The 2024 Guide On How to Open a Dispensary in Virginia

Marijuana used to be seen with an incredibly different point of view, seeing as it was an illegal substance. Once a level 1 narcotic, today, many states have legalized it for medicinal and even recreational use—including Virginia. 

Nowadays, it’s all in the past, with aspiring marijuana entrepreneurs asking how to open a dispensary in Virginia. You’ll be surprised to know that sometimes it’s simply a matter of lining up and paying fees or taxes in state offices.

Here’s everything you need to know about the legal steps of opening a dispensary in Virginia. 

Current State of the Cannabis Laws in Virginia

Virginia enacted its cannabis laws back in July 2021. These laws provide answers to questions such as how much weed you can carry or if edibles are legal in Virginia. Read on below to get the answers to the following:

How Much Cannabis Can an Adult in Virginia Possess?

In Virginia, cannabis-legal adults are categorized as:

• Persons aged at least 21 years old. 
• Adults can possess a maximum of one ounce of marijuana.
• An adult may also share up to one ounce of marijuana with another adult, provided there is no remuneration or exchange of money or anything of value between them.

Tax Rates

In the state of Virginia:

• Cannabis sales are subject to a 21% excise tax to be paid by consumers and remitted by retailers.
• On top of the excise tax, local governments can levy up to 3% tax on the retail price.

Types of Dispensary Licenses in Virginia

In the state of Virginia, licenses for dispensing cannabis are restricted to caps and limitations. Currently, the state is only offering: 

• Five medical licenses or Pharmaceutical Processor Permits
• 25 wholesalers
• 400 retailers
• 60 manufacturers
• 450 cultivators

These limitations are still subject to change once license processing comes into full swing in 2024. Below are the three basic licenses given to Virginians involved in the cannabis industry. 

Medical Marijuana Licenses

Currently, an entity may only legally sell medicinal cannabis in Virginia if they possess a Pharmaceutical Processor Permit. However, the Virginia Cannabis Control Authority (VCCA) only allows five permits to exist, and applications for these are not currently open.

The next set of applications will be accepted during the VCCA’s Notice of Open Application period. These inclusive dates have not yet been announced or are expected to be announced in the future.

Retail Marijuana Store License

Regarding retail marijuana store licenses in Virginia, it was previously outlined by the Virginia Department of Health Professions (DHP) that:

1. Retail stores are only allowed to conduct business directly or face-to-face.
2. Currently, the following modes of commerce aren’t permitted:

• Online commerce platform
• Delivery service
• Automated sales window
• Automatic vending or dispensing machine

3. Customers must be fully legal adults aged 21 years old and over and may only purchase a maximum of one ounce per transaction.
4. Store must be located in the VCCA’s mandated “5 Health Service Areas”.

It must be noted that Virginia has transitioned away from the DHP and moved to the VCCA. These outlined terms may change once retail licensing begins in 2024.

Marijuana Wholesaler License

Similar to the retail marijuana store license, the marijuana wholesaler license in Virginia was outlined by the DHP as follows:

• Allowed purchase of seeds and young cannabis plants from a cultivator, manufacturer, or another cannabis wholesaler for personal or retail use.
• Transfer ownership of any retail cannabis plant, cannabis product, young plant, and seeds to licensed cannabis retailers, production facilities, or distributors.

Application Process for a Dispensary License

Steps Involved in Obtaining a License

Step 1. Depending on the desired license application, any prospecting cannabis business entity may either consult the Virginia Regulatory Town Hall website or the Virginia Cannabis Control Authority website for announcements for license openings. 

Step 2. Gather the required documentation.

Step 3. Apply for the desired license. 

Step 4. Pay the initial application fee.

Step 5. Wait for approval.

Step 6. Pay the initial license fee and other associated fees.

Timelines for Obtaining a License

The state of Virginia began processing license applications back in July 2023 in anticipation of the launch of cannabis retail sales in January 2024. However, it is expected to take months to obtain a dispensary license; provided also that all necessary documents have been submitted and accepted.

Required Documentation for a License

Aside from the non-refundable application fee, applications must submit the following as outlined by the VCCA:

• Name and address of the applicant.
• Documents establishing that the applicant is authorized to conduct business in Virginia. 
• Documents confirming that state and local building, fire, and zoning requirements and local ordinances will be met before permit issuance.
• Information regarding previous or current involvement in the industry.
• Information on whether the applicant previously applied for a permit related to medical cannabis in other states, and if so, the application status, including any disciplinary action.
• Text and graphic materials showing the exterior of the proposed pharmaceutical processor. 
• A blueprint of the pharmaceutical processor that shows:
  • The square footage of each facility area
  • The location of all safes used to store cannabis and products
  • The placement of walls, partitions, and counters
  • All areas of ingress and egress.

Virginia Dispensary Fees

Legally licensed Virginia dispensaries are expected to encounter the following fees:

• Application fee of $5,000
• An initial permit fee of $80,000
• An annual renewal fee of $64,000

For Pharmaceutical Processor Permits, the following fees are involved:

• Application fee of $18,000
• An initial permit fee of $165,000
• An annual renewal fee of $132,000

Do note that these fees may still change at a later date at the discretion of the VCCA.

Location Requirements for a Dispensary

According to the VCCA, medical cannabis businesses must be located in their designated health service areas. 

On the other hand, the location of recreational marijuana dispensaries in Virginia will be subject to the VCCA’s evaluation. This means that the VCCA will monitor each geographic location, which may lead to geographical dispersion. According to the VCCA, dispersion will also be reassessed for every 100 licenses issued.

In addition to these regulations, prior related prohibitions exist, such as distance to public parks, educational institutions, and churches.

Lastly, not all towns and municipalities must comply with or allow a cannabis dispensary to be set up in their area. 

The VCCA has reserved the right to reject applications. For aspiring cannabis entrepreneurs, it would also be ideal to check with the local government if they will approve the application, as passing the VCCA may still not guarantee permission to start the business.

Insurance Requirements for a Dispensary

As of this writing, there are no insurance requirements for dispensaries in Virginia. However, as retail marijuana licenses begin their approval process in 2024, these may change.

Instead, all entities looking to create a cannabis-related business in Virginia should consult with their comprehensive insurance companies, as it may be on a case-to-case basis.

Overview and History of Cannabis Market in Virginia

Virginia was the first southern state to decriminalize marijuana in July 2021. The state already had the spark way back in 1979 when it passed legislation allowing possession of marijuana if a written prescription from a doctor was issued for the treatment of cancer or glaucoma. However, it took decades and many more attempts before it came to this point. In fact, Virginia tightened laws on its possession and use in the 1990s!

Virginia did thaw on its icy views on marijuana criminalization. It protected doctor “recommendations” in 2002. It prohibited the prosecution of patients and parents who possessed cannabidiol (CBD) and tetrahydrocannabinol (THC—marijuana’s primary component) oils in 2015. Despite these, Virginia still hadn’t set the full legal groundwork for how marijuana could be obtained.

In 2018, the Virginia General Assembly broadened the use of medical marijuana to any condition and passed three laws clarifying the right to use CBD and THC in 2019.

By 2021, everyone breathed a sigh of relief when the Virginia General Assembly finally legalized possession of up to one ounce of marijuana. It was followed by the creation of the Virginia Cannabis Control Authority, which subsequently enacted legislation allowing Virginians to grow marijuana plants in their homes.

Today, in 2024, Virginians can line up and start their own marijuana dispensary businesses. 

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