VIRGINIA CANNABIS ROLLOUT: Proposed Legislative Changes for the Virginia Cannabis Retail Market
- Carpfish Creative
- Dec 5, 2025
- 7 min read
Date: December 2, 2025
The Joint Commission to Oversee the Transition of the Commonwealth into a Retail Cannabis Market has proposed 53 legislative changes to support the establishment of a competitive, equitable, and sustainable cannabis retail market in Virginia. These amendments are designed to strengthen oversight, promote social equity, and ensure compliance with regulatory standards.
Market Oversight & Compliance
1. Annual Market Health Report
Statute: § 4.1-604
The Cannabis Control Authority (CCA) shall issue an annual report on the condition and health of the cannabis retail market, to be sent to the Joint Commission overseeing the transition.
2. Consumer Education Requirements
Statute: § 4.1-604
The CCA must develop comprehensive consumer education materials highlighting:
How purchasing from licensees supports farmers, small businesses, and community reinvestment
Responsible cannabis consumption practices
Health risks and dangers associated with marijuana use
3. Public Ownership Registry
Statute: § 4.1-604
The CCA shall maintain a publicly accessible online registry containing ownership and financial disclosure information for all licensees.
4. Annual Compliance Audits
Statute: § 4.1-604
The CCA must conduct at least one annual audit of ownership and financial relationships across all licenses, with anonymized summaries included in the market health report.
Ownership & Financial Oversight
5. Ownership Investigation & Approval
Statute: § 4.1-604
The CCA shall investigate ownership and control interests of all licensees and retain authority to:
Approve or deny ownership, financing, management, and brand-licensing agreements
Issue divestiture orders to ensure compliance with ownership limits
6. Regulatory Standards for Ownership Agreements
Statute: § 4.1-606
The CCA must promulgate regulations establishing:
An approval process for Board review of ownership agreements
Objective criteria defining "undue influence," including considerations such as:
Price-setting authority
Shelf-space control
Financing dependency
Shared personnel
7. Market Concentration Limits
Statute: § 4.1-606
The CCA shall establish market-concentration thresholds, including:
Regional market-share benchmarks
Statewide market-share limits
Herfindahl-Hirschman Index (HHI) benchmarks
The CCA may deny or condition license issuance or transfers that would create undue market concentration.
Administrative & Regulatory Framework
8. CCA Administrative Status
Statutes: § 2.2-2818, 2.2-2905, 2.2-3114, 2.2-3711, 2.2-3802, 2.2-4024
Amendments clarify the CCA's administrative status:
Defines CCA employees as state employees for insurance purposes
Excludes CCA from Virginia Personnel Act requirements
Allows disclosure statements of personal interests
Permits closed-session discussions regarding applicant investigations
Establishes exceptions for government data collection practices
Provides exemptions for Administrative Procedure Act hearings
9. Product Definitions & Labeling Standards
Statutes: § 4.1-600, 4.1-1405, 4.1-1600, 4.1-1602, 4.1-1603
The CCA shall add definitions for:
Edible marijuana products
Inhalable marijuana products
Topical marijuana products
Labeling requirements are updated to specify THC/CBD content appropriate to product type.
License Types & Capacity
10. Updated License Limits
Statute: § 4.1-606
Retail establishments: Maximum 350 licenses
Tier V cultivation facilities: Maximum 10 licenses
Other license types: Limits to be established by Board regulation (processing, Tier I-IV cultivation)
11. Terminology Change: "Impact Licensee"
Statutes: § 4.1-606 and cross-references
"Micro business" terminology is changed to "impact licensee" throughout the statutes.
Impact Licensee Eligibility & Criteria
12. Expanded Impact Licensee Eligibility
Statute: § 4.1-606
Eligibility criteria for impact licensees are expanded to include:
Individuals with prior felony convictions for marijuana distribution (18.2-248.1)
Prior marijuana-related convictions/adjudications outside Virginia
Residents of jurisdictions disproportionately policed for marijuana crimes (2015-2025 census tract analysis)
Persons receiving USDA distressed farmer assistance in the past five years
13. Impact Licensee Qualification Threshold
Statute: § 4.1-606
Applicants must meet at least four of seven criteria to qualify as impact licensees. Priority scoring based on number of criteria met is removed.
