Joint commission hears roadmaps for Virginia’s retail cannabis rollout

Cannabis plant. (Photo by Getty Images)

Virginia’s long-delayed path toward a legal cannabis marketplace took another step forward Wednesday as the state’s new bipartisan commission convened for its second meeting at the Capitol, listening to hours of presentations on taxation, equity, and the role of small businesses in shaping what could become a billion-dollar industry.

The joint commission — created this year by lawmakers after Gov. Glenn Youngkin once again vetoed legislation establishing a retail system — is charged with building consensus around a plan to launch sales by 2026. On Wednesday, it heard from national experts, equity advocates, fiscal analysts, and small business owners whose livelihoods may hinge on the rules Virginia adopts.

The political stakes remain high in an election year when three statewide offices and all 100 seats in the House of Delegates are on the ballot.  

In a stark contrast to Youngkin, former U.S. Rep. Abigail Spanberger, the Democratic nominee for governor, has already signaled she would sign cannabis retail legislation if it reaches her desk. 

“I support a legal marketplace for cannabis,” she told The Mercury in an interview earlier this month. “I want to ensure that it is fully regulated, people know what they’re buying, and revenues go towards education.”

A stalled start

Virginia first made headlines in 2021 when lawmakers voted to legalize possession and home cultivation of small amounts of marijuana, making it the first Southern state to do so. But while residents can grow plants at home, retail sales were never authorized.

Lawmakers attempted to fix that earlier this year with a bipartisan proposal to create a regulated market starting in 2026, complete with microbusiness licenses, a seed-to-sale tracking system, and projected revenues of $87.8 million annually by 2031. 

The bill would have steered 40% of tax revenue to early childhood education, 30% to equity reinvestment, 25% to substance use treatment, and 5% to public health.

Youngkin vetoed the plan, warning it would endanger public safety and expose children to harm. He also struck down companion measures to expunge old marijuana convictions and shield parents from custody challenges based on legal cannabis use. Advocates blasted his vetoes as shortsighted.

In response, lawmakers created the Joint Commission on the Future of Cannabis Sales through House Joint Resolution 497 — a move that did not require the governor’s signature. The body will operate through 2028 as a venue for public input and legislative planning.

Its first meeting in July was mostly organizational. Wednesday’s session — its second — was the first chance to dig into the policy choices facing Virginia.

Lessons from other states

Andrea Jimenez, a policy specialist with the National Conference of State Legislatures, opened the meeting with a survey of how 23 states have structured their cannabis markets. Taxation, she explained, varies widely — by percentage of price, product weight, or even potency.

Jimenez pointed to Maryland, which recently raised its marijuana tax from 9% to 12%, directing most revenue to the general fund and the Community Reinvestment and Repair Fund. Colorado, by contrast, splits its 15% excise and 15% sales taxes between schools, local governments, and general funds.

New York and Connecticut have experimented with potency-based taxes and earmarked large shares of revenue for equity programs. But even states with established markets have faced challenges.

“There’s just simply too much product for the amount of demand that exists,” Jimenez warned, noting falling marijuana prices in California, Colorado, and Michigan that have depressed  revenues.

Reparative justice and fiscal trade-offs

Equity was a recurring theme throughout the meeting. Chelsea Higgs Wise, executive director of Marijuana Justice, reminded lawmakers that legalization in Virginia was driven not only by economics but by racial justice.

“In 2020, JLARC confirmed what many Virginians knew — that Black folks in Virginia were being arrested 3.5 times more and received marijuana convictions 3.9 times the rate of white Virginians,” Wise said, referring to a study by the Joint Legislative Audit and Review Committee published that year.

That disproportionate enforcement inspired lawmakers to pass the 2021 law ending criminalization.

Wise urged the commission to uphold the commitments made then, including the Cannabis Equity Reinvestment Program and Loan Fund. 

“An adequate investment in a strategic rollout that considers these issues will give us the best chance that we have for a successful, long-term market,” she said.

Projected revenue under Virginia’s current framework — about $74 million to $94 million annually — could fund scholarships, workforce training, and community reinvestment. But Wise cautioned that opt-out referendums could allow localities to ban sales until 2026, weakening both revenues and equity goals.

Rodrigo Soto of The Commonwealth Institute for Fiscal Analysis offered a broader fiscal context. 

His group modeled how cannabis revenues stack up against other revenue options the legislature might consider in 2026, from income tax changes to corporate levies.

Creating a retail cannabis market could bring in about $61.5 million under the current bill, Soto said. But if taxed at 20% to 25%, as JLARC recommended, revenues could range from $122 million to $254 million annually by the market’s fifth year.

“The design choices really matter,” Soto told the panel. Distribution decisions — such as how much goes to pre-K, substance use programs, or public health — will ultimately shape the impact on Virginians.

The small business dilemma

Perhaps the most passionate testimony came from small business owners who fear being shut out of the new market.

Barbara Biddle, founder of District Hemp Botanicals, recounted how her company grew from a $2,000 investment and a six-foot table into three storefronts and nearly $2 million in revenue. But after lawmakers passed a 2023 bill restricting hemp-derived products, she lost half her business overnight.

“The bill did far more than just outlaw Delta 8,” Biddle said, referring to Delta-8 tetrahydrocannabinol, a psychoactive substance found in the cannabis sativa plant. “It knocked out 90% of the market, including non-intoxicating CBD products my customers came to rely on.”

Biddle warned the panel to avoid mistakes that favored large corporations at the expense of local entrepreneurs. 

“Doing so will not only promote safety, but also preserve fair competition and prevent consumers from bearing the burden of artificially high prices,” she said.

Her colleague, Eric Spanbauer of the East Coast Collective, echoed those concerns. 

“These are not faceless corporations,” he said. “They’re your neighbors, your local employers, and your community partners.”

Spanbauer urged the state to lower application fees, expand license caps, and offer micro-licenses and training for small operators. 

“If we repeat the same pattern, writing rules that only billion-dollar corporations can comply with, we risk destroying the very foundation of what could be a thriving, inclusive Virginia-based marijuana industry,” he said.

Wednesday’s presentations underscored the delicate balance facing lawmakers: generating revenue, ensuring equity, supporting small businesses, and satisfying a wary public.

Most Republicans, led by Youngkin, remain skeptical. The governor has consistently argued legalization will not eliminate the black market and could worsen youth drug use. His veto message earlier this year cited risks of “increased gang activity” and “adverse effects on children’s and adolescents’ health.”

Democrats, meanwhile, are betting the politics will shift with a new governor. Spanberger has leaned into her support for legalization, framing it as a matter of regulation and education funding. “Consumer knowledge, heavily regulated, heavily taxed, with revenues mostly going towards education,” she said in the interview with The Mercury.

The commission will continue meeting, with the goal of crafting legislation for introduction in 2026. Members stressed that public input and stakeholder testimony will guide the process.

For now, cannabis in the commonwealth remains in limbo: it’s legal to possess, illegal to buy. 

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