thank you to everyone who stood with us in this fight!”
Other Virginia Democrats took Lucas’ side in the battle, and some were put off by the governor’s apparent lack of interest in compromising on their party’s priorities, including a $15/hour minimum wage starting in 2026 and setting up a recreational cannabis retail structure in the state.
Matt Kelly, CEO of Bethesda, Maryland-based developer JBG Smith, which would have developed the entertainment district, released a statement Wednesday, blaming the project’s failure on “partisan politics and, most troubling, the influence of special interests and potential pay-to-play influences within the Virginia legislature.
“The scheming and special interests that plagued this opportunity in the Virginia legislature will no doubt cause future employers and the next Monumental to question whether their opportunity will get a fair hearing,” Kelly’s statement continued.
“This opportunity also brought with it the potential to add tens of thousands of jobs and needed housing units, including 1,000 units of affordable housing preservation in Alexandria which we had pledged as part of the arena proposal. Traffic and transportation investments, including possible Metro funding, are also likely gone. Instead, the existing surface-parked, single-story shopping center on the site will remain through the remaining 20-year term of the Target lease, and development on the remaining land will likely be far less dense. To say we are disappointed is an understatement; we are disgusted with the backroom-dealing and opaque scheming that took place as this played out.”
Last week, JBG Smith pledged to double the number of preserved workforce-priced affordable residential units near the complex from 500 residences to 1,000, an attempt to save the deal, and previously, the governor put forward a $322 million Hampton Roads toll relief proposal, a priority for Lucas.
In February, George Mason University’s Center for Regional Analysis found in a study requested by JBG Smith Properties that the project would include the construction of 5,405 workforce-affordable housing units, more than twice the 2,250 affordable housing units the City of Alexandria aims to have by 2030.
The Democratic-controlled House of Delegates passed the authority legislation in a bipartisan vote during the General Assembly’s regular session, but the bill faced a roadblock in the Senate. Some Alexandria residents also opposed the project over costs, traffic and infrastructure stress.
Ted Leonsis, founder, CEO and chairman of Monumental Sports & Entertainment, owner of the Washington Capitals and Washington Wizards, speaks at a Dec. 13, 2023, news conference in Alexandria announcing a plan to invest $2 billion in a new arena and accompanying entertainment complex in Potomac Yard. Virginia Gov. Glenn Youngkin is at left. Photo by Will Schermerhorn
Big numbers touted
In December 2023, Youngkin and Leonsis, with Mayor Wilson on hand, announced the 9 million-square-foot entertainment campus project as close to a done deal, saying it could create up to 30,000 jobs for Virginia over several decades. With a 2025 groundbreaking, the arena was expected to be completed by 2028 on an accelerated construction schedule, and an economic and fiscal impact report conducted for the city anticipated up to $7.96 billion in annual economic output for the state if the arena was open by 2028.
However, in March, The Washington Post reported that a separate economic analysis commissioned by the Youngkin administration and not released publicly had assumed fans would pay $75 for parking and that a new luxury hotel would book rooms at $731 a night, with the state using parking fees, ticket taxes and other revenue in order to pay off $1.5 billion in debt.
Earlier this month, Bowser said the District’s offer to fast-track a $500 million deal to update the teams’ current arena and keep them in Washington, D.C., was still on the table, after Virginia legislators omitted the authority wording from their budget amendments — a decision Youngkin called a “colossal mistake.”
“As stewards of the city’s economic health and development, city leaders believed the Potomac Yard entertainment district opportunity was worthy of community discussion and [city council] consideration,” Wilson said in a statement Wednesday. “We negotiated a framework for this opportunity in good faith and participated in the process in Richmond in a way that preserved our integrity. We trusted this process and are disappointed in what occurred between the governor and General Assembly.”
The 2024-26 state budget negotiations between state lawmakers and Youngkin remained the final avenue to create the state authority by including it in the finalized budget in April, but Wednesday’s events closed the door entirely on the proposed arena move.
Strasburg-based First National has entered into a definitive merger agreement to acquire Prince George-based Touchstone Bankshares in an all-stock transaction worth approximately $47 million, First National announced Tuesday.
The parent companies’ merger combines community banks First Bank and Touchstone Bank to create a bank with expected total assets of about $2.1 billion, $1.5 billion in loans and $1.8 billion in deposits. The resulting company is expected to be the ninth largest Virginia community bank by deposits.
The combined company will have 30 branch offices across Virginia and two branches in North Carolina.
“We are thrilled to have found a partner with an equally long history of serving and supporting local customers and businesses in their communities,” First National President and CEO Scott Harvard said in a statement. “Combining our companies will help ensure that we continue to be part of the fabric of the communities we serve. … We are incredibly excited about this opportunity to expand our Richmond metro presence with the addition of seven branches in the market, and we look forward to welcoming the entire Touchstone team into the First Bank family.”
