This comment supplements the September 8, 2026 Town Hall filing by GreenhouseRVA. It is limited to a single structural defect in the draft: the Department has written statewide standards, including a medical-cannabis pathway, and then made those standards unenforceable by placing a private association of competing operators in front of the certification door, with no duty that the association follow the Department’s rules.

VARR has denied GreenhouseRVA accreditation twice. The stated and practical basis has been our medical-cannabis policy. Our application was under review for over a year.   The second denial issued two days before the July 1, 2026 cannabis prohibition mandate — the effective date of the 2026 legislation that VARR had participated in shaping, while they continued to sit on our application   

That veto does not stay on paper. Probation and court officers will not allow a supervisee to live in housing that is not on the Department’s certified list. They will, however, allow the same person to stay in a homeless shelter, a hotel, a motel, or a  room in a neighborhood where illicit drugs and street crime are the ordinary background noise of the day.  The state  will not authorize a structured house with curfews, chores, testing, and a written medical-cannabis protocol. It will accept a shelter bunk, a weekly-rate motel, or an address that offers none of those protections. That is not a public-safety policy. It is a paperwork policy with human consequences the Department can measure in rearrests, overdoses, and people sleeping outside.

 A private nonprofit of competing operators should not hold that switch. VARR does not supervise probationers. It does not run the local jail. It does not fund shelter beds. Under this draft it nevertheless decides whether a community recovery residence may receive the referrals that keep people housed. 

Homelessness in this region is not falling. What Virginia needs is more community-scale wellness and recovery housing — including homes that follow every standard in this chapter and elect the medical pathway the Board itself wrote — not a bottleneck that turns an association’s recovery philosophy into a sentence of unsheltered living. 

VARR’s criteria does not treat Virginia medical-cannabis certification as a lawful pathway. The draft now writes that pathway into Chapter 260 and then leaves VARR free to ignore it.

What the draft gets right — and why it does not survive contact with § 20.A

Proposed 12VAC35-260-170 is the first honest recognition, in this chapter, that Virginia already has a medical-cannabis program. It correctly gives an operator two choices: a total prohibition, or a recreational prohibition paired with protocols for residents who hold valid certifications. 

Section 170 is then cancelled by 12VAC35-260-20.A. That section still requires every home, for each location, to. “meet the qualifications, policies, and practices of a credentialing entity and hold a credential, accreditation, or charter from the Virginia Association of Recovery Residences or Oxford House, Inc.” before the Department will certify it. Nothing in the draft requires those “qualifications, policies, and practices” to conform to this chapter. 

Nothing requires the association to grant, deny, or even docket an application that uses the option the Board itself wrote. The Department can put a protection in the regulation. The association can keep a contrary policy, decline to schedule, let the file time out, and never have to argue the point. The home is never certified.

Courts and state agencies may not refer there. The protection is gone. That is not a drafting slip. It is the design of the current text. A private nonprofit of market participants is permitted to pick which state rules it will honor. The rest of the chapter becomes advisory.

The General Assembly already answered this question

Chapter 1000 of the 2026 Acts of Assembly (SB 270 / HB 931) did not deputize a trade association to write the real code. It charged the Board and the Department with three duties that this draft repeats in name and abandons in mechanism.

First. The Department “shall monitor credentialing agencies providing credentials to recovery residences to ensure criteria related to certification comply with regulations.” A monitoring duty with no filing requirement, no conformity standard, no timeline for application review, and no consequence is not oversight.  

Proposed 12VAC35-260-30.B restates the duty and then supplies nothing with which to carry it out. The draft does not even require a credentialing entity to file the criteria it enforces.

Second. Subsection I of the 2026 Act directs the Department to “promulgate regulations to establish a process for operators of recovery residences to apply for certification independently or in conjunction with a credentialing entity.” The draft’s independent path is not independent. Section 20.A still makes a VARR or Oxford House credential a precondition. 

Section 50.B.2 offers “evidence of accreditation” in lieu of a complete state application. Conditional certification under §§ 20.D and 60 exists only for an applicant that has “indicated an intent to receive accreditation by or membership in a credentialing entity,” and it expires in nine months. If the association does not act, the clock runs out and the home is treated as noncompliant. That is a pocket veto. It is the opposite of the process the statute required.

Third. The Act forbids a credentialing agency from credentialing a residence owned or operated by a person employed by, or in a position of authority at, that agency, or by an immediate family member of such a person.

The draft does not implement that prohibition. An association composed of operators deciding which competing operators may enter the market is the fact pattern that prohibition was written to police. Supervision of that association is not optional. It is what makes the structure lawful.

An agency cannot hand off power the General Assembly assigned to it. DBHDS was charged with certifying recovery residences. It cannot make that decision contingent on the approval of a private group and then decline to supervise how that group decides. Rules that bind the public must go through rulemaking. This comment period exists because Virginia law requires it. The association’s internal policies — which, under this draft, still decide who operates and who does not — went through none of it.

The private-delegation problem is not a policy disagreement. It is a legal one.

Courts have been clear for nearly a century that delegating governmental power to private parties with a stake in the outcome is the most objectionable form delegation can take, and that a licensing arrangement controlled by market participants survives only if the State actively supervises what those participants decide.

In Carter v. Carter Coal Co., 298 U.S. 238 (1936), the Supreme Court described delegation to interested privateparties as the most obnoxious form it can take, because the power runs not to a presumptively disinterested official but to private persons whose interests are adverse to others in the same business

In Gibson v. Berryhill, 411 U.S. 564 (1973), the Court held that a licensing body of practitioners with a financial stake in the outcome could not sit in judgment of its competitors.

