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Political flare-ups notwithstanding, Virginia’s new retail marketplace for marijuana is officially set for liftoff on July 1, 2027.
After initially vetoing enabling legislation this spring, Gov. Abigail Spanberger and her Democratic counterparts in the General Assembly found common ground at the last minute, slipping the new law into the budget bill that passed June 29.
Five years after the General Assembly legalized possession for adults, the state finally got around to allowing retail sales of psychoactive weed for recreational use.
Almost immediately, fights erupted over enforcement and language in the law itself. No, it doesn’t inadvertently legalize possession by minors or launch the retail market a year early. It does, however, create a path for 350 retail stores across the state and a massive new source of tax revenue.
But don’t pop the Champagne just yet. Ngiste Abebe, a cannabis policy expert based in Richmond who has been working with state lawmakers and other stakeholders to create the marketplace since 2019, says the real work has only just begun. “Legalization is great, but it’s not really a moment to pause for celebration, because it just means the rest of the work just got very real for everybody,” she says.
Setting up the regulatory structure; issuing the initial tranche of 100 microbusiness licenses, which allow smaller operators to grow, process and sell their own product; and transitioning existing medical dispensaries to recreational retail sales won’t happen overnight.
There are also outstanding issues to work out: namely, how to divvy up the expected tax revenue from cannabis sales. By 2029, the tax rate will range from 13.3% to 16.8%, depending on the locality. The money is being set aside for early childcare and education, behavioral health programming, and the Cannabis Equity Reinvestment Fund, but exactly how much hasn’t been determined just yet.
There’s time, Abebe says. She expects it will take three years to get the market up and fully operational. By year three, tax revenues are expected to come in at roughly $62 million; by year six, that revenue is expected to eclipse $150 million, according to the Virginia Department of Planning and Budget.
“It’s going to be really exciting, and it’s also really challenging,” Abebe says. “But it does take time before you really start to see the fruits of this legislation in the marketplace.”
