After years of planning, proposals and vetoes, a retail cannabis market in Virginia now seems to be on the horizon.
On Tuesday, Gov. Abigail Spanberger spoke with State Sen. Lashrecse Aird, D-Petersburg, and State Del. Paul Krizek, D-Fairfax, about the compromise.
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“Today, I’m excited to stand alongside Senator Aird and Delegate Krizek to announce that we have agreed to a compromise proposal that will create a safe, legal, and well-regulated cannabis marketplace here in Virginia — with recreational sales beginning on July 1, 2027. We will do it in a way that protects consumers, targets the illicit market with clear enforcement and regulatory authority, and creates a more competitive market for small businesses and farmers.”
“This is what good governing and collaboration look like — bringing people together, listening to families and public safety leaders, and focusing on solutions that are practical, enforceable, and in the best interest of Virginians. In the end, we all wanted to deliver a marketplace that the Commonwealth could implement effectively for the long-term. I’m proud to stand alongside these dedicated legislators, and to be working alongside them to deliver a marketplace built to last.”
Governor Abigail Spanberger
The biggest change between previous proposals and this compromise is the date at which a legal market would begin and how the market is taxed.
Previous bills proposed legal sales could begin by Jan. 2027; the new proposals would see recreational sales start on July 1, 2027. Spanberger believes the extra time will allow the Cannabis Control Authority to “develop regulations, establish testing and safety standards, and build the necessary oversight framework to ensure the marketplace launches safely and responsibly.”
Sen. Aird’s bill also had a flat tax rate of 6% and allowed localities to have another tax rate between 1 and 3.5%. The new proposal continues the tax rates, but sees an increase in the state tax rate to 8% after July 1, 2029. The revenue generated will go to the following:
- early childcare and education
- K-12 education
- behavioral health programming for substance use disorder prevention and treatment programs
- public health programs
- The Cannabis Equity Reinvestment Fund
Lawmakers listed the following details on the proposed legislation:
- Creates a maximum of 350 retail cannabis establishment licenses — comparable to commercial markets in other states — and increases the possession limit from 1 ounce to 2 ounces. The CCA would begin accepting applications for licenses on February 1, 2027.
- Strengthens child safety protections — including prohibitions on cartoon advertisements, requirements for child-safe packaging, and prohibitions on products sold in the shape of animals, fruits, vehicles, or humans.
- Authorizes the CCA to create escalating penalties for failing to do ID checks — including license revocation for repeated underage sale and requirements that retail stores be no less than 1,000 feet from schools, hospitals, playgrounds, and drug treatment facilities.
- Strengthens oversight of industrial intoxicating hemp — which is currently regulated by the Virginia Department of Agriculture and Consumer Services — by transferring regulation to the CCA.
- Allows the CCA to maintain a public licensee registry, establish a tip line for members of the public to anonymously report concerns about illicit practices, investigate the ownership and control interests of licensees, and develop policies regarding the audit of ownership and financial relationships across licensees.
- Allocates the revenue of cannabis sales towards early childcare and education, K-12 education, behavioral health programming for substance use disorder prevention and treatment programs, public health programs, and the Cannabis Equity Reinvestment Fund.
- The fund — established in the 2021 legislation — supports scholarships, workforce development, small business growth, reentry services, and community-based initiatives designed to expand opportunity, strengthen economic mobility, and help address longstanding disparities in communities historically and disproportionately targeted and affected by over-policing.
- Establishes a 6 percent state tax rate on cannabis products to transition Virginia to a regulated market from the current illicit market. After July 1, 2029, the state tax will increase to 8 percent to generate additional revenue for education and public health programs. The bill further allows localities to adopt an additional 1-3.5 percent local tax combined with the existing retail sales and use tax.
- Ends the 25:1 hemp loophole.
You can read additional details regarding the proposal as well as statements from lawmakers here.
Both Aird and Krizek were chief patrons of bills introduced in the Virginia Senate and House of Delegates in the 2026 Regular Session that would have established a retail cannabis market in the commonwealth. Both were vetoed by the governor in May.
The market would be established as part of Virginia’s larger budget process. The commonwealth’s budget is still in limbo amid disagreements on data center tax incentives. The Senate will meet on June 22 to vote ahead of a June 30 deadline.