 In North Carolina State Board of Dental Examiners v. FTC, 574 U.S.494 (2015), the Court held that a body controlled by active market participants forfeits state-action antitrust protection unless the State actively supervises the decisions. 

And in FCC v. Consumers’ Research, 606 U.S. ___(2025), the Court restated the boundary that saves such arrangements: a private entity may advise; the agency must retain the decision. 

The purpose running through that line is the same. A State may set standards and may use private expertise to apply them. What it may not do is make a private competitor’s approval the thing that decides who operates, and then walk away from the decision. That is exactly what proposed § 20.A does, and it is exactly what proposed §170 cannot survive.

This is not an attack on abstinence-based housing. Oxford House and abstinence-only VARR homes serve people who need that model. GreenhouseRVA does not ask those homes to change. It asks that a home which follows every standard in this chapter, including the medical pathway the Board itself drafted, not be barred from the State’s list because a private association prefers a different recovery philosophy. Recovery is not a single product. The statute did not authorize one association to treat it as one. 

Requested revisions to the final draft

Please fix the following in the text that proceeds to the Board’s three-stage action. Variance practice under proposed § 100 is not a substitute. A variance that “keeps option 2, but VARR still decides” is the current draft by another name.

Conformity. Add an express provision: no credentialing entity may deny, refuse to docket, delay,withdraw, or time out a credential on a basis this chapter permits or this chapter does not authorize as a ground for denial. A written policy of a credentialing entity that conflicts with 12VAC35-260-170, or that treats lawful use under § 4.1-1600 et seq. as an illicit-drug violation, is not a lawful basis for withholding a credential or for triggering proposed §§ 80.A.10 or 130.F.6 (“accreditation or chartering is permanently withdrawn”)

Independent certification. Implement subsection I of the 2026 Act in §§ 20 and 50. An operator may apply to DBHDS directly. Absence of a VARR or Oxford House credential is not an automatic denial if the residence meets this chapter, including § 170. If a credentialing entity denies a home on a basis the State does not allow, or issues no written decision on a complete file within 9 months, DBHDS shall review the home on the merits and, if the home meets this chapter, certify it.

Timelines and a ban on the pocket veto. Every credentialing entity shall, in writing and with a copy to DBHDS: confirm whether an application is complete within 9 months of receipt; and grant, deny, or issue a dated deficiency list within 30 days of a complete file. A denial or “file closed / timed out”determination must cite the specific standard applied. Inaction while a home holds conditional certification shall not be treated as withdrawn accreditation under §§ 80 or 130, and shall not exhaust the nine-month conditional-certification clock.

Publication and monitoring. Every credentialing entity shall file with DBHDS, and publish the criteria it actually enforces. DBHDS shall review those criteria for conformity with this chapter before relying on that entity’s credential as a substitute for state review. 

Proposed § 30.B should be rewritten so that “monitor credentialing entities for regulatory compliance” includes a documented review, a written finding, and a remedy when criteria conflict with this chapter.

Section 170 made operative. A residence that elects option 2 remains eligible for certification. The Board should specify minimum protocols: a valid Virginia written certification on file; secure storage; no sharing or diversion; inventory and monitoring; and written consequences, including discharge, for misuse. Cannabis products possessed and used in accordance with § 4.1-1600 et seq. and § 170 are not “illicit drugs” for purposes of § 180. A drug-screen result consistent with a documented, valid certification is not, standing alone, a house violation or a ground for denial under § 80.A.3 (“illegal act”).

Conflict of interest. Implement the statutory bar on a credentialing agency credentialing a residence owned or operated by, a persons employed by, or in a position of authority at, that agency(board members), or by an immediate family member of such a person. The same section should bar a credentialing entity from sitting on an application it has a financial or competitive interest in defeating.  

Questions I ask the Department to answer on the record

1. 2. 3. 4. What specific provision of this draft prevents a credentialing entity from denying a credential on a basis this chapter permits — including a § 170 option-2 medical-cannabis policy?

By what process will the Department review credentialing criteria it has never required be filed with it?

Which official determined that no conformity provision, no independent-certification path, and no decision deadline were necessary to implement Chapter 1000 of the 2026 Acts of Assembly, and on what analysis?

If a credentialing entity issues no written decision on a complete application within 9 months, what happens to the home under this draft other than the running of the conditional-certification clock?

Preservation, copies, and intended next steps

If the final regulation retains the private-approval precondition without conformity, timeline, appeal, and direct- certification provisions, I intend to petition the Board for reconsideration and to pursue judicial review of the regulation’s statutory authority and of the delegation of certification authority to a private entity composed of market participants. I ask that the Office of the Attorney General address the private-delegation question in its certification of statutory authority for this action.

I further request that the Department preserve all records relating to this action, including communications between DBHDS and any credentialing entity, workgroup materials, drafts, and any survey of operators concerning medical cannabis. A request under the Virginia Freedom of Information Act will follow.

I support certification, inspections, complaint rights, a ban on resident brokering, and a ban on forcing residents into clinical services from which a home profits. I do not support a chapter that writes a medical pathway onto the page and then lets a private association of competitors erase it in practice. Without the provisions requested above, the Department will have adopted standards it cannot enforce and will have left the decision of who may operate a recovery residence in Virginia with a body that answers to no one. That is not a state standard