Virginia Lawmakers Make Renewed Push to Launch Commercial Adult-Use Cannabis Market

It’s been nearly three years since former Virginia Gov. Ralph Northam signed an adult-use cannabis legalization bill into law, and the state’s lawmakers are still fighting to establish a commercial market with regulated sales.

Northam signed legislation in April 2021 that allows adults 21 and older to possess up to an ounce of cannabis and grow up to four plants at home for personal use. The bill set a 2024 target date to launch commercial adult-use sales but included a reenactment clause that required the General Assembly to reauthorize certain provisions and establish a regulatory framework for a commercial market.

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Legislative efforts to create this framework have repeatedly stalled after Republicans took control of the House of Delegates and Republican Gov. Glenn Youngkin took office in 2022.

However, this has not deterred lawmakers from reintroducing legislation this year to once again attempt to establish a commercial adult-use cannabis market in the commonwealth, especially now that Democrats regained control of the House in 2024.

Sen. Adam Ebbin, D-Alexandria, introduced Senate Bill 423 Jan. 9 to launch adult-use sales July 1, 2024, through certain medical cannabis licensees. The legislation would also allow the Virginia Cannabis Control Authority, the regulatory body tasked with overseeing the market, to license additional adult-use retailers beginning July 1, 2025. In addition, S.B. 423 would authorize up to five hemp manufacturers to become licensed to serve the adult-use market by Jan. 1, 2025.

“Instead of being invested in our communities, hundreds of millions of dollars in unrealized tax revenue is lining the pockets of organized crime,” Ebbin told WUSA. “I think it's appropriate for adults who make the decision to use cannabis to get a tested product that is taxed and regulated.”

Del. Paul Krizek, D-Alexandria, introduced identical legislation, House Bill 698, in the House of Delegates Jan. 9.

The legislation directs the Virginia Cannabis Control Authority’s board to award a minimum of five adult-use cannabis licenses to cultivators, manufacturers and wholesalers in each of Virginia’s 40 senate districts.

The proposal would require three licenses per category per district to be awarded to “micro businesses,” defined as applicants with companies at least 66% owned by individuals who have either lived for three of the past five years in a historically disadvantaged community or attended public school in such a community for at least five years. Other qualifications for a micro business license include serving in the military.

Micro business licensees would be authorized to cultivate up to 10,000 square feet of cannabis, manufacture up to 1,000 pounds of cannabis products annually or wholesale up to $500,000 of cannabis per year.

The legislation also directs regulators to issue at least eight adult-use cannabis retail licenses per senate district, with three in each district earmarked for micro businesses.

The proposal would prohibit outdoor cultivation and allow local governments to hold referendums on whether to prohibit cannabis businesses within their jurisdictions.

The legislation would impose a 6% sales tax on adult-use cannabis and allow local governments to establish their own 6% sales tax.

This year’s adult-use cannabis sales proposal largely mirrors Ebbin’s 2023 legislation and marks the senator’s third legislative attempt to launch a commercial cannabis market in the state.

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Should this year’s proposal reach Youngkin’s desk, it could face opposition; according to Richmond BizSense, the governor told the press after his State of the Commonwealth address earlier this month, “There’s so many things that we can work on that I think we can get to the finish line, and as I’ve said, I just don’t have a lot of interest in pressing forward with marijuana legislation.”

Meanwhile, a study published in November found that Virginia’s medical cannabis market is also struggling to launch in a meaningful way; the analysis, mandated by legislation passed by the General Assembly, revealed that 90% of the state’s patients are purchasing cannabis outside the regulated market, in part due to high prices and more appealing adult-use cannabis policies in bordering states.