See our FAQs: Virginia’s marijuana laws explained.
Many years ago, the old “Grin and Bear It” newspaper cartoon showed a group of scientists, with lab coats and clipboards, gathered by the side of the road at a traffic light. A passerby had asked them what they were doing. One of the scientists replied: “We’re trying to determine the shortest period of time possible — the time between when the light changes and the driver behind honks.”
Virginia is about to conduct that same experiment, with the shortest period of time possible being the time between when the General Assembly’s bill legalizing retail sales of cannabis arrives on Gov. Glenn Youngkin’s desk and when he reaches for his veto pen. Cannabis is the preferred name today for what people old enough to remember the “Grin and Bear It” cartoon once called marijuana. Or pot. Or weed. Or the devil’s lettuce. Or, my personal favorite, jazz cabbage.
Whatever we call the plant, Youngkin last year vetoed the bill legalizing retail sales of it. He signaled in his State of the Commonwealth Address that he had no interest in signing a retail bill this year. Even the legislators sponsoring the bill understand that it won’t become law, but they believe strongly in it anyway, so here we are. The legislature’s passage of the bill, and Youngkin’s veto of it, will make cannabis one of many issues in this fall’s governor’s race and House of Delegates races.
Maybe, depending on the outcome of those elections, Virginia will continue to be the only state in the country where personal possession of small amounts of cannabis is legal but retail sales of a legal product are not.
Someday, though, Virginia probably will legalize retail sales. Democrats want this — and so do many Republicans. They just didn’t vote for this particular bill because a) they know the governor will veto it so see no reason to do so, and b) they disagree with the details of how Democrats want to award retail licenses. The current situation seems untenable over the long term, and there seems no interest in recriminalizing the hippie lettuce — there’s another name — so the only way forward seems to be legalization.
This isn’t about that, though. This is about what happens once Virginia does someday legalize retail sales. Namely, what happens to all the stores that have popped up that are already distributing marijuana — sorry, old habit — in some way? Many of these are set up as “membership clubs,” but that “membership” often consists simply of being handed a membership card when you walk in the door. Others claim to be “adult share” stores, where the store will generously “share” some free weed if you buy an overpriced sticker. Attorney General Jason Miyares has issued a formal opinion that these “adult share” stores are breaking the law, but that hasn’t stopped them.
For some reason, Southwest Virginia has become the epicenter for these operations. You can now drive from Montgomery County to the Tennessee state line and find a cannabis outlet in every locality, often out on Main Street. Similar stores are popping up elsewhere. I was recently in the Higher Education store at Zion Crossroads in Louisa County, which was selling a green leafy material described as “White Truffle,” which the AllBud cannabis review site describes as a strain that “produces a quick-hitting head high that will clear your mind of worry.”
Under every bill introduced in Virginia to legalize retail sales of cannabis — indeed, in every state that has already legalized retail sales — retailers need licenses. The bill passed by the General Assembly this session capped that number at 350 across the state. If you need a mental comparison, that’s somewhat fewer than the number of state-owned liquor stores in Virginia. The bill doesn’t specify the costs of these licenses, something a state regulatory board would determine, but we know what they cost in other states. The application fees and license fees vary wildly from state to state, but in Maryland, our nearest example, the application for a basic retail store is $5,000 and if you’re successful, then be prepared to pony up another $80,000 for the actual license (which is good for six years). The Cure8 cannabis consulting firm estimates the costs of starting a cannabis dispensary that complies with all the details of Maryland law at about $500,000.
Let’s assume Virginia is someday roughly the same. What are legal, licensed retailers, who just shelled out north of half a million dollars, going to think of these unlicensed retailers who didn’t pay any of that — and, as a result, can charge less for an unregulated product? They’re not going to like that, are they? Of course not. So what are they going to do? They’re going to demand that law enforcement shut down these unlicensed retailers, something that law enforcement is generally avoiding now because a) few people are complaining and b) police have more pressing priorities about more dangerous things.
This is not a fantasy. This is exactly what other states have encountered. New York legalized retail sales in 2021; the first ones began in December 2022. New York, though, has been slow to issue licenses. By September 2024, it had awarded just 182 retail licenses in a state of 20 million people. The marketplace moves faster than government. Unlicensed retailers popped up like, well, weeds to serve the demand, and state officials seemed powerless to stop them. Politico reports that at one point there were an estimated 4,000 unlicensed retail cannabis outlets in New York City alone. The state had to set up an Illicit Cannabis Enforcement Task Force that has shut down “approximately 350” storefronts, according to its annual report, while city officials closed down 1,000 more. You don’t have to be a math genius to realize those numbers don’t add up.
California has had the same problem. The KayaPush accounting website reports that California has about 800 licensed retailers but an estimated 2,800 stores — meaning 75% of the state’s cannabis stores are operating outside the law. “Avoiding taxes and regulatory costs, unlicensed sellers can offer products at significantly lower prices,” the website warns. “Legal dispensaries, on the other hand, must contend with state and local taxes that can increase costs by up to 40%. As a result, licensed operators often operate on razor-thin margins — or even at a loss — to attract customers.” The bottom line: In California, weed is legal, but it’s hard to make money at it if you follow the law because the black market is still there, and a lot cheaper.
Like New York, California also created a Unified Cannabis Enforcement Task Force that in its first two years seized weed from “over 350 operations,” according to the governor’s office. However, 350 remains a lot less than the estimated 2,800 illicit retailers in the state.
The irony here is that two states that wanted to get out of the business of criminalizing cannabis by legalizing retail sales had to set up special government operations to deal with illegal retail sales.
Not every state with retail cannabis has had that problem. In Washington, the first state to legalize retail weed, there was just one instance of an illegal retail operation last year and only three in 2023, according to the state’s Liquor and Cannabis Board.
One difference might be that California and New York are widely regarded to have been slow in their rollout of licenses, and unlicensed retailers simply opened up and nobody stopped them. New York Gov. Kathy Hochul has called her state’s retail launch “a disaster” because it inadvertently led to all these illicit retailers selling marijuana.
“It’s not every street corner,” she said last year. “It is every other storefront. It is insane.”
Just across the Potomac from us, the District of Columbia legalized recreational weed a decade ago and is still dealing with unlicensed stores. Since last summer, authorities have “padlocked” 28 businesses distributing cannabis without a license, according to the city’s Alcoholic Beverage and Cannabis Administration.
Virginia has essentially become like two states (and one city) it usually doesn’t want to be like. The only difference is that California and New York took their sweet time between legalizing retail sales and actually starting them. D.C. apparently did a better job getting a market set up, but some retailers are still finding ways to evade the law. Virginia hasn’t even legalized retail sales yet, but already the marketplace is racing to meet the demand as it always has, no matter what the law says.
Want more politics and analysis? Sign up for West of the Capital, our weekly political newsletter that goes out Friday afternoons.