In the metro Richmond area, where it’s expected to have eight branches, the combined company’s deposits are expected to exceed $350 million.
According to the terms of the agreement, Touchstone shareholders will receive 0.8122 shares of First National stock for each share of Touchstone stock. Based on First National’s closing stock price of $17.55 on March 22, the deal’s approximate aggregate value is $47 million, or $14.25 per share of Touchstone stock.
“First National is a like-minded partner that shares our culture of supporting our communities by focusing on building meaningful relationships and personalized service to their customers,” Touchstone President and CEO James Black said in a statement. “We are enthusiastic about the opportunity to partner with First National in a transaction that we believe offers significant opportunities to our clients, communities, employees and shareholders.”
The companies’ boards of directors have unanimously approved the merger agreement. The transaction is expected to close in the fourth quarter, subject to shareholder and regulatory approvals.
First National and First Bank will appoint three Touchstone directors to join the existing nine directors on each board. Black will join First Bank as an executive vice president and south region president.
Founded in 1906 as Bank of Dinwiddie, Touchstone currently has 12 branches across the metro Richmond area, south Central Virginia and northern North Carolina. As of Dec. 31, 2023, Touchstone reported total assets of $658.7 million, gross loans of $508.8 million and total deposits of $542.2 million.
First National is the holding company of First Bank, which opened in 1907. The company has 20 bank branches throughout the Shenandoah Valley, Central Virginia and the Roanoke Valley, as well as a customer service center in a retirement community and a loan production office. First Bank also operates First Bank Wealth Management and owns First Bank Financial Services, which invests in investment service and title insurance providers.
RICHMOND — Virginia’s plan for a recreational cannabis market includes a way to help micro businesses, formerly known as the social equity license, get involved with what is anticipated to be a multimillion dollar business — if the plan survives the governor’s desk.
An applicant must meet certain criteria to qualify, including having at least 66% ownership and direct control of the business.
The applicant must either have been convicted or adjudicated of a prior misdemeanor violation for marijuana to qualify.
The applicant could also qualify if they lived at least three of the past five years, or attended at least five years of public school, in a historically economically disadvantaged community.
Another qualification would be if the applicant received a federal Pell Grant or attended for at least two years a college or university where an average of at least 30% of the students are eligible for a federal Pell Grant.
Any veteran of the U.S. armed forces would qualify if they met the 66% ownership and direct control qualification.
The Virginia Cannabis Control Authority board of directors will regulate the application process. The board will also determine what percentage of license fees can be waived and promote participation in the loan program despite the ability to pay such fees, according to the bill.
Either the director of the Office of Diversity, Equity, and Inclusion, or a majority of the members of the Cannabis Equity Reinvestment Board, will sign off on the disbursement of funds.
The General Assembly approved $1.8 million each year, which will transfer to the Cannabis Equity Business Loan Fund in July, if the governor does not appoint a director of the Office of Diversity, Equity, and Inclusion, according to the budget. The governor renamed it the Office of Diversity, Opportunity, and Inclusion in 2022.
“The program will be funded by 100% of the licensing fees collected by the authority in the first year,” Krizek said in a Senate committee meeting for Rehabilitation and Social Services. “After that time, the program will be supported by 60% of the tax revenue from retail sales of marijuana.”
The equity fund will foster business ownership and economic growth within communities that have been affected by the prohibition of cannabis.
“The marijuana market bills are the most promising that we’ve had since 2021,” said Chelsea Higgs Wise, executive director of Marijuana Justice. “It includes the equity portions and includes repair for communities and includes certain funds and this is what we’ve been promising Virginia.”
The loan fund was created by the 2021 General Assembly and given $3 million to help develop an adult-use retail market, the CCA stated in an email. The 2023 General Assembly returned the $3 million back to the general fund, since the recreational cannabis market was not reenacted.
“We have an equity fund already established in statute,” said Sen. Barbara Favola, D-Arlington, at the committee of Rehabilitation and Social Services. “But it needs to be funded to make sure that our micro business really do have access to capital so they can start their cultivation and be able to get to the market.”
The CCA will collaborate with a community development financial institution that provides credit and financial services for disadvantaged communities to help manage the fund.
“We’re really hoping that it will be people of color, folks from certain communities that will be able to take advantage of entering the business and the setups that we’ve put into place,” Higgs Wise said.
Cannabis tax will be 8% and the revenue is estimated to be $6.41 million in 2025 and increase to $77.1 million by 2030, according to the bill’s final fiscal impact statement.
The state will add a 1.115% tax, and a locality can add an extra tax up to 2.5%.
