Spanberger, legislators roll out retail weed plan, set to launch in July 2027
State sales tax on retail weed will be 6% to start and rise to 8% in 2029, while retail locations to be capped at 350 statewide
Tuesday morning, Gov. Abigail Spanberger and the legislative architects of a long-awaited retail weed framework presented a revamped plan for the recreational marketplace that they said is set to launch next summer, pending finalization of the state budget.
The announcement marked a major shift, after Spanberger vetoed the cannabis marketplace plan approved by lawmakers in this year’s General Assembly session, five years after the state made adult simple possession legal.
“I am excited to stand alongside Sen. Lashrecse Aird and Del. Paul Krizek to announce that we have agreed to a proposal that will create a safe, legal, and well-regulated cannabis market here in the commonwealth of Virginia, with recreational sales beginning on July 1, 2027,” Spanberger said at the press conference in Richmond.
“Virginians have been waiting a long time for policymakers and a governor who wanted to do this and get it right. And today we are taking an important step forward,” Spanberger added.
Aird, a Democrat from Henrico, said the state tax on cannabis sales will be 6% at launch and will increase to 8% in 2029. Localities also have the option to add an additional tax of 1 to 3.5%.
“If our goal is to move consumers away from the illicit market, then the legal market has to be able to compete, and keeping the tax rate low at the start is not just an economic decision, it is a public safety strategy,” Aird said.
The plan will also limit the total number of retail locations to 350 statewide, which Aird said wouldn’t all debut at once and will be geographically balanced.
In a compromise between the original legislation and Spanberger’s tweaks that lawmakers rejected before her veto, the new framework includes a $250 public consumption civil penalty that will not take effect until 2027.
“We had serious concerns about creating extreme new penalties that would not have meaningfully reduced the illicit market,” Aird said, “but we believe this final framework strikes the right balance for enforcement mechanisms, but also in accountability, but also not harming those who just choose to participate in the market.”
Krizek, a Fairfax Democrat, announced several measures designed to make the marketplace more equitable and accessible to small businesses, including one that will direct 75% of license fee deposits in the first year of operation into the Cannabis Equity Business Loan Fund.
“This is important because access to capital is one of the biggest barriers for small businesses entering a highly regulated marketplace,” Kirzek said.
The Virginia Cannabis Control Authority will be allowed to issue up to 100 microbusiness licenses by May 1, 2027, Krizek added, which will “help prevent the market from being dominated solely by the largest and best capitalized ventures.”
Microbusinesses will also be authorized to operate up to two locations under their license structure, which had been a key concern for small and rural entrepreneurs.
Regulatory structures of the original plan like seed-to-sale tracking, a product testing framework, licensing administration, and reporting requirements related to ownership, equity, participation, and disciplinary actions are present in the updated framework, with Krizek framing them as tools to “create transparency and accountability as the market develops.”
In contrast to the recent tensions between leading Democrats and Spanberger after she vetoed 31 bills that represented priority issues for the party, the governor, Aird and Krizek repeatedly emphasized the collaboration and compromise undergirding the new plan.
“We have always had this same end goal, an end goal that has been years in the making, so I am proud to stand alongside these dedicated legislators and to be working alongside them to deliver a marketplace built to last,” Spanberger said.
The retail cannabis plan — released as the Senate money committee met nearby to unveil its reworked state spending proposal — hinges on finalization of the state budget, which has been stalled for weeks as lawmakers debate whether data centers’ sales tax exemption should continue.
“I believe that the Senate is very much interested in also getting us a budget, and that we have shared goals on how to get there,” Aird said.
The House revealed its new budget proposal on Friday; the chambers must work together to finalize the budget by June 30 to prevent a state government shutdown.
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