Cannabis retail market could open next year

*Four Green Fields, a cannabis store in Harford County, Md. Maryland created a retail market for recreational marijuana in 2023. [Four Green Fields]*

A cannabis retail market in Virginia is a little closer to reality. At a Dec. 2 hearing convened by the Joint Commission to Oversee the Transition of the Commonwealth into a Cannabis Retail Market, members of the General Assembly reviewed the latest changes to legislation that has been under consideration for years.

The General Assembly approved legislation to establish a retail market for cannabis last year, but the bill was vetoed by Gov. Glenn Youngkin. With Abigail Spanberger in the governor’s mansion, the measure is expected to have a better chance of being enacted.

Sales could start next November

Commission chair Del. Paul Krizek (D-Fairfax) said the goal is to open the license application process by July 1 and begin retail sales on Nov. 1, 2026.

The provisions of the draft bill discussed at the meeting “are simply recommendations that will be worked through the legislative process,” said Vice Chair Sen. Lashrecse Aird (D-Petersburg). The General Assembly will hold hearings and likely make changes and add amendments.

“This bill builds a market that supports hundreds of new businesses, strengthens Virginia agriculture, reduces the racial disparities created by the prohibition of marijuana, and most importantly, protects public safety and health,” Krizek said.

A regulated retail market will be safer than the illicit market because it includes product testing, accurate labeling, consumer education, and age-verified purchases, Krizek said.

“Equity is not an afterthought, though,” he said. The bill will give priority for licenses to cultivate and sell marijuana to “impact applicants” using race-neutral criteria.

The Cannabis Control Authority, which oversees medical cannabis sales, will regulate recreational cannabis licensing, auditing, enforcement, and public education.

The licensing framework “prioritizes small businesses and prevents market dominance by a few large companies,” he said. “There’s going to be a lot of transparency and a lot of information on their website about how to go through the licensing process.”

The draft would set a maximum of 350 retail licenses and a maximum of 10 largest-tier cultivation facilities.

It would also create a new direct-to-consumer license capped at 100 to allow small cultivators early access to the market through on-site sales and delivery during the first two years. That will enable licensees to invest and segue into a retail operation, Krizek said.

The bill would prohibit an individual from owning or having an interest in more than five licenses.

Tax revenue

The cannabis market is expected to generate more than $400 million in state revenue over the next five years.

A portion of those funds would go to the Cannabis Equity Reinvestment Fund for communities disproportionately targeted by drug enforcement, scholarships for historically marginalized residents, workforce development, and the Virginia Cannabis Equity Business Loan Fund for equity licensees.

Taxes are set at 12.75 percent with 1 percent going to localities. Localities will have the option to set a sales tax of up to 3.5 percent for cannabis products. Localities determine how to use that revenue and would retain control over zoning in determining where to approve a site for a cannabis store.

The industry is projected to create tens of thousands of stable jobs across multiple sectors with fair wages and worker protection, Krizek said.

One of the biggest changes from the bill approved last year is that localities won’t be allowed to opt out. “By allowing opting out, we would be allowing opt-in to the illicit market. There will be no ‘dry’ counties,” he said.

Another big change addresses the criteria for seeking an “impact license.” Applicants would have to meet a certain number of factors, which could include having had a felony marijuana conviction anywhere, not just in Virginia; living in a community disproportionately policed for marijuana crimes; and having been identified as a “distressed farmer” in the last five years.

There would also be a micro-business license for cultivating, processing, selling, and delivering marijuana products to consumers.

New requirements

Taylor Mey, an attorney with Virginia’s Legislative Services Division, outlined additional changes from last year’s bill:

The minimum distance between retail stores would be expanded from 1,000 feet to one mile.

A store couldn’t be located within 1,000 feet of a place of worship, hospital, school, playground, daycare center, substance abuse treatment facility, or government building.

The Cannabis Control Authority would be required to publish a public registry listing financial information of all licensees, conduct an annual financial audit, investigate the ownership of all licensees, issue regulations to prevent undue market concentration, and provide education to consumers on the health risks of cannabis.

A new license would be established for operating a marijuana nursery cultivation facility, and another new license would be for marijuana delivery with requirements for age verification and security.