Editor's note: Virginia lawmakers behind the adult-use cannabis dispensary sales bill rejected the governor's amended substitute on April 22, sending the bill in its original form back to her desk to either veto, sign or let it become law without her signature. That story is here.
If five years since Virginia legalized adult-use cannabis possession without dispensary sales hasn’t been long enough, Gov. Abigail Spanberger is now pressuring the Legislature to delay the state’s licensed retail launch a little longer.
The Democratic executive amended the state’s adult-use cannabis dispensary sales bill to postpone the launch date six months, from Jan. 1 to July 1, 2027, and sent the legislation back to state lawmakers.
This change, to “allow for additional time to implement a legal market safely and curb the illicit market,” came just ahead of the governor’s 11:59 p.m. deadline on April 13 to act on the bill.
It also came after former Democratic Gov. Ralph Northam signed a legalization bill in April 2021, allowing those 21 and older to possess up to 1 ounce of cannabis and grow up to four plants at home.
Since then, state lawmakers have weighed countless reports and input, collaborating with state regulators, industry leaders, advocates and public safety stakeholders before landing on the Jan. 1 launch date.
But that was too soon for Spanberger’s liking.
“Five years ago, the commonwealth took the first steps to legalize marijuana – and for five years, the work sat unfinished,” the governor said in a press release. “We are working to set up a marketplace that is controlled, regulated, and responsible – because legal markets only succeed when there are clear guardrails and enforcement to back it up.”
Spanberger’s amendments also “strengthen the enforcement provisions,” aligning her substitute of the sales bill with another bill that specifically focuses on civil penalties for cannabis and hemp violations, a move she said would “put greater focus on consumer and product safety” in the commonwealth.
“To keep our next generation safe, we must also ensure real consequences for vape shops that have spent years targeting Virginia’s kids,” the governor said. “We need to rein in these shady businesses and make sure a legal marijuana market does not make the problem worse.”
Spanberger’s amended substitute also reduces the Legislature’s possession limit from 2.5 ounces to 2 ounces of cannabis flower, or an equivalent amount of a cannabis product, for adults 21 and older. Edible products would remain capped at 10 milligrams of THC per serving and 100 milligrams per package under the governor’s substitute.
The governor also amended the bill to include a cannabis excise tax increase, from 6% to 8%, on dispensary sales, effective after July 1, 2029. This rate is in addition to the state’s 5.3% retail sales and use tax. Also, localities would be allowed to levy a 1% to 3.5% cannabis tax under the legislation.
The Legislature earmarked revenue generated from the state excise tax to be allocated for specific programs, including 40% toward supporting early childhood care and education; 30% toward a Cannabis Equity Reinvestment Fund; 25% toward the Department of Behavioral Health and Developmental Services; and 5% toward public health programs.
But Spanberger’s substitute strikes out these percentages and instead states that the tax revenue shall be appropriated “for purposes such as early childhood education, behavioral health, public health awareness, prevention, treatment, and recovery services, workforce development, reentry, indigent criminal defense, and targeted reinvestment in historically disadvantaged communities.”
The state’s five existing medical cannabis operators, which are currently allowed to operate up to six dispensaries each, could still pay a one-time $10 million conversion fee to enter the adult-use marketplace.
However, the governor’s amendments reduce the number of dispensary licenses that the Virginia Cannabis Control Authority (CCA) could issue before Jan. 1, 2029, to 200 for new market entrants. Under the Legislature-passed bill, that number was 350 dispensaries that could be issued before Jan. 1, 2028.
After Jan. 1, 2029, the CCA could determine whether to issue additional licenses based on market dynamics.
The governor’s substitute retains a provision that would prevent localities from opting out of allowing adult-use cannabis businesses to operate in their jurisdictions, while also keeping local control for zoning ordinances and fixed business hours for dispensaries.
It’s now up to the Democratic-controlled Legislature to decide whether to approve Spanberger’s amended substitute, with lawmakers scheduled to reconvene on April 22 to reconsider bills that the governor amended or vetoed. While the Virginia House had a comfortable 64-32 margin when it passed the sales bill last month, the Senate voted along party lines, 21-18, offering less cushion for error.
Regardless of the program launch date, Virginia will have the longest delay between legalizing adult-use cannabis and actually commencing dispensary sales: 2,262 days per the governor’s timeline. The average program rollout for the other 23 adult-use states is 532 days.
Virginia’s program delay stems from Democrats losing their government trifecta in 2022, when former Gov. Glenn Youngkin was seated for his four-year term, and when Republicans also took control of the House for two years.
With no GOP-controlled or divided Legislature choosing to legalize adult-use cannabis to date, this is Virginia’s best shot since 2021 to push the reform package across the finish line through codifying dispensary sales in state law – something Virginia Democrats failed to do during their previous trifecta five years ago.
