How to Open a Dispensary in Virginia (in 2023)

Are you wondering how to open a dispensary in Virginia? The first medical cannabis dispensary in Virginia opened in August 2020, however, the debate regarding the start of recreational marijuana sales continues in the state. Opportunities to apply for a dispensary license in the state are expected to become available soon.

Virginia is the 17th American state and the first state in the South to legalize adult cannabis consumption. On April 7, 2021, the Virginia General Assembly voted to approve Gov. Ralph Northam’s proposed amendments to change the effective date of the adult-use legalization bill (HB 2312/SB 1406) from 2024 to July 1, 2021. 

On February 27, 2021, HB 2312/SB 1406 passed the House and Senate in final votes. The provisions includethe legalization of possession of up to one ounce of marijuana,  he start of legal cannabis sales, and  regulations going into effect to control Virginia’s marijuana marketplace. 

And in regards to Virginia dispensaries:

• Stores will be geographically dispersed, with their dispersion undergoing reassessment for every 100 licenses issued.
• Preference will be given to social equity applicants from July 1, 2023, until January 1, 2024, and regulators will waive a percentage of fees.
• The Cannabis Control Authority will create an authorized body in July 2021 to regulate the adult-use cannabis market in Virginia. 
• A five-member Board of Directors will be responsible for issuing regulations, granting, suspending, or revoking licenses, and issuing fines.

In 2022, the General Assembly failed to pass legislation to establish a market for the sale of recreational marijuana. The topic remains a point of discussion in the ongoing session of the General Assembly in January 2023. Two Republican legislators, Del. Keith Hodges and Del. Michael Webert, have proposed bills to establish regulations for a legal cannabis market, with bills HB 1464 and HB 1750 respectively.

On February 7th, 2023, the Virginia Senate passed a bill allowing the sale of adult-use marijuana. Sponsored by Senator Adam Ebbin, a Democrat, the bill was approved by a 24-16 vote in the Democratic-controlled Senate. Senator Ebbin’s proposal would permit recreational marijuana sales to commence on January 1, 2024 and would be sold through both established medical cannabis dispensaries and new businesses owned by residents from economically disadvantaged communities. 

The Opportunity Size

The recreational marijuana market in Virginia has the potential to generate between $1.2 to $1.4 billion by 2025, as projected by Marijuana Business Daily. Being the 12th most populous state in the country with nearly 9 million residents, Virginia presents a significant market opportunity for those looking to start a cannabis business. 

The Joint Legislative Audit and Review Commission also reports that the marijuana industry in Virginia could create over 18,000 jobs and generate between $177 to $300 million in net tax revenue if the sales tax is set at 25%.

Local Cannabis Restrictions & Laws

Are you looking to open a cannabis business in Virginia? You must consider what is allowed in the town or municipality you intend on starting your marijuana business. Local municipalities can determine hours, implement zoning and land use rules, and opt out of retail stores by voter referendum. This may be a challenge when you want to set up a cannabis business in the state. You can expect us to update this section with any particular local restrictions and challenges in the news as this market opens up. 

Medical Marijuana

In 2017, the state passed a law allowing registered patients with intractable epilepsy to access CBD products or THC-A oil. The following year, the law was significantly expanded to allow any medical condition (including Multiple Sclerosis, Parkinson’s Disease, Cancer, and Crohn’s Disease) to qualify; in 2019 and 2020, additional improvements were made. In 2021, the General Assembly passed legislation that added whole plant, “botanical” cannabis to the program (HB 2218/SB 1333) and protects patients from termination or discipline by their employers for medical cannabis consumption away from work (HB 1862). In short, Virginia is the 34th state to have a comprehensive medical cannabis law.

According to HB 933/SB 671, patients will no longer have to register with the Board of Pharmacy after July 1, 2022. After a patient’s written certification from a licensed practitioner, they will be authorized to shop at Virginia dispensaries. Registered agents, or individuals permitted to visit Virginia dispensaries and acquire medical marijuana products on behalf of patients, are still required to register with the Virginia Board of Pharmacy.

Medical Marijuana Licenses

In order to get a license to operate a dispensary in the state of Virginia, applicants are required to submit an application for a “Pharmaceutical Processor Permit.”

Virginia permits five pharmaceutical processors to grow, process, and distribute medical cannabis to registered patients in the five health service areas designated by the Department of Health.

Here’s information on the requirements to get started with your Medicinal Marijuana Business in Virginia.

Applications for pharmaceutical processor permits for HSA I closed on December 4, 2020, and the awarding of conditional approvals were finalized on March 30, 2021. Currently, no further applications are being accepted.

Application Fee

How much will it cost to open a dispensary in Virginia? Interested applicants must submit:

Application fee: $10,000 non-refundable, along with the initial application.

Initial permit fee: $60,000, along with the application and other required documentation.

An application for an initial permit requires documentation and any reinspection fees (if applicable) and must be submitted to the Board before the inspection. 

Recreational Use Legalization

According to a poll, 68% of Virginia voters favored legalizing marijuana for recreational use by adults in the state.

In April 2021, the Virginia legislature enacted identical legalization bills, HB 2312 and SB 1406. The move authorized the possession of up to one ounce of cannabis and the cultivation of up to four plants per home beginning on July 1, 2021, instead of 2024 as originally indicated in the law.

HB 2312 and SB 1406, will establish a system for legalizing, taxing, and regulating adult-use cannabis. Marijuana legalization in Virginia could result in millions of dollars in tax revenue.  

Cannabis Business Opportunity

Recreational Marijuana License Types

There are four types of licenses available: dispensary, wholesaler, cultivator, and product manufacturer. There will be a limit on the number of licenses available for each category, with a maximum of 400 dispensary licenses, 25 wholesaler licenses, 450 cultivator licenses (split between Class A and Class B), and 60 product manufacturer licenses.

Requirements To Get a Cannabis Business License In Virginia

What’s known so far about opening a dispensary in Virginia: 

The Virginia Cannabis Control Authority will evaluate new license applications based on retail store density and potential negative public health impacts. Preference for licenses from July 1, 2023 to December 31, 2023 will be given to “social equity applicants,” who are 66% or more owners with a prior cannabis conviction or a close relative with a conviction, living in an area with disproportionate cannabis arrests or under economic distress, or who graduated from a Virginia HBCU.

Final Thoughts

It is apparent that apart from direct cannabis expertise, there are many other topics that you must be well-versed in if you plan to run a cannabis business in the state. Any gap in your knowledge will likely affect your long-term success. 

By adding yourself to our Virginia Cannabis Mailing List (below), we will keep you updated on how to open a dispensary in Virginia and all relevant VA news that matters, not so easy to find news, and commentary based on Virginia Legalization below.