Virginia governor explains shock rejection of cannabis retail market

Rather than launch a $1 billion cannabis market that might have problems, Virginia Gov. Abigail Spanberger would prefer no legal retail sales at all.

Concerns over a “rushed” launch that could repeat “the mistakes of other states” – plus a belief that Virginia was going to permit too many stores – convinced the governor to scrap plans to finally begin to adult-use cannabis sales, she said Wednesday at an unrelated event.

“I continue to support the creation of a retail marijuana market,” said the governor, who stressed that the market must also be “a durable one.”

“The notion that, between July and January, we would be able to build out all of the rules of the road for a legal recreational marijuana market and have doors open to sales in January, is a rushed time frame,” Spanberger said.

What is a ‘rushed’ adult-use cannabis retail launch?

Spanberger also said 350 cannabis stores, the cap suggested in a bill passed by the state General Assembly, with up to three stores per locality, was “far more” than she was comfortable with.

She also expressed concern over Virginia repeating “the mistakes of other states that have either rushed, or even thinking that they got it right on a methodical path.”

Spanberger and her team “engaged with other states, and other governors … to make sure we could learn from some of the challenges that other states have faced.”

She did not identify the states or specific mistakes beyond a too-fast timeline.

Ohio launched adult-use cannabis sales in August 2024, less than a year after voters legalized it in November 2023. Sales began in Maryland in July 2023 after voters legalized in November 2022.

Neither of those states has drawn widespread industry criticism.

By contrast, many operators in New York, where the first store opened in December 2022 after lawmakers passed a legalization bill in March 2021, have lambasted that state’s slow start – a launch that Gov. Kathy Hochul also blasted as “botched.”

When will cannabis sales begin in Virginia now?

Spanberger created high hopes for cannabis operators with her campaign-trail promise that she’d break from a precedent set by her Republican predecessor and sign legislation finally launching adult-use sales in Virginia into law.

The state legalized adult-use cannabis possession in 2021 but has not yet set up sales, creating what many critics have called a thriving illicit market filled by unlicensed smoke shops and other sources, including hemp-derived offerings.

After some back-and-forth with state lawmakers, who rejected major changes Spanberger proposed to a long-debated retail sales framework, the governor sent everyone back to the drawing board Tuesday when she vetoed the bill.

State lawmakers wanted to launch adult-use cannabis sales in January 2027, with cannabis taxed at 6% and existing medical license holders eligible to enter the adult-use market upon payment of a $10 million conversion fee.

Spanberger wanted to launch sales in July 2027, raise taxes to 8% in 2029 and cap cultivation at 70,000 square feet and retailers at 200 statewide.

Meanwhile, one of the cannabis multistate operators active in Virginia said the governor’s veto means a $50 million plan to expand the existing business and hire “hundreds” of new workers is on hiatus.

“All that is on pause,” an executive from Florida-based Jushi Holdings told The Washington Business Journal.