How to Open a Dispensary in Virginia

How to Open a Dispensary in Virginia

April 17, 2021 Licensing 0

Are you wondering how to open a cannabis dispensary in Virginia? This page is intended to keep you up to date on the latest news and information relevant to opening a cannabis business in Virginia. This includes helpful insights on what is to come next for Virginia. 

On Wednesday, 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. As such, Virginia is the 17th American state, and the first state in the South, to legalize adult cannabis consumption. Here’s why:

  • In a recent poll, 68% of Virginia voters (including majorities of Republicans and Democrats) were in favor of legalizing marijuana for recreational use by adults in the state.
  • Speaker Eileen Filler-Corn praised the House and the Senate for their “strong step” in legalizing cannabis sale and possession within the state, adding that this move will make VA’s criminal justice system “fairer,” while helping to end the targeting of people of color over cannabis possession
  • VA’s identical bills, HB 2312 and SB 1406, will establish a system for legalizing, taxing, and regulating adult-use cannabis. Marijuana legalization in Virginia could result in hundreds of millions of dollars in tax revenue.  

On February 27, 2021, HB 2312/SB 1406 passed the House and Senate in final votes. The provisions include:

  • The legalization of possession of up to one ounce of marijuana 
  • The start of legal cannabis sales 
  • Regulations going into effect to control Virginia’s marijuana marketplace 

And as it pertains 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 percent of fees.
  • Cannabis Control Authority – This will create an authorized body in July 2021 for regulating the adult-use cannabis market in Virginia. A five-member Board of Directors will be in charge of issuing regulations, granting, suspending, or revoking licenses, and issuing fines.

The Opportunity Size

Marijuana Business Daily projects that the recreational market in Virginia will generate $400 million to $500 million by 2022 and $1.2 billion-$1.4 billion by 2025. With nearly 9 million residents, it’s evident that Virginia, the 12th most populous state, will be one of the larger markets to start a cannabis business. 

Based on findings from the Joint Legislative Audit and Review Commission, Virginia’s marijuana industry could eventually create more than 18,000 jobs, and could bring in an estimated $177–$300 million (more than twice the amount the state of Colorado gets) in net tax revenue if the state were to set the marijuana sales tax at 25 percent ($147–$250 million at 20 percent). 

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 the time comes that you want to set up a cannabis business in the state. You can expect us to keep this section updated 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 patients suffering from intractable epilepsy to access cannabidiol (CBD) 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.

Since then, Virginia’s medical cannabis program has grown to about 9,000 patients, with nearly 500 new applications submitted each week. Applications for Pharmaceutical Processor Permits for HSA I closed on December 4, 2020, and the awarding of conditional approvals will be finalized on March 30, 2021.

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

According to the Commonwealth of Virginia’s state website, the law authorizes the Virginia Board of Pharmacy (Board) to grant “conditional approval for no more than one pharmaceutical processor for each of the five health service areas. Those health service areas are established by Virginia’s Board of Health.”

Application Fee

Interested applicants must submit a non-refundable application fee of $10,000 along with their initial application, as listed in 18VAC110-60-20. There is also an initial permit fee of $60,000, submitted alongside the application and any other required documentation.

An application for initial permit, required documentation, and any reinspection fees (if applicable), must be submitted to the Board prior to the inspection. 

Recreational Use Legalization

As stated above, Virginia’s Democratic-controlled Legislature passed a bill legalizing the possession of small amounts of marijuana. Virginia Gov. Ralph Northam’s push to move up the timeline for the marijuana legalization bill (which was originally 2024) was driven by the need to “correct the over policing of Black Virginians in possession crimes.” Here are the links to Virginia’s HB 2312 and SB 1406 bills. 

Requirements To Get a Cannabis Business License In Virginia

Here is what is known so far in terms of the requirements in order to open a dispensary in Virginia.

Recreational License Requirements

As per the marijuana legalization bill, a five-member Board of Directors will approve labs, as well as establish the number of licensees. Without counting existing medical cannabis businesses and hemp processors, these numbers could not exceed:

  • 400 retailers
  • 25 wholesalers
  • 450 cultivators
  • 60 product manufacturers

There will also be two types of cultivation licenses: 

  • Class A licenses, which are capped at a certain number of square feet or plants. 
  • Class B would be limited to 1% THC. 

The board will establish criteria to evaluate new licensees based on the density of the community’s retail stores. It will also take any negative public health outcomes in the community into consideration.

The Virginia Cannabis Control Authority may begin accepting applications for licenses on July 1, 2023. From that date until December 31, 2023, preference will be given to qualified “social equity applicants,” defined as 66% or more owners (a) with a prior cannabis conviction or a close relative with a cannabis conviction, (c) living in an area with disproportionate cannabis arrests or under economic distress, or (c) who graduated from a Virginia HBCU.

It is apparent that apart from direct cannabis expertise, there are many other topics that you must be well-versed on 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.

 

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