Virginia Gov. Abigail Spanberger announced Tuesday a plan for a retail marijuana marketplace to open in the commonwealth, a deal described as a compromise after months of ongoing discussions.
As part of the agreement, the marketplace will open July 1, 2027. The state tax on cannabis products will begin at 6% and increase to 8% in 2029.
The plan, which is tied to the state’s lingering budget process, comes after Spanberger vetoed the proposal that made it through the General Assembly. But the conversations continued, and the latest legislation will be included in any budget package that Spanberger reviews.
Though the concept of a legalized marijuana market had previously passed in Richmond, former Gov. Glenn Youngkin vetoed the idea twice.
“In the end, we all wanted to deliver a marketplace that the Commonwealth could implement effectively for the long term,” Spanberger said at a news conference. “We have always had this same end goal, an end goal that has been years in the making.”
In one of the biggest differences, the plan unveiled Tuesday includes a $250 civil penalty for public consumption, which will go into effect next year. That’s an increase from the current fine, but Spanberger had initially proposed making public consumption a Class 4 misdemeanor.
There will be 350 retail locations across the commonwealth, the same number that elected officials agreed upon in the vetoed legislation. Spanberger proposed reducing that to 200, but the new agreement restores the 350 licenses and calls for a phased approach, so they all won’t be released initially.
The shift, state Sen. Lashrecse Aird said, gives the retail market “a real opportunity to meet demand across Virginia.”
By not releasing 350 all at once or right away, Aird said, “it will allow us to assess, geographically and otherwise, the regulators that is, how that should be rolled out.”
Virginia’s Cannabis Control Authority will be tasked with overseeing the process.
Local jurisdictions, Del. Paul Krizek said, will be able to install a 1-3.5% tax on cannabis products.
Part of the agreement, Aird said, includes a focus on “emphasizing enforcement of individuals that will bring harm to young people.”
Spanberger echoed that sentiment, adding, “The place where we clearly found common ground was in ensuring that the penalties are significant and clear for those who sell to underage young people.”
Under the deal, Virginians will be able to buy up to 2 ounces of marijuana per transaction.
While lawmakers had hoped to start the market Jan. 1, the new agreement allows for retail stores to operate beginning July 1, 2027.
The deal includes strict testing and safety standards and calls for a geographically balanced approach in determining where the stores will be located.
Meanwhile, the plan calls for the authority to give out up to 100 microbusiness licenses by May 1, 2027, a step Krizek said is key to ensure small businesses aren’t an afterthought.
A Cannabis Impact Business Support Team will help “businesses and communities most affected by past cannabis enforcement,” Krizek said.
Krizek previously told WTOP some studies have found that a legalized marijuana marketplace could produce about $100 million annually. Revenue will be used to help pay for early childcare and education, K-12 schools and behavioral health programs for substance use disorder prevention and treatment programs, among other things, according to a news release.
After the General Assembly passed the framework earlier this year, Spanberger returned it with dozens of amendments. State leaders opposed over 40 of them and sent it back to her desk, prompting her to veto the plan.
The new agreement is tied Virginia’s ongoing budget process. Lawmakers remain at odds over whether to end a sales tax exemption for data centers.
Asked about the fate of the plan being tied to the budget, Aird cited a Tuesday morning Senate Finance and Appropriations Committee meeting and said, “I believe that the Senate is very much interested in also getting us a budget and that we have shared goals on how to get there.”
Lawmakers are working to approve a new budget package before July 1 to prevent the commonwealth’s first-ever partial government shutdown.
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