Virginia lawmakers have approved legislation that would create a legal retail market for recreational cannabis in the Commonwealth, ending years of uncertainty after possession was legalized but sales remained illegal. 

The bill passed the General Assembly on the final day of the 2026 legislative session, with the House voting 64–32 and the Senate approving the measure 21–18 late Friday night. 

If signed into law by Governor Abigail Spanberger, who has indicated support for the measure, Virginians 21 and older would be able to legally purchase recreational cannabis through a regulated retail system beginning January 1, 2027. 

Supporters of the legislation say the move could bring significant tax revenue to the state. Lawmakers estimate Virginia could generate more than $400 million in annual cannabis tax revenue during the first five years of legal retail sales once the market is fully operational.

Virginia legalized possession of small amounts of marijuana in 2021, allowing adults to possess up to one ounce and grow up to four plants at home. But lawmakers never finalized the framework needed to legally sell cannabis, leaving the state in an unusual position where marijuana could be legally possessed but not purchased. 

Supporters of the new legislation say the absence of a legal marketplace has fueled an unregulated system with little oversight.

Del. Paul Krizek, a key sponsor of the House version of the bill, has argued that the status quo leaves consumers relying on products with “no testing, no standards and no oversight whatsoever.”

The legislation aims to replace what lawmakers estimate is a multi-billion-dollar illicit market with a regulated industry that requires product testing, labeling, and enforcement rules designed to keep cannabis away from minors. 

The new framework would place oversight of Virginia’s legal cannabis marketplace under the Virginia Cannabis Control Authority (CCA), the state agency responsible for licensing and regulating cannabis businesses.

Under the proposal, the CCA would administer the retail cannabis system, including issuing licenses, setting regulatory standards, and overseeing compliance for growers, processors, distributors, and retail stores.

The bill also establishes several key elements of the future marketplace:

• A state tax rate of 12.875% on cannabis sales
• An additional 3% local option tax that local governments could adopt
• Localities would not be allowed to opt out of the state’s legal cannabis marketplace, though they could choose whether to impose the additional local tax
• A cap on retail licenses and a tiered system for cultivation operations
• Seed-to-sale tracking along with product testing, packaging, and labeling requirements

The legislation also directs how a portion of cannabis tax revenue will be spent. Forty percent of the state’s cannabis tax revenue would go toward early childhood care and education, while 30% would be directed to the Cannabis Equity Reinvestment Fund, which supports people historically and disproportionately targeted by drug enforcement and provides grants to qualifying businesses.

Permit applications for cannabis businesses would begin in July 2026, with regulators expected to build out the licensing system and industry rules ahead of the planned retail launch.

Enforcement responsibilities would be split between agencies. Virginia’s Alcoholic Beverage Control Authority (ABC)would take the lead on enforcing illegal cannabis cultivation, sales, and distribution, while the Cannabis Control Authority would handle the licensing and regulation of the legal retail marketplace.

The legislation also outlines a longer-term restructuring of oversight. By 2028, the Cannabis Control Authority would be merged into ABC to create a combined regulator called the Virginia Alcoholic Beverage Cannabis Control Authority.

The bill removes several outdated marijuana penalties from state code but replaces them with new offenses tied to the regulated market. Selling or distributing cannabis without a license would be a Class 2 misdemeanor for a first offense, a Class 1 misdemeanor for a second, and a Class 6 felony for repeat violations.

New Hemp Restrictions Remain in the Bill

While the legislation focuses on building Virginia’s future recreational cannabis retail market, lawmakers also chose to keep new restrictions on hemp-derived THC products in the final bill.

Those rules tighten limits on intoxicating hemp products such as delta-8 and similar THC compounds that have been widely sold in vape shops, smoke shops, and specialty hemp retailers across the state.

Under Virginia law, hemp products sold at retail must meet strict THC limits. Products must contain no more than two milligrams of total THC per package, unless they meet a separate standard requiring a CBD-to-THC ratio of at least 25 to 1. That means a product must either stay under the two-milligram THC cap or contain at least 25 times more CBD than THC.

Supporters of the restrictions argue these rules are necessary to prevent hemp products from functioning as an unregulated cannabis marketplace operating outside Virginia’s marijuana laws. Critics, however, say the limits could significantly disrupt the state’s growing hemp retail sector, which expanded in part because Virginia legalized marijuana possession in 2021 but never created a legal retail system for cannabis sales.

The restrictions mean enforcement against certain hemp-derived products could increase even before the state’s regulated marijuana retail market is scheduled to launch in 2027.

That timeline means some hemp retailers could face tighter restrictions well before a legal cannabis marketplace exists to replace the products currently being sold.

The potential impact on Virginia’s hemp retailers is already becoming a major concern for business owners across the state. RVA Magazine will be speaking with industry advocates about what the changes could mean for small businesses that built their operations around hemp-derived products while the state’s legal cannabis market remained stalled.

Efforts to create a retail cannabis market have stalled repeatedly in recent years. Similar proposals previously passed the Democratic-controlled General Assembly but were vetoed by former Republican Governor Glenn Youngkin, who raised concerns about public health and youth access. 

The political landscape shifted after Spanberger took office in 2026 and signaled she would support legislation establishing a regulated cannabis marketplace. 

State Sen. Lashrecse Aird, who carried the Senate version of the bill, described the final legislation as the result of months of negotiation among lawmakers, regulators, and industry stakeholders.

She called the measure “a balanced path” toward launching Virginia’s adult-use cannabis market. 

If the governor signs the bill as expected, Virginia would join a growing number of states with a regulated recreational cannabis industry, moving beyond the unusual gap between legal possession and illegal sales that has defined the Commonwealth’s cannabis policy since 2021.

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