Virginia legislators are debating whether to charge existing medical cannabis operators a multimillion-dollar fee to convert to adult-use licenses. Critics call it excessive. However, recent transactions and operator statements suggest that $10 million is a bargain for what they are receiving: guaranteed entry into a multibillion-dollar market without competing in a lottery, the state’s only vertically integrated licenses, higher canopy and retail limits, and pre-built infrastructure that requires minimal conversion investment.
The market has set the price
The private market has already valued these licenses far above the state’s asking price. In July 2024, Verano Holdings acquired one of Virginia’s five medical licenses for $90 million.
Even more telling is what happened in December 2025. Curaleaf entered a deal to buy The Cannabist Company’s Central Virginia license for $110 million. Less than three weeks later, they were outbid by Millstreet Capital, which offered $130 million in cash and stock — a deal with a total enterprise value of nearly $160 million.
In total, The Cannabist Company liquidated its Virginia medical holdings for approximately $250 million. When a single operator can extract a quarter-billion dollars from the private market for regional medical licenses, a $20 million conversion fee for statewide adult-use privileges is a bargain, not a burden.
‘We don’t have to do anything to these stores‘
Operators are not hiding the fact that they are already ready. In a November 2025 interview on The Dales Report, Jushi Holdings CEO Jim Cacioppo was candid about his company’s readiness for a Virginia rollout. Discussing their “overspending” on medical infrastructure, he noted that the investment would pay off: “It’ll flip the other way because we don’t have to do anything to these stores. All we have to do is hire some people.”
This admission reveals what the $20 million fee is actually purchasing: a turnkey monopoly. While independent businesses will spend years securing zoning, building facilities and passing inspections, the medical operators have infrastructure that is already built, tested and scaled for adult-use volumes. The fee compensates Virginia taxpayers for handing five companies a multi-year head start.
The myth of automatic entry
Perhaps the most dangerous misconception in Richmond is the idea that medical operators are “owed” access to the adult-use market. They are not.
Their current licenses are contracts with the commonwealth to serve patients — nothing more. The state could require them to apply for adult-use licenses alongside everyone else, subject to the same lottery odds and license caps. By allowing “conversion” at all, Virginia is creating a new, immensely valuable asset class out of thin air and handing it exclusively to five companies.
What the fee actually buys
Medical operators bypass Virginia’s lottery system entirely. While hundreds of Virginia residents will compete for limited licenses, existing operators receive automatic conversion.
They also receive the only vertically integrated licenses the state will issue — controlling cultivation, processing and retail under one roof. This “seed-to-sale” structure is prohibited for new entrants to prevent monopolies, yet the existing operators are being grandfathered into this lucrative model.
Just as valuable is the operational head start. Even if Virginia mandates a simultaneous launch date, medical operators will begin with years of operational data, stabilized supply chains, dialed-in cultivation genetics and veteran compliance teams. New independent operators will spend their first 18 months post-launch navigating startup chaos — hiring staff, writing SOPs, learning seed-to-sale tracking systems — while the conversions already have mature, tested operations ready to scale. That operational advantage is worth millions and cannot be replicated overnight.
A clear choice
Virginia faces a clear choice: Treat adult-use licensure as the separate, premium asset that it is, or surrender to the narrative of entitlement.
The data speaks clearly: When operators pay $130 million to acquire a regional medical license, they are pricing in the “guarantee” of adult-use conversion. If the market value guarantee is nine figures, the commonwealth should not be giving it away for a fraction of that price.
A $20 million fee isn’t punishment — it is the bare minimum price for a privilege that no one else in Virginia will ever have.
Max Jackson is the founder of Cannabis Wise Guys and specializes in translating between cannabis operations, investment and public policy. He has provided expert testimony to the Virginia legislature on preventing market consolidation in emerging cannabis markets. He can be reached at Max@cannabiswiseguys.com.
Chelsea Higgs Wise, MSW, is the co-founder and executive director of Virginia-based nonprofit Marijuana Justice. Wise serves on the national United for Marijuana Decriminalization Coalition steering committee, as well as the Global Justice in Emerging Cannabis Cohort.