The CCA stated that it could not respond to questions about potential licensing costs, because no adult-use cannabis market exists. Applications would start in September if the bill is signed.
The current application fee for a medical cannabis pharmaceutical processor permit is $18,000. The initial permit fee is $165,000 and the annual renewal fee is $132,000, according to the CCA.
Gov. Glenn Youngkin has stated many times that he’s not interested in signing the adult-use market legislation. He has issued 80 vetoes as of March 26, although some are duplicate bills. When asked about the cannabis bill on March 14, Youngkin told a Virginia Mercury reporter that he would read it and that it is a long bill.
Youngkin has until April 8 to take action on all bills that cleared the General Assembly. The legislature will reconvene on April 17 to review his changes, but Democrats do not have the super majority needed to overturn a veto.
Capital News Service is a program of Virginia Commonwealth University’s Robertson School of Media and Culture. Students in the program provide state government coverage for a variety of media outlets in Virginia.
The Aerospace Corp., a nonprofit government contractor that bills itself as running the nation’s only federally funded research and development center “committed to the space enterprise,” officially relocated its headquarters from El Segundo, California, to Chantilly on Thursday.
The organization, which provides technical expertise in space-related science and engineering, has no plans for “significant relocation” of its more than 4,600 current employees, according to a news release, and the 2,800 employees currently in El Segundo will remain there.
According to an Aerospace spokesperson, the company has more than 750 employees based in Chantilly plus 1,000 employees based in various locations in the Washington, D.C. area.
“By shifting our headquarters to the Washington, D.C., metro region, we will deepen our ties with key decision makers and stakeholders, and reaffirm our commitment to working side-by-side with our partners as they carry out our nation’s critical missions,” Steve Isakowitz, Aerospace’s president and CEO, said in a statement.
As the space industry has changed in recent years — including growth in U.S. government and commercial space investment, the establishment of the U.S. Space Force in 2019 and the reinstatement of the U.S. Space Command, which is responsible for preparing military operations in space — Aerospace’s technical support has shifted “from traditional functions to emerging needs,” according to a news release.
“Aerospace has taken a leading position navigating through this change as we accelerate our efforts to outpace the threats we face in space,” Isakowitz said.
Aerospace provides technical solutions for space mission needs and research and strategic analysis on national policy related to space, and it tests, analyzes and troubleshoots rocket and satellite systems. The organization’s customers include the U.S. Department of Defense, the intelligence community, NASA and other civil agencies.
Aerospace is investing $100 million in its engineering, research and laboratory capabilities at its main engineering and technology campus in El Segundo. The company also has major locations in Albuquerque, New Mexico, and Colorado Springs, Colorado.
Editor’s note: An earlier version of this article listed an incorrect number of employees working for Aerospace in California. This story has been updated with the correct number.
Editor’s note: This story has been updated with information about Aerospace’s Virginia and Washington, D.C., workforce.
After a container ship struck the Francis Scott Key Bridge in Baltimore early Tuesday, causing the bridge to collapse and possibly claiming multiple lives, ships bound for the Port of Baltimore will be diverted to other ports, primarily the Port of Virginia and the Port of New York and New Jersey.
The Virginia Port Authority, which oversees the Port of Virginia, issued a statement Tuesday morning, saying that the container vessel that hit the Key Bridge at approximately 1:30 a.m. Tuesday, called at Virginia International Gateway’s terminal and left March 22 for Baltimore, its next scheduled port of call.
“Our operating team is already working with ocean carriers whose vessels were due to call Baltimore and offering the capability of our port to discharge cargoes as requested,” Port of Virginia spokesman Joe Harris said in a statement. “The Port of Virginia has a significant amount of experience in handling surges of import and exportcargo and is ready to provide whatever assistance we can to the team at the Port of Baltimore.”
Danish shipping company Maersk confirmed in an email that it chartered the Dali container vessel — owned by Grace Ocean and operated by Synergy Group — that collided with the Key Bridge. As of 10 a.m. Tuesday, six people who were repairing the bridge at the time of the collision were unaccounted for, according to The Washington Post.
Maryland Gov. Wes Moore said the ship lost power and issued a mayday call shortly before crashing into the bridge, which immediately fell, the Post reported. The ship was traveling at eight knots at the time of the collision, Moore told reporters.
According to an email Tuesday from Rachel Shames, vice president of pricing and procurement for CV International, a Norfolk-based international logistics and transportation company, the collision is expected to create a temporary increase in cargo volume at other East Coast ports, including Norfolk’s terminals.
“The full impacts of this disaster are not yet known, but it’s likely that nearby East Coast ports, including Norfolk, Philadelphia, New York and others will absorb cargo traffic from Baltimore in the short term,” she wrote. “This sudden increase in volume may strain operations at other ports.”