14. Ownership Percentage Targets
Statute: § 4.1-606
The CCA must establish measurable ownership percentage targets for each part of the supply chain:
Cultivation
Processing
Retail
New License Types & Operations
15. Marijuana Nursery Cultivation License
Statute: § 4.1-800
A new license type authorizing cultivation of immature plants, clones, and seeds:
Location: Indoors or outdoors
Maximum canopy: 2,000 square feet
Sales: To other licensees only (no retail sales)
16. Microbusiness License
Statute: New § 4.1-802.1
A new comprehensive license for small operators to:
Cultivate, process, and sell their own cannabis and products
Distribution: Age-verified delivery and limited on-site retail sales
Canopy limits: 3,500 sq. ft. (indoor) / 10,000 sq. ft. (outdoor)
Restrictions:
One license per person/entity
One licensed premises per licensee
Sales limited to products cultivated/processed on-site
Must comply with seed-to-sale tracking, testing, labeling, and packaging requirements
17. Marijuana Delivery Operator License
Statute: New § 4.1-803.1 and § 4.1-606
Operators may deliver marijuana from retail stores or microbusinesses to consumers, subject to CCA-established requirements for:
Age verification
Delivery radius limitations
Recordkeeping standards
18. Shared Processing Hubs
Statute: New section around § 4.1-801
Establishes shared processing facilities allowing microbusinesses and small processors to legally process cannabis products without individual processing facility ownership.
Transportation & Logistics
19. Cannabis Transportation
Statutes: § 4.1-800, 4.1-801, 4.1-802, 4.1-1203
Licensees are authorized to:
Transport their own cannabis to other licensees, OR
Use licensed transporter services
Ownership Concentration Controls
20. Interest Definition
Statute: § 4.1-805
For multiple license limitations, "interest" includes any direct or indirect equity interest in an entity, regardless of percentage, including interests of 0.01% or less.
21. Tier IV Cultivation Limit
Statute: § 4.1-805
No person may hold interest in more than one Tier IV marijuana cultivation facility license.
22. License Transfer Requirements
Statutes: § 4.1-606, 4.1-702, 4.1-900
All license assignments, sales, or transfers—and any changes to ownership or control—require prior written Board approval. Unauthorized transfers are void and grounds for immediate suspension or revocation.
The CCA must establish regulations requiring:
Ownership tracing through intermediary entities to beneficial owners
Change of control triggers: 20%+ equity/voting acquisition, management appointment/removal rights, or cumulative 20%+ transfers within 24 months
23. Financial Arrangement Prohibitions
Statute: § 4.1-606
The CCA shall prohibit licensees from making loans, gifts, service arrangements, marketing payments, or brand-licensing agreements with other licensees that unreasonably influence:
Retail pricing
Brand placement
Shelf allocation
Operational Compliance
24. Operational Timeline
Statute: § 4.1-902
The CCA shall suspend or revoke any license if the licensee is not operational within 24 months of license issuance.
25. Pharmaceutical Processor Requirements
Statute: § 4.1-802
Retail marijuana stores operated by pharmaceutical processors must offer a specified amount or percentage of products from microbusinesses and impact licensees (to be established by Board regulation).
Retail Location & Distance Requirements
26. Retail Store Spacing
Statute: § 4.1-808
The required minimum distance between retail marijuana stores is increased from 1,000 feet to one mile.
27. Sensitive Location Proximity
Statute: § 4.1-808
Retail marijuana stores cannot be located within 1,000 feet of:
Places of religious worship
Hospitals
Schools
Playgrounds
Child day programs
Substance use disorder treatment facilities
Government facilities
28. Retail Products
Statute: § 4.1-802
Retail marijuana stores are authorized to sell marijuana paraphernalia.
Application & Licensing Process
29. Public Training & Education
Statute: § 4.1-604
The CCA shall conduct open public training and provide educational resources on the application process for licenses.
30. Lottery Transparency
Statute: § 4.1-604
The CCA shall:
Commission independent audits of license lottery processes
Publish lottery procedures and results on a public dashboard
Conviction History Provisions
31. Marijuana Distribution Conviction Clarification
Statute: § 4.1-808
Prior felony convictions for marijuana distribution (18.2-248.1) are not grounds for denying a license.
32. General Marijuana Offense Provision
Statute: § 4.1-1000
Applicants are not disqualified due to prior marijuana-related offenses (subject to provisions of § 4.1-808).
Taxation & Revenue
33. Local Tax Rate
Statute: § 4.1-1003
Local marijuana tax increases from 2.5% to up to 3.5%.
34. Paraphernalia Tax Exemption
Statute: § 4.1-1003
Marijuana paraphernalia is exempt from taxation.
