Virginia General Assembly Advances Cannabis Retail Framework

After years of clearing the General Assembly only to meet a veto, legislation to create a legal, adult-use cannabis market in Virginia passed both chambers Tuesday — this time with a governor ready to sign it and retail sales poised to begin as early as November.

Products in a display counter at the Cannabis Outlet in Portsmouth advertise high THC concentrations. (Photo by Ned Oliver/Virginia Mercury)

The votes mark the clearest signal yet that Virginia is poised to move from legal possession without legal sales to a fully regulated marketplace, a transition that has eluded the commonwealth since 2021, when lawmakers first legalized simple possession.

Tuesday morning, the House passed House Bill 642, sponsored by Del. Paul Krizek, D-Fairfax, by a 65-32 vote. Hours later, the Senate approved Senate Bill 542, introduced by Sen. Lashrecse Aird, D-Petersburg, by a narrow 21-19 margin after an initial failed vote.

Similar proposals have cleared the General Assembly in recent years — often with bipartisan backing — but were repeatedly vetoed by former Gov. Glenn Youngkin. This year, the political calculus has shifted. Democratic Gov. Abigail Spanberger has vowed to sign legislation establishing a regulated retail market.

Under Krizek’s bill, the Virginia Cannabis Control Authority would administer the retail system, with no retail sales allowed prior to Nov. 1, 2026.

“It’s about fixing a status quo that is not working,” he said, noting that while adult possession of cannabis is legal, retail sales remain unregulated.

Right now, he said, the absence of a legal marketplace means “no testing, no standards and no oversight whatsoever.”

The bill, he added, would replace what he described as a $5 billion illegal market with a regulated system designed to protect public health. He pointed to requirements for testing, labeling, and packaging, as well as enforcement mechanisms and penalties intended to keep products away from minors.

Krizek said the legislation takes a phased approach to give the Cannabis Control Authority time to implement the framework responsibly. It also preserves local control, granting localities full zoning authority over where and how retail stores operate.

He added that the proposal creates opportunities for small businesses and communities disproportionately harmed by past enforcement and called it “a measured, responsible step forward.”

Legal to possess, illegal to sell

Virginia first decriminalized marijuana in 2020 before lawmakers legalized simple possession.

But they failed to finalize a retail framework before Republicans regained the governor’s mansion, leaving cannabis in legal limbo — legal to possess, illegal to sell.

Over the past year, a joint legislative commission has worked to craft a new roadmap, hearing testimony from regulators, industry experts, and advocates about safety, access, and equity concerns.

Over the past year, the joint legislative commission held a series of hearings and work sessions to refine the framework, beginning with presentations in August on potential rollout models, followed by October discussions weighing safety, access, and equity concerns.

By November, members were reviewing a draft retail blueprint, and in December, they unveiled revisions aimed at setting the stage for a 2026 launch.

The Senate version, sponsored by Aird, largely mirrors the House proposal but sets a later retail start date of Jan. 1, 2027.

The measure initially failed Tuesday afternoon after Sen. Adam Ebbin, D-Alexandria, recused himself because he is about to assume a role at the Cannabis Control Authority. Moments later, Ebbin asked for reconsideration, stating he has “no financial interest” in an adult-use cannabis marketplace. On the second vote, the bill passed 21-19.

The substitute measure adopted this week, Aird said, incorporates many elements lawmakers have seen before but also introduces new approaches — starting with governance.

“This new legislation takes on the approach where the Cannabis Control Authority will manage the license and regulatory portions while the marketplace is immediately being stood up,” Aird said.

Taxes, caps, and rollout timeline

The measure establishes a state tax rate of 12.875% on retail cannabis sales, along with an additional 3% local option tax. Permit applications would begin in July 2026, and seed-to-sale tracking would start Sept. 1, 2026, ahead of a Jan. 1, 2027, retail launch.

“The transaction limit for retail purchases will remain at 2.5 ounces, which has always been throughout this process,” Aird said.

The legislation outlines standards for a lottery process for impact licensees and creates a tiered cultivation licensing structure based on canopy size, ranging from tiers one through five, with the largest capped at 35,000 square feet.

A maximum of 350 retail licenses would be issued statewide. Cultivation facilities would be capped at 450 through 2028. At-home cultivation would continue to be permitted, allowing up to four plants per household, provided each plant is tagged with the grower’s name and identification.

Local governments would no longer be able to ban cannabis retail through referenda.

The bill also sets THC limits for non-pharmaceutical products at 10 milligrams per serving and 100 milligrams per package. Aird said it includes robust criminal provisions aimed at cracking down on illicit sales and the illegal marketplace.

“There are a lot of details in this legislation,” she said.

If signed by Spanberger, the measures would mark the final step in a years-long effort to bring structure and oversight to a market that has operated without a legal retail framework.

Aird emphasized Tuesday that many lawmakers contributed to shaping the legislation — a proposal she said reflects extensive collaboration across chambers.

“There are many in this chamber that have helped shape this legislation,” she said.

by Markus Schmidt, Virginia Mercury

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