THE BILL
What the bill does not specify
No statutory dollar amounts for:
- Retail marijuana store licenses
- Microbusiness licenses
- Impact licenses
- Cultivation licenses (Tier I through Tier V)
- Processing licenses
- Delivery operator licenses
- Nursery licenses
- License renewals
All of these are explicitly left to CCA rulemaking under § 4.1-606.
What this means in practice
- Fees will be set by regulation, not by statute
- The CCA Board has wide discretion
- Fees can vary by license type, scale, or risk profile
- Small operators are not pre-priced out in the statute
- There is no baked-in high fee for microbusinesses or impact licensees
- This creates room for genuinely low-cost entry if the Board chooses
- Big players pay upfront, small players face uncertainty
- MSOs and hemp conversions have fixed, high barriers
- Everyone else must wait for regulations to know actual costs
- Fees can change without legislative amendment
- Because they are regulatory, future Boards can raise or lower them without a new bill
Detailed Notes Below
This proposal lays out a comprehensive framework to launch Virginia’s adult-use retail cannabis market, with a strong emphasis on equity, decentralization, transparency, and limiting corporate consolidation. It restructures how licenses are issued, who can own them, how large operators can become, and how small, local businesses are protected and prioritized.
Core themes
1. Stronger oversight and transparency
- The Cannabis Control Authority (CCA) must publish annual public reports on market health.
- Ownership and financial disclosures for all licensees must be publicly available.
- Mandatory annual audits of ownership and financial relationships.
- The CCA gains explicit authority to investigate, approve, deny, or force divestment of ownership or financing arrangements.
- Transfers or changes in ownership without prior approval are void and grounds for license revocation.
2. Anti-monopoly and anti-MSO guardrails
- New market-concentration limits, including statewide and regional caps and HHI benchmarks.
- Brand-licensing, loans, marketing payments, or service agreements that influence pricing, shelf space, or brand placement can be prohibited.
- Any ownership interest, even as small as 0.01%, counts toward license caps.
- A person may not hold more than one Tier IV cultivation license.
- Tier V indoor canopy is reduced from 70,000 sq ft to 35,000 sq ft.
3. Major restructuring of license types
- Retail licenses remain capped at 350 statewide.
- Other license caps are set by regulation rather than statute.
- New license categories include:
- Marijuana nursery licenses (clones, seeds, immature plants only).
- Microbusiness licenses allowing cultivation, processing, and limited direct-to-consumer sales.
- Delivery-only licenses.
- Shared processing hubs so small operators do not need their own full facilities.
4. Microbusiness and direct-to-consumer sales
- Microbusinesses may:
- Grow, process, and sell only their own products.
- Sell via age-verified delivery and limited on-site retail.
- Canopy limits:
- Indoor: 3,500 sq ft
- Outdoor: 10,000 sq ft
- Only one license and one location per microbusiness.
5. Temporary DTC microbusiness rollout
- Up to 100 temporary direct-to-consumer microbusiness licenses issued in 2026.
- Priority applicants include:
- Hemp growers or processors in good standing.
- Impact licensees.
- USDA-qualified farmers.
- Cultivation and processing may begin before retail sales.
- Retail sales begin November 1, 2026.
- Program sunsets once 100 retail stores are operational or after 24 months.
- Temporary licenses can convert to permanent microbusiness licenses.
6. Impact licensee changes
- Expanded eligibility, including certain felony marijuana convictions, even from outside Virginia.
- Residency criteria now based on disproportionately policed census tracts from 2015 to 2025.
- USDA distressed farmers added as qualifying criteria.
- Applicants must meet at least 4 of 7 criteria, eliminating point-based prioritization.
7. Retail rules and location limits
- Retail stores must be at least one mile apart.
- Stores cannot be within 1,000 feet of schools, hospitals, playgrounds, religious institutions, treatment centers, or government buildings.
- Stores may sell paraphernalia, which is removed from cannabis taxation.
- Pharmaceutical processor retail stores must stock a required percentage of products from microbusinesses and impact licensees.
8. Labeling, advertising, and public health
- Updated labeling rules for edible, inhalable, and topical products with clearer THC and CBD disclosures.
- Outdoor advertising restrictions aligned with medical cannabis standards.
- Signs cannot depict marijuana imagery or draw undue attention.
- Required consumer education on responsible use and health risks.
9. Labor, taxes, and funding
- All applicants must enter a labor peace agreement.
- Local cannabis tax cap raised from 2.5% to 3.5%.
- 50% of the Cannabis Equity Reinvestment Fund is directed to business loans.
- $3 million allocated upfront to support the first licensing round.
10. Elimination of local opt-outs
- Localities can no longer block cannabis sales via referendum.
- Retail sales may begin statewide on November 1, 2026, if licensing conditions are met.
Bottom line
This bill is designed to prevent MSO domination, favor small, local, and impacted operators, create direct-to-consumer pathways, and impose strict ownership transparency and anti-consolidation rules. It deliberately prioritizes long-term market stability and equity over maximizing short-term tax revenue.
