The Public Policy Committee follows a variety of topics from local, state and federal governments. Here is one of the items of note we’re following:
Legislative Update: Virginia Moves Toward a Full Adult-Use Retail Cannabis Market
After months of hearings, the Joint Commission on the Future of Cannabis Sales is preparing to unveil its final legislative proposal to create Virginia’s first regulated adult-use retail cannabis market. This represents the most significant movement on cannabis policy since possession and home cultivation were legalized in 2021 — but with no legal retail system in place.
The final proposal will be introduced ahead of the 2026 General Assembly session, with retail sales targeted to begin November 1, 2026, pending passage and approval by Gov.-elect Abigail Spanberger, who has publicly stated support for establishing a legal retail system.
Key Components of the Retail Market Proposal
- End of Local “Opt-Outs”
Earlier drafts allowed counties and cities to ban cannabis sales through referendum.
That provision has been eliminated.
Lawmakers argue that “dry” zones would:
- Fuel illicit markets
- Undermine public safety
- Block equity-driven reinvestment goals
Localities will still maintain authority over zoning, siting, buffer zones, and licensing requirements.
- Expanded Local Tax Authority
Localities will be able to levy up to 3.5% in excise tax (up from prior drafts capped at 2.5%).
State tax remains at 8%, with new provisions allowing certain business deductions despite federal illegality.
The proposal also removes the cannabis-specific tax on paraphernalia and shifts those items back under standard sales tax rules.
- Licensing Prioritizes Small, Virginia-Based Businesses
One of the most consequential elements of the plan is a licensing system designed to decentralize ownership and bolster small operators:
- Up to 50% of initial licenses will be reserved for “micro-businesses.”
- All companies will be limited to five total licenses across retail and grow/processing.
- Even a 1% ownership stake by a large operator counts toward that limit, making consolidation difficult.
- A direct-to-consumer delivery license would allow micro-businesses to deliver to adults and medical patients — overseen by the Virginia Cannabis Control Authority (CCA).
The stated goal: hundreds of new Virginia-owned cannabis businesses, stronger ties to agriculture, and reinvestment in communities disproportionately impacted by past drug enforcement.
- Strengthened Testing, Tracking, and Consumer Safety Rules
Virginia’s seed-to-sale tracking system through Metrc is already live, and recent medical sales showed nearly $30 million across 256,000+ transactions in a single month.
The retail bill builds on that infrastructure with:
- Tighter labeling standards
- Clearer definitions for delivery agents
- Higher testing requirements for edibles, topicals, and vape products
- Regulatory oversight intended to create one of the most transparent and controlled markets in the country
Proponents argue this combination is essential to shrinking the illicit market that has expanded since legalization without retail sales.
- Labor & Workforce Provisions
Labor unions, including UFCW Local 400, have praised the bill’s emphasis on:
- Small business access
- Worker protections
- Potential labor-peace agreements
- Guardrails against monopolization
Unions testified that states lacking labor protections have seen cannabis employees face retaliation for organizing — something they hope Virginia’s structure helps prevent.
What Comes Next?
The Commission will formally present the proposal at its next meeting, clearing the path for introduction in the 2026 General Assembly.
If successful, Virginia would become a national model as the first Southern state to adopt a full adult-use retail market with explicit equity and small-business priorities.
But the process is far from finalized.
Opponents will raise concerns about:
- Youth access
- Public health
- Enforcement challenges
- Potential strain on local resources
And the success of rollout will depend heavily on the CCA’s capacity to balance access, equity, and safety.
Concerns Raised by the Business Community
While many groups support a well-regulated marketplace that pulls sales out of the illegal sector, several major business organizations — including the Virginia Chamber of Commerce and the Virginia Manufacturers Association — have raised significant employer-related concerns.
Their key points include:
- Workplace Impairment Cannot Be Reliably Tested
Unlike alcohol, cannabis impairment cannot be measured by a simple breath or blood test.
Employers report that:
- Employees could arrive to work high — particularly after consuming edibles — without any objective test to confirm impairment.
- Safety-sensitive jobs (e.g., manufacturing, warehouse operations, trucking) face heightened risk, since a worker operating machinery or forklifts under the influence poses serious safety liabilities.
- No Clear Statutory Tools for Employers
Business groups want clarity on:
- Employers’ right to maintain zero-tolerance policies
- Ability to remove impaired workers from job sites
- Protections for companies in the event of workplace accidents involving cannabis use
- Liability standards in civil or workers’ compensation cases
- Risk of Increased Incidents and Claims
Manufacturers note potential impacts on:
- Workplace accident rates
- Insurance and workers’ compensation claims
- Productivity and equipment safety
They emphasize that until impairment testing improves, legalization will require heightened caution in workplace policy development.
Bottom Line
Virginia is closer than ever to launching a full adult-use retail cannabis market — a major economic shift with significant implications for agriculture, small business creation, tax revenue, and public health.
But as the Commonwealth advances toward a 2026 retail launch, lawmakers will also need to address employer liability, workplace safety, and impairment testing gaps to ensure businesses and workers have the clarity they need.
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