RICHMOND, Va. β For several years now, marijuana possession has been legal in Virginia, but there has never been a legal way to buy or sell it.
This summer, lawmakers are once again looking at legislation to create a retail market. But the work they're doing could all depend on who ends up as the next Governor of Virginia.
Commission races against time
For the past two years, the Democrat-controlled General Assembly has approved legislation for a retail marijuana market. But each time, it was vetoed by Governor Glenn Youngkin.
With his term ending this year (governors in Virginia cannot serve consecutive terms), a commission is looking to see if any changes should be made to the legislation before the 2026 session.
"We have this summer and fall to get it right," said Del. Paul Krizek (D-Fairfax), chair of the Joint Commission to Oversee the Transition of the Commonwealth into a Cannabis Retail Market.
"Everything is up in the air, right? I mean, we β this is our opportunity in the next, you know, couple meetings to figure out," Krizek said.
WATCH: Youngkin vetoes Virginia bill establishing marijuana retail sales
Tax rate debate
Among the topics at a meeting this week was what the tax rate should be. The 2025 legislation had it at nearly 12% with a local option, and lawmakers looked at what the other 23 states do and how much they have made.
One of the questions was what is the right amount that will encourage people to stop using the illegal market.
"So, some of us feel like that, maybe, we should start the tax at a lower end to compete," said Sen. Adam Ebbin (D-Alexandria).
Revenue allocation discussions
Whatever lawmakers decide on the tax rate, they also discussed how the money would be spent.
Chelsea Higgs Wise, Executive Director with Marijuana Justice, laid out a few requested changes to the legislation, including copying an earlier version that put upfront money into the fund that would provide loans to smaller businesses trying to get started in the industry. The initiative would eventually be funded by taxes collected from marijuana sales, but Higgs said that will not exist in the first year.
"The potential by investing in our initial rollout really leads to a more stable industry," said Chelsea Higgs Wise with Marijuana Justice.
Wise also encouraged lawmakers to provide more guidance on how money allocated to the Cannabis Equity Reinvestment Fund is spent (which is aimed at helping people and communities who were disproportionately impacted by the war on drugs).
"What we've said that could make the most sense is that the 50% of the money would go to that Cannabis Equity Loan Fund, because it does support our businesses. As well as 40% will go to more of the program assistance programs as well as scholarships and grants. And then 10% to the indigent fund," said Wise."We have to make sure that we are staying targeted and what our goals are for Virginia, and really fund the programs that we're saying as Virginia can make us better at the whole."
However, lawmakers expressed a need to be flexible with a new potential tax stream and whether it could be used to offset federal funding losses from President Trump's recently signed tax bill.
"I think we are going into a different financial situation because of changes on the federal level. And so, we have to look forward, not back and what some of the priorities should be with any revenue that we generate from the retail market," said Del. Cia Price (D-Newport News). "As was mentioned, [there is] some of the overlap with some of those communities. They would be the ones that β there might be Medicaid cuts, there might be School Meal cuts and things. So, we may not be talking about too many different buckets. It might be some of the same residents that we need to assist, but we want to make sure that we're being diligent in using current information."
Small business concerns addressed
The commission also took testimony about regulations and the right balance that isn't overburdensome for small businesses. Those in the hemp industry testified to the impacts from a 2023 law change and noted nationwide, the vast majority of small businesses in retail marijuana don't turn a profit.
"Lower licensing limits. We want to see higher licensing caps so that we have more opportunity for some of our small operators to compete and enter. We'd also like to make sure that the tax rates are affordable," said Barbara Biddle, president of the Cannabis Small Business Association. "I understand that tax revenue is an important talking point for our legislators, but we need to make sure it's a rate that allows us to still be in business, to provide them that tax revenue five years from now."
"We are looking if there are some overly burdensome regulatory issues that we're hearing from the small businesses, okay, how do we balance the safety of residents, but also the success of our small businesses?" Price said.
Governor's race could determine outcome
Regardless of what lawmakers decide this summer, it will eventually hinge on this November's elections voters will have their say on all 100 seats in the House of Delegates are on the ballot (meaning control of that chamber) and who will be the 75th Governor of Virginia (and will have final say on any legislation passed).
Republican candidate Lt. Gov. Winsome Earle-Sears' campaign did not respond to requests for comment about her thoughts on a retail marijuana market and if she would sign legislation to create one.
Democratic candidate Abigail Spanberger released the following statement:
"As the next Governor of Virginia, I look forward to working with our General Assembly to find a path forward to creating a legalized retail market for cannabis that both prioritizes public safety and grows Virginia's economy," Spanberger said. "The Commonwealth needs a clear strategy to set up a market that is safe, transparent, and good for Virginia β particularly, revenue from commercial cannabis products must be reinvested into our communities and used for purposes like strengthening our public schools."
The Commission does not have its next meeting scheduled, but said it will cover licensing and medical marijuana when it does happen.
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