Part 4: The Production and Sales of Cannabis in Virginia

Written By: Kristina Keech Spitler, Esq.

This article provides a high-level overview of the new legal landscape in Virginia related to the production and sale of cannabis and the opportunities out there for entrepreneurs.

For perspective, the Virginia General Assembly has only approved four (4) companies to legally process pharmaceutical cannabis for medical use, with one additional permit authorized, but unissued. The cultivation of hemp is currently allowed under a regulated process. And as of July 1, 2021, personal consumption and home cultivation of marijuana have been decriminalized to a large extent on the state level here in Virginia. Notably, the use, sale, and possession of cannabis over 0.3% THC in the United States remain illegal under federal law, despite laws in many states permitting it under various circumstances.

While all of this represents progress, in the overall push for legalization, we are still years away from state legalization of the production and sale of retail cannabis. For those interested in participating in this budding industry, keep in mind that you will need a license issued by the Cannabis Control Authority, which many anticipate will be much more challenging to obtain than an alcohol license.

The specific requirements for those license applications will not be disclosed publicly until July 1, 2022, with the first applications expected to be accepted July 2023 and retail sales expected to finally become legal in 2024. So while two years may seem like a long way away, if you are interested in being competitive in the license application process, you need to start positioning yourself now.

The state is likely to issue less than 1,000 licenses, which will be split between certain levels of the cannabis industry. It is anticipated that there will be 450 licenses available for cultivators, 60 for product manufacturers, 25 for wholesalers, and 400 for retailers. The application process is expected to favor applicants who demonstrate social equity, public health, and public safety priorities.

While this certainly provides some reason for optimism for those hoping to play a part in the industry, it’s important to remember that the regulatory framework and path towards legalization does not become effective until the future General Assembly and Governor approve the legislation in 2022. That said, if you are serious about getting a permit and being on the front end of the marijuana industry boom in Virginia, it’s important to surround yourself with professionals that can make your vision a reality. One of the old rules of thumb for aspiring entrepreneurs is to surround yourself with a decent lawyer and a good accountant.

VFN is one of the most highly regarded law firms here in Northern Virginia, with seasoned and well-connected attorneys who can help you establish your position in this state’s cannabis industry. Our services will be invaluable to clients, who will need to

1. Establish a legal entity and presence here in the Commonwealth to become a qualified applicant;
2. Obtain financing through investor relationships and/or financial institutions to secure required capital to be considered for licensure;
3. Purchase the real estate and secure proper zoning and approvals required for your business
4. Create solid commercial sale/purchase contracts to ensure payment and minimize risk exposure; and
5. Establish employment procedures to ensure your business runs smoothly.

I have already been advising clients on how to prepare themselves for the permit application process for the past few years, which has been an exciting and engaging experience for me. I am excited to see what the future holds in this new industry and to be working with clients on the front lines. If you need me or want more information, please feel free to give me a call at 703-479-3181, reach out to me by email at tblaser@vfnlaw.com, or visit my attorney page at /team/tyler-j-blaser/.