RICHMOND, Va. (WSET) — Virginia’s long-running debate over marijuana legalization is entering a new phase as Gov. Abigail Spanberger and Democratic lawmakers have reached a compromise to establish a legal retail cannabis market in the Commonwealth.

The proposal, which is included in the state budget, would move Virginia out of a legal gray area that has existed since 2021. While marijuana possession and use are legal in Virginia, retail sales remain prohibited.

We have agreed to a proposal that will create a safe, legal and well-regulated cannabis market here in the Commonwealth of Virginia,” Spanberger said.

Under the proposal, retail cannabis sales would begin in July 2027 if the state budget is approved. The plan would allow up to 350 retail locations statewide, with stores opening in phases rather than all at once.

The proposal also includes a 6 percent sales tax on cannabis purchases, which would increase to 8 percent by 2029.

“We will do it in a way that protects consumers, tamps down with the goal of eliminating the illicit market with clear enforcement and regulatory authority, and it creates a more competitive market for small businesses and farmers,” Spanberger said.

Supporters say the measure would improve public safety and provide consumers with a regulated marketplace.

It is about public safety, consumer protection, and finally giving Virginians a legal marketplace that can compete with and displace the illicit market,” said Sen. Lashrecse Aird, D-13th District.

However, the proposal is facing opposition from some Republican lawmakers, including Sen. Mark Peake, R-8th District, who argues the process is flawed because the policy is being advanced through the budget rather than through standalone legislation.

“Don’t put this in the budget,” Peake said.

Peake criticized lawmakers for pursuing the measure through budget negotiations after previous cannabis legislation failed to become law.

“You’re supposed to pass legislation. They did pass legislation. The governor made amendments to it, and they didn’t even consider her amendments, and then she vetoed it. And now they’re gonna throw it in the budget? It’s a terrible process,” Peake said.

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“This is what good governing and collaboration looks like, bringing people together, listening carefully, focusing on solutions that are practical, enforceable, and in the best interest of Virginians,” Spanberger said.

Supporters of the proposal say a regulated retail market would help reduce illegal cannabis sales, but critics remain skeptical.

The black market’s gonna continue, and so it’s not gonna make anything safer,” Peake said.

The proposal would direct cannabis tax revenue toward early childhood care and education, K-12 education, and behavioral health programs focused on substance use disorder prevention and treatment.

Peake questioned whether the funding would provide additional resources for those programs.

“They’re not really doing anything. It all comes out of the general fund. They’re going to take money that would have gone to schools and now spend it on something else,” he said.

The retail cannabis market would not become legal unless the state budget is approved. Virginia lawmakers have until June 30 to pass the budget.