All vessel traffic in and out of Baltimore’s port has been suspended until further notice, Maryland’s transportation secretary announced Tuesday morning, though the port is still open and trucks are being processed within marine terminals.
Maersk sent its customers an email notifying them of the collision and said that due to the bridge collapse, ships will not be able to reach the Baltimore port “for the time being. In line with this, we are omitting Baltimore on all our services for the foreseeable future, until it is deemed safe for passage through this area. For cargo already on water, we … will discharge cargo set for Baltimore in nearby ports. … Delays may occur, as they will need to discharge in other ports.”
“I think there is definitely a concern that we will see some congestion on the East Coast now, because other ports are having to absorb traffic,” Shames said later in an interview with Virginia Business.
She said that the impact of the port’s temporary closing “could end up rippling down to Wilmington, [North Carolina], Charleston [South Carolina] and Savannah, [Georgia],” although, she noted, “Norfolk is probably the most practical place to absorb most of the capacity. You want to keep the cargo that was supposed to go to Baltimore…as close as possible to Baltimore.”
Shames also noted that Baltimore’s port is the top U.S. port for the import and export of automobiles, light trucks, wheeled farm vehicles and construction machinery, which often move on specialized vessels and not in containers.
The Port of Virginia’s Newport News Marine Terminal has facilities that accommodate vehicles, including ramps that allow workers to load and unload rail cars and ships, but not on Baltimore’s scale, Shames said. “There is capacity at [Newport News Marine Terminal] … but not a lot, nothing like what Baltimore can do. It will not be as simple as just shifting. Unfortunately, I think we are going to be looking at congestion, and I just don’t know how long. That can mean delays for cargo [and] probably extra costs. It’s a ripple, a domino effect.”
Wider channels
Earlier this month, widening of the Port of Virginia’s shipping channel was completed, allowing two ultra-large container vessels to pass at the same time. The shipping channels are now up to 1,400 feet wide in some areas, although the completed deepening of the commercial shipping channel and the Norfolk Harbor to 55 feet and the ocean approach, set to be 59 feet deep, has been delayed until fall 2025, the port announced.
David H. Sump, a Norfolk-based maritime attorney with Willcox Savage and a former Coast Guard officer, says it’s too soon to tell what exactly happened to the ship in Baltimore, but after he watched a video of the collision, he noted, “This vessel appeared to lose power. It appeared to go dark for about a minute,” shortly before crashing into the bridge. If there were a power outage on the ship, “you don’t have control of the vessel during that time. It’s floating. The momentum of the vessel was proceeding, [and] there may not have been anything the pilots could have done.”
The Dali, with 22 crew members on board, had made its scheduled import deliveries to U.S. ports and was likely heading back to Asia when the collision occurred. No Maersk crew and personnel were on board the vessel, according to an email from Maersk to customers.
Sump and fellow maritime attorney Deborah Waters of the Norfolk-based Waters Law Firm note that large container ships in Maryland and Virginia are required to have local ship pilots on board when the vessels are moving in and out of rivers, bays or harbors — basically guiding them safely past structures such as bridges or other ships. “Pilots are the expert navigators of the local waters,” Sump said.
Local pilots often require five years of training in Virginia to be licensed to navigate vessels in tighter quarters. Sump acknowledges that ultra-large container vessels stopping at the Port of Virginia’s major terminals — the Norfolk International Terminals and Virginia International Gateway — do not go near or through bridges like the Key Bridge in Baltimore, although ships moving up the James River to the Richmond Maritime Terminal would encounter bridges.
Frank Rabena, vice president of the Virginia Pilot Association, told Virginia Business that this improvement and the port’s other recent infrastructure changes allow the port to assist in a situation like this. “The Port of Virginia is already prepared,” he said. “We are already in that position to handle pretty much any ship that comes our way.”
In terms of local impact, Rabena said, it’s too soon to tell what will happen.
“We’re not sure how shipping companies would reroute cargo,” he said. “That will unfold in the next couple of days.”
In 2022, the Port of Virginia processed more than 3.7 million 20-foot-equivalent units at its terminals, and cargo tonnage was up 11% from 2021. For fiscal 2022, the port generated $124.1 billion in output sales, $41.4 billion in Virginia labor income and $5.8 billion in state and local taxes and fees.
David White, executive director of the Virginia Maritime Association, said he’s already had some members reach out to offer assistance, but it’s going to take a little while to understand how the industry can best help. “It’s going to be a prolonged incident,” he told Virginia Business.
“Right now, it’s just so early, everyone’s minds are focused on the search and rescue,” he added. “We stand by as needs are identified to facilitate the capabilities our member companies have. … It’s just still too early, but we are ready, as those needs are identified, to reach out to our members [and] to get information to our members, so they know how they can … support our maritime friends in Baltimore.”
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