35. Cannabis Equity Fund Allocation
Statute: § 2.2-2499.8
50% of Cannabis Equity Reinvestment Fund revenue is allocated to the Virginia Cannabis Equity Business Loan Fund (§ 4.1-1501).
36. Initial Appropriations
Budget
$3 million allocated upfront to support the first round of licenses.
Local Control
37. Local Referendum Option Removal
Statute: § 4.1-629
The provision allowing localities to hold referenda to prohibit marijuana sales is removed, eliminating local opt-out authority.
Legislative Purpose & Intent
38. Statement of Purpose
Statute: § 4.1-601
The retail market framework is established to:
Create a regulatory approach rooted in restorative justice, economic equity, and public health
Generate revenue for community reinvestment
Create hundreds of new small and local businesses
Strengthen Virginia's agriculture sector
End the racially disparate impacts of marijuana prohibition
Protect health and safety of all citizens
Build a competitive, sustainable, and decentralized market prioritizing durable independent businesses over short-term tax maximization
Labor Requirements
39. Labor Peace Agreements
Statute: New § 4.1-1000.1
All marijuana establishment license applicants must enter into a labor peace agreement with a bona fide labor organization.
Advertising Standards
40. Outdoor Advertising Consistency
Statute: § 4.1-606
Outdoor advertising regulations for retail marijuana stores shall be at least as stringent as those for pharmaceutical processors or cannabis dispensing facilities.
41. On-Premises Signage Requirements
Statute: § 4.1-1402
Signs on marijuana establishment property shall:
NOT display imagery of marijuana or marijuana use
NOT draw undue attention to the facility
May display information to help consumers locate the establishment (per medical cannabis facility standards)
Implementation Timeline & Special Provisions
42. Temporary DTC Microbusiness Program
Enactment clause provisions
The CCA shall issue up to 100 temporary Direct-to-Consumer (DTC) microbusiness licenses to qualified applicants by September 1, 2026:
Eligibility:
Hemp growers/processors registered with Virginia Department of Agriculture and Consumer Services (in good standing as of July 1, 2026), OR
Qualified impact licensee applicants, OR
USDA-qualified farmers
Timeline:
Applications accepted: July 1, 2026
Licenses issued by: September 1, 2026
Cultivation/processing may begin immediately
Retail sales begin: November 1, 2026
Program sunsets when 100+ retail stores are operational or 24 months elapse (whichever first occurs)
Licensees may convert to standard microbusiness licenses upon program expiration
Canopy Limits: 3,500 sq. ft. (indoor) / 10,000 sq. ft. (outdoor)
43. Pharmaceutical Processor Streamlined Application
Enactment clause provisions
Pharmaceutical processors with existing CCA permits may use a streamlined application process:
Conversion fee: $10 million (one-time, may be paid in installments)
Licenses available: Up to 9
Timeline: Process completed by November 1, 2026
44. Industrial Hemp Processor/Grower Conversion
Enactment clause provisions
Up to 5 industrial hemp processors/growers previously registered with VDACS may obtain cultivation licenses:
Conversion fee: $500,000 (may be paid in installments)
Timeline: Process completed by November 1, 2026
Priority: Treated equally to Tier IV and Tier V cultivation applicants
45. Application Priority Schedule
Enactment clause provisions
Beginning July 1, 2026, application processing priority:
Temporary DTC microbusiness licenses (up to 100 by September 1, 2026)
Streamlined applications for pharmaceutical processors and hemp growers/processors
Applications for impact licenses, microbusinesses, and Tier I/II cultivation facilities
46. Initial Issuance Requirements
Enactment clause provisions
By November 1, 2026, the CCA shall:
Process and issue streamlined applications for pharmaceutical processors
Process and issue streamlined applications for hemp growers/processors (max 5)
Issue at least equivalent amounts of new licenses to impact licensees, microbusiness licensees, and Tier I/II cultivation facility licensees
47. Retail Sales Launch
Enactment clause provisions
Retail sales may begin November 1, 2026 once licensees meet all operational conditions.
48. Future Studies
Enactment clause provisions
The Joint Commission shall study:
Establishment and implementation of on-site consumption licenses
Microbusiness cannabis event permits (e.g., farmers markets)
Advantages, disadvantages, and feasibility of Virginia Alcoholic Beverage Control Authority involvement in cannabis enforcement
Reference Information
Note: These proposed changes are intended to amend the statutory language contained in HB 2485 and SB 970. The text of those bills serves as the foundational framework.
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