RICHMOND, VA – This morning Delegate Paul Krizek, alongside Governor Abigail Spanberger and Senator Lashrecse Aird, announced the establishment of an adult-use retail cannabis market through the ongoing budget process. The compromise legislation is the result of a years-long process that has brought together legislators, consumers, public safety experts, and business owners to create a regulatory framework that prioritizes the safety of Virginians and success of entrepreneurs.
“By bringing together key components of the House, Senate, and Governor’s proposals, the proposed compromise exemplifies the kind of good governance Virginians deserve from their elected officials,” said Delegate Paul Krizek, Chairman of House General Laws. “This fair, safe, and legal adult-use retail cannabis market will allow for essential oversight of cannabis products, protecting Virginians in every corner of the Commonwealth. It also supports Virginia’s entrepreneurs by creating an even playing field for small businesses to succeed in the emerging market.”
Key components of the proposed compromise legislation include:
- 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 Cannabis Control Authority (CCA) would begin accepting applications for licenses on February 1, 2027.
- Preserves a pathway for microbusinesses, including authority to issue up to 100 microbusiness licenses by May 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, by transferring regulation to the CCA from the Virginia Department of Agriculture and Consumer Services.
- Restores key investment into the Cannabis Equity Business Loan Fund, with 75% of license fee deposits directed there in the first year, ensuring support for small businesses entering the market.
- 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.
- Established in the 2021 legislation, the Fund 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.