Cannabis Business in Virginia

Virginia’s cannabis industry is poised for significant growth with the introduction of a retail marijuana market under HB 698, which establishes the framework for retail cannabis sales. The Virginia Cannabis Control Authority (CCA) will oversee this market, with licenses scheduled to be issued starting on September 1, 2024. However, retail sales won’t commence until May 1, 2025. Local municipalities can opt out of allowing retail cannabis sales through referendums, but they cannot restrict cannabis possession, cultivation, or use.

Medical marijuana in Virginia is already operational, providing patients with access to cannabis products. The retail market is projected to generate substantial economic benefits, with estimates ranging from $698 million to $1.2 billion in annual economic activity and up to $274 million in tax revenue, according to the Virginia Marijuana Legalization Work Group. For those looking to enter the industry, exploring options for a cannabis business for sale could offer an opportunity to get involved in the state's growing market.

While adult sharing of cannabis in private settings is permitted, and home cultivation for personal use is allowed, certain activities, such as selling cannabis or exchanging it for goods or services, remain illegal. To navigate these complex legal guidelines, consulting with advisors who specialize in cannabis business law is highly recommended for those involved in the industry.

Plant-Touching Businesses in Virginia

Since adult-use cannabis retail sales have not yet commenced, the focus in Virginia remains on medical cannabis. The state operates under a structured system involving pharmaceutical processors, which serve as the only authorized growers and dispensaries for medical marijuana.

Medical Cannabis Pharmaceutical Processors and Dispensaries

Virginia allows a maximum of five pharmaceutical processor permits, with each permit designated for one of the health service areas established by the Virginia Department of Health. These pharmaceutical processors are vertically integrated, meaning they not only grow medical cannabis but also own and operate dispensaries within their respective areas. As of September 2024, there are 23 dispensaries spread across four of the five health service areas.

The Northwestern health service area does not currently have an operational dispensary, leaving patients in that region with fewer options for access. The pharmaceutical processors continue to be the primary entities responsible for supplying medical cannabis products to patients across the state, ensuring that the limited number of dispensaries are adequately supported.

Adult-Use Cannabis License Types in Virginia

1. Cultivation License – Allows businesses to grow and cultivate cannabis plants for the adult-use market, supplying products to manufacturers, wholesalers, or retailers.
2. Manufacture License – Permits companies to produce cannabis products, such as edibles, concentrates, and other retail marijuana items, using raw cannabis sourced from licensed cultivators.
3. Wholesale License – Authorizes businesses to buy and sell cannabis products in bulk, facilitating the distribution of retail marijuana and marijuana products between cultivators, manufacturers, and retailers.
4. Retail License – Enables businesses to sell retail marijuana and marijuana products directly to consumers in authorized retail establishments once adult-use cannabis sales commence.
5. Distributor License – Allows businesses to transport and distribute cannabis products between licensed entities, such as from cultivators to manufacturers or retailers, ensuring compliance with state regulations.
6. Supply Chain Manager License – Permits companies to oversee logistics and coordination of cannabis products throughout the supply chain, from cultivation to retail, optimizing the flow of products and regulatory compliance.
7. Testing Laboratory License – Authorizes laboratories to test cannabis products for safety, potency, and quality standards, ensuring products meet state requirements before reaching the market.

CBD and Hemp Business in Virginia

In Virginia, hemp-derived CBD oil that contains no more than 0.3% THC is legal. Products containing CBD derived from marijuana are not legal. However, patients registered in the state's medical cannabis program are permitted to buy CBD oil that comes from marijuana.

The Virginia Department of Agriculture and Consumer Services (VDACS) is the lead agency responsible for the regulation of hemp and CBD in the state. CBD products intended for human consumption are approved by VDACS and include products such as oils, gummies, and tinctures. The Food Safety Program at VDACS is responsible for ensuring that any food product manufactured in the state is safe for people to consume.

Business Licensing

The VDACS issues registrations to individuals and entities for growing, processing, and handling hemp. Some of the business license types available in the state include:

• Grower Registration: allows a person to grow and harvest hemp and requires proof of ownership or authority to use the land for cultivation. Growers must submit an application with a fee and are subject to background checks.
• Processor Registration: allows the holder to legally convert hemp into hemp products. Applicants must submit an application with a fee, list the raw materials and finished products, and are subject to a background check.
• Dealer Registration: allows a person to temporarily possess hemp that is not processed and will not be processed by the dealer. This registration is not intended for retail establishments selling hemp products. Applicants must complete an application with a fee and are subject to a background check.

Retailers wishing to sell hemp-derived products intended for consumption by humans must submit an Edible Hemp Products Disclosure Form to VDACS. Furthermore, a VDACS Food Permit may be required unless the establishment is exempt. A Food Permit is required for manufacturers of food products. Beginning on November 15, 2024, VDACS will require businesses selling hemp products intended for human consumption to obtain a Regulated Hemp Product Retail Facility Registration.