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A medical cannabis dispensary in Virginia may only operate under a pharmaceutical processor license allowed in a Health Service Area (HSA). Hence, anyone who intends to open a medical cannabis dispensing facility in the Commonwealth must obtain a pharmaceutical processor permit from the Virginia Board of Pharmacy (BOP) when the BOP issues a Request for Application (RFA). No retail cannabis dispensary is permitted to open or operate in the Commonwealth until the legal sale of recreational marijuana begins. Anyone looking to open a medical cannabis dispensing facility needs adequate funding, as running a dispensary in the Commonwealth is capital intensive.
The Virginia marijuana industry promises several opportunities once the legal sale of recreational cannabis begins. A report by the Virginia Joint Legislative Audit and Review Commission (JLARC) projects that the state may generate up to $300 million in revenue from adult-use cannabis in its first 5 years of legal sales. An independent report also forecasts that the state's recreational marijuana market may hit upwards of $500 million in cannabis sales in 2024 if the adult-use market launches as planned. Similarly, a 2020 report to the Virginia General Assembly and the Governor of Virginia suggests that a legal recreational cannabis industry could be worth $689 million to $1.2 billion yearly in economic activity, with a potential of about $274 million in tax revenues annually at industry maturation.
While Virginia does not have a mandatory patient registry, the number of registered qualifying patients has increased since the expansion of the state's medical marijuana program in 2020. As of December 2022, the state is estimated to have about 45,000 registered medical cannabis patients. According to reports by the Virginia Board of Pharmacy, monthly dispensations of medical cannabis products increased almost eight times between January 2021 and August 2022. About 562,000 dispensations of medical marijuana products were made in 2021, while it was over 1.4 million in 2022, an almost 50% change. The opportunities in the Virginia cannabis industry are massive, making the Commonwealth a good place to open a marijuana dispensary.
The two types of dispensary licenses in Virginia are:
Anyone interested in getting a Virginia medical cannabis license must apply for a pharmaceutical processor permit. The state uses a scoring system to award medical cannabis licensees, including dispensary licenses. The maximum is 275 points. An applicant's score for each component is determined by the totality of the response to the corresponding component. Below are the steps required to obtain this permit:
Department of Health Services Board of Pharmacy Perimeter Center 9960 Mayland Drive, Suite 300 Henrico, VA 23233
The Board of Pharmacy (BOP) wants the application and required attachments provided in the following ways:
An ad hoc committee will rack each application submitted by interested entities after reviewing and scoring them. Afterward, the committee will recommend to the BOP the issuance of conditional approval to the highest-ranked applicant. Sometimes, the ad hoc committee may recommend an otherwise qualifying alternate applicant for the Board's consideration should the applicant with the highest-ranked score decide to withdraw their application. The BOP will then issue conditional approval to any applicant that, in its opinion, had the best application. Any applicant who received conditional approval must complete and submit another application for a pharmaceutical processor permit, checking the "Initial Permit" box. They must also indicate the requested facility inspection date and designate the pharmacist-in-charge.
Per state law, the BOP may only issue or renew one permit in any year for each HSA. As of 2022, one permit has been awarded to a facility in four of the five HSAs created by the Board of Pharmacy, leaving only HSA I with no dispensary licensee. On September 23, 2023, the BOP rescinded the RFA originally issued on September 25, 2020, for a pharmaceutical processor license in HSA I. The RFA will now be executed by the Virginia Cannabis Control Authority (VCCA). The VCCA is billed to assume the management of the Commonwealth's Medical Cannabis Program by January 2024. No retail marijuana store license has been issued in the Commonwealth.
Preparing a business plan before applying for a dispensary license in Virginia is recommended. A business plan reels out the objectives of a proposed dispensary and how it plans to achieve set goals. It shows a detailed strategy for the dispensary from the operational and financial outlooks and can help attract investment for a new dispensary. Any business plan prepared by a proposed dispensary in Virginia should have the following elements:
The Board of Pharmacy also requires prospective dispensary owners to submit security plans as part of their license application. A Virginia dispensary security plan should contain the following details:
No municipality in Virginia may prohibit medical marijuana dispensary operations within its borders. However, anyone who plans to open a dispensary anywhere in the Commonwealth must provide documents sufficient to establish that they are authorized to conduct business in good standing. Similarly, they must prove that all local ordinances and applicable local and state fire, building, and zoning requirements have been met or will be met before the issuance of a dispensary permit. Under the Commonwealth adult-use cannabis law, municipalities had a short window (between July and December 2022) to hold public referendums on whether to permit recreational marijuana dispensaries within their borders.
How long it takes to process a Virginia dispensary permit during the licensing application period is determined by the Board of Pharmacy. It generally takes a few months.
In Virginia, a medical cannabis dispensary should be located in places accessible to patients and compatible with other residential and commercial structures in the immediate vicinity. Typically, it must operate in one of the five HSAs established by the Board of Pharmacy and may not be within 1,000 feet of a daycare or school. It is essential to understand the rules set by municipalities, including their location requirements (if any), before opening a cannabis dispensary. Location requirements for retail marijuana dispensaries in the Commonwealth are not yet known.
Yes. A pharmaceutical processor licensee in Virginia can cultivate, manufacture, and sell medical marijuana from one location and operate five more cannabis dispensaries at separate locations within the same HSA. However, each additional dispensing location must obtain the BOP's permission.
Insurance can help protect a dispensary against unforeseen losses, but it is not a mandatory requirement for licensed marijuana dispensaries in Virginia. However, dispensary owners who wish to protect their investments in the Commonwealth may consider purchasing one or more of the following insurance policies:
Factors such as coverage limits, dispensary size, the location of a dispensing facility, coverage type, and the owner's experience affect how much a Virginia dispensary will spend on insurance costs.
Virginia is currently developing a social equity program known as the Cannabis Equity Business Loan Program for its recreational marijuana industry. Under this program, qualified social equity marijuana licensees, including dispensary licensees, will be able to access loans to promote cannabis business ownership. When it is fully developed, qualified social equity cannabis dispensary licensees will get low-interest business loans and enjoy waived or reduced Virginia marijuana application or license fees.
Per Section 4.1-606 of the Code of Virginia, a social equity dispensary license applicant is an individual or entity who has lived or domiciled in the Commonwealth for no less than 12 months and is either any of the following:
Sales of medical marijuana in Virginia are exempt from sales and use tax. The sale of recreational cannabis has yet to begin in the Commonwealth. However, in addition to the sales and use tax, a 21% excise tax will be imposed on retail marijuana sales made by licensed retail marijuana stores once the legal sale of adult-use cannabis starts. Local municipalities may also adopt ordinances to impose a 3% tax on any sale taxable under Virginia cannabis tax. The VCCA has been earmarked to collect these taxes once the legal sale of recreational cannabis begins.