1. Understand regulatory and legal requirements. Do market research.

Research the laws and regulations governing adult-use and medical-use cannabis for more information about the regulatory requirements for licensure where you want to start your business.

Virginia Cannabis Legalization

In 2019, Virginia became the 33rd state to launch a medical cannabis program with five vertically integrated licenses (pharmaceutical processors). Virginia’s first medical cannabis dispensary began operations in October 2020.

On April 8, 2021, Virginia Gov. Ralph Northam’s administration announced an adult-use cannabis legalization plan. Retail sales could begin May 1, 2025, but the state could start accepting dispensary applications as early as September 2024.

Virginia Cannabis Market

2. Decide the type of cannabis business. Choose a location. Check local zoning regulations.

Cannabis Licenses Types Available in Virginia

Cannabis Delivery in Virginia

Medical cannabis delivery services became legal under the provisions of HB 933 for patient and caregivers registered with the state and with a valid written medical cannabis certification.

Cannabis Delivery Service by State

3. Develop a solid cannabis business plan. Secure financing.

Initial application requirements include business and marketing plans related to the operation of the pharmaceutical processor or the sale of cannabis products. A typical cannabis business plan outline includes sections such as Executive Summary, Market Overview, Sales Strategy, Operating Plan, Organizational Structure (+ Diversity Plan) and Financial Plan.

4. Submit the initial application. Pay application fees.

The application process for permits shall occur in three stages: submission of initial application, award of conditional approval, and grant of a pharmaceutical processor permit. An applicant shall pay the required fees and provide information in a form and manner as prescribed by the Board, which may include, but is not limited to the following:

• The name and address of the applicant and the applicant’s owners.
• The location within the health service area established by the State Board of Health that is to be operated under such permit.
• Detailed information regarding the applicant’s financial position to demonstrate the financial capacity of the applicant to build and operate a facility to cultivate cannabis plants.
• Details regarding the applicant’s plans for security to maintain adequate control against the diversion, theft, or loss of the cannabis plants and the cannabis products.
• Documents sufficient to establish that the applicant is authorized to conduct business in Virginia and that all applicable state and local building, fire, and zoning requirements and local ordinances are met or will be met prior to issuance of a permit.
• Any business and marketing plans related to the operation of the pharmaceutical processor or the sale of cannabis products.
• Text and graphic materials showing the exterior appearance of the proposed pharmaceutical processor.
• A blueprint of the proposed pharmaceutical processor that shall show and identify (i) the square footage of each area of the facility; (ii) the location of all safes or vaults used to store the cannabis plants and products; (iii) the location of all areas that may contain cannabis plants or cannabis products; (iv) the placement of walls, partitions, and counters; and (v) all areas of ingress and egress.
• Information necessary for the board to conduct a criminal background check on the facility owners with 5.0% or greater ownership.

5. Receive conditional approval. Pay permit fees.

If granted conditional approval, an applicant shall have one year from date of notification to complete all requirements for issuance of a permit, to include employment of a PIC, responsible party, and other personnel necessary for operation of a pharmaceutical processor, construction or remodeling of a facility, installation of equipment, and securing local zoning approval.

6. Obtain the required permits. Comply with all state and local laws.

The board may issue a permit when all requirements of the board have been met, to include:

• Designation of a pharmacist-in-charge and responsible party;
• Evidence of criminal background checks for all employees and delivery agents of the pharmaceutical processor to ensure compliance with § 4.1-1602 of the Code of Virginia;
• Evidence of utilization of an electronic tracking system; and
• A satisfactory inspection of the facility conducted by agents of the board.

Before the board issues any permit, the applicant shall attest to compliance with all state and local laws and ordinances.

7. Keep track of your ongoing compliance requirements.

If the cannabis cultivation facility is not operational within 180 days from the date the authorization is issued, the board shall rescind the authorization unless an extension is granted for good cause shown.

If the cannabis dispensing facility is not operational within 90 days from the date the permit is issued, the board shall rescind the permit unless an extension is granted for good cause shown.

Virginia Cannabis Taxes

Virginia consumers are required to pay a 5.30% sales tax on every purchase. There is no additional excise tax on medical marijuana in Virginia. Recreational cannabis sales will be taxed at 11.625% (state 8%, local 2.5% and 1.125% for K-12 education).

Main steps in short

• Understand regulatory and legal requirements. Do market research.
• Decide the type of cannabis business. Choose a location. Check local zoning regulations.
• Develop a solid business plan. Secure financing.
• Submit the initial application. Pay application fees.
• Receive conditional approval. Pay permit fees.
• Obtain the required permits. Comply with all state and local laws.
• Keep track of your ongoing compliance requirements.