(The Center Square) – Retail marijuana sales are one step closer to becoming a reality in Virginia after lawmakers approved a plan to create a state-regulated market, sending the proposal to the governor for a final decision.
The final version passed both chambers through a conference report, with the Senate voting 21–18 and the House 64–32 largely along party lines.
A 6% state cannabis tax would apply on top of the existing sales tax, and local governments could add an additional tax of between 1% and 3.5%.
State fiscal analysts project the market could generate about $10 million in its first year, growing to more than $100 million annually within several years, depending on how quickly the system is implemented and how many businesses enter the market.
House Bill 642 and Senate Bill 542 lay out how marijuana would be grown, processed, transported and sold across the commonwealth.
Rather than opening the market broadly, the plan limits how many businesses can operate and gives the state a central role in deciding who gets a license. If more people apply than there are available spots, the state could use a lottery or tiered selection process depending on demand and eligibility requirements.
The proposal also requires marijuana to be tracked from production to sale and sets rules for how it moves through the system. Deliveries would have to follow strict security and tracking requirements, and violations could lead to licenses being suspended or revoked.
Before products reach store shelves, they would need to be tested for contaminants like pesticides and heavy metals and approved by regulators. Packaging must be child-resistant and cannot be designed in a way that appeals to minors.
Sales would be limited to adults 21 and older, with restrictions on how products are sold, including bans on vending machines and certain delivery locations. The proposal would also increase the legal possession limit for adults from one ounce to 2.5 ounces.
In a statement, Sen. Lashrecse Aird’s office told The Center Square that revenue and implementation will depend on factors such as how quickly the market launches, how many businesses participate and overall demand, adding that parts of the rollout are still being developed.
A fiscal impact statement from the Virginia Criminal Sentencing Commission said the full cost of enforcement and incarceration tied to the legislation cannot be determined. Under state requirements, the proposal is assigned a minimum fiscal impact of $50,000, though that figure is a placeholder because the full cost is unknown.
Most Democrats supported the measure, while Republicans largely opposed it.
The bill also includes a Cannabis Equity Business Loan Fund aimed at helping certain businesses enter the market, particularly those who may face barriers to entry.
Even if signed, the changes will not happen immediately. State agencies would need time to build out the regulatory system, issue licenses and establish oversight before retail sales begin.
The projection is 2027.
The governor can sign, amend or veto the legislation.
