How To Open a Dispensary in Virginia

How To Open a Dispensary in Virginia-01

Virginia has become the first state in the traditional US South to legalize recreational cannabis. The Virginia Cannabis Control Authority has been established as of July 1, 2021, and the board will set up and regulate the budding recreational cannabis program in the state.

Unlike other states, the Virginia cannabis laws will take time to get implemented, and they won’t allow the existing dispensaries to start selling to adults immediately.

Right now the best thing you can do is educate yourself on how to open a dispensary in Virginia. Let’s walk through the emergence of the cannabis business in Virginia, its current status, advancement, licenses required, and legalization terms.

Can I open a recreational dispensary in Virginia right now?

Not yet! The Virginia legislature has declared that cannabis dispensary doors in Virginia will open on January 1, 2024. An early regulatory board is being set up, similar to ABC for alcohol, and they will not start accepting applications for businesses until 2023.

Current Cannabis laws in Virginia

  • Adults 21 years and older can possess, consume, and grow cannabis in Virginia. However, unless a doctor has signed off on a prescription, it is illegal to purchase it.
  • Adults who are caught with more than an ounce but less than a pound of cannabis will be fined $25.
  • Adults caught possessing more than a pound of cannabis face a felony charge that carries a sentence of 1 to ten years in jail and a fine of up to $250,000.
  • It is illegal to smoke cannabis in public.
  • Cannabis seeds cannot be purchased or sold legally, but they can be shared.
  • Cannabis cannot be consumed or transported in vehicles in open or easily accessible containers by drivers or passengers.
  • Cannabis-related products are only available for purchase or sale at dispensaries that are a part of the state’s medicinal marijuana program.

How Much Cannabis Can an Adult in Virginia Possess?

  • Adults can possess up to one ounce of cannabis for personal use.
  • Adults can consume cannabis in private residences if they are allowed to do so by the owner.
  • Adults can share up to 1 ounce of cannabis privately, as long as it is not sold.
  • Adults may cultivate up to four plants per household (not per individual) if certain conditions are met. Here are the conditions:
    1. Individuals (growers) must make certain that no plant may be seen from a public way.
    2. They must prevent unauthorized access by those under the age of 21.
    3. Growers must tag each plant with their name, driver’s license or ID number, and a notation that the cannabis plant is being cultivated for personal use as allowed by law.

Tax Rates

  • Retail cannabis sales will be taxed at a rate of 21% across the state.
  • On top of pre-existing state sales tax rates, municipalities can levy an additional sales tax of up to 3%.

Current Cannabis Market in Virginia

According to the most trusted online publication, Marijuana Business Daily, Virginia is the 12th most populous state and will be one of the larger markets to start a cannabis business. Virginia’s recreational industry will be worth $400 million to $500 million by 2022, and $1.2 billion to $1.4 billion by 2025.

Types of Cannabis Licenses in Virginia

Following are the types of cannabis licenses processed in Virginia:

Medical Marijuana Licenses

Also known as the Virginia Medical Cannabis Processor, it is a vertically integrated license that permits license holders to cultivate medical cannabis plants, extract, process, produce and dispense CBD and THC-A oils to registered patients.

The state of Virginia allows just five (5) business licenses for Virginia Medical Cannabis Processors.

Retail Marijuana Store License

As the industry’s public face, retail outlets will be one of the most significant and strategic licenses. It’s also where the most vulnerable local rules and limitations are found.

Nonexclusive restrictions will be imposed on retail establishments in the following ways:

  1. Only sell to customers in a direct, face-to-face setting.
  2. Cannot sell through:
    • an automated dispensing or vending machine
    • a drive-through sales window
    • an Internet-based sales platform
    • a delivery service
  3. Each transaction is limited to the sale of one ounce of cannabis or its equivalent in products to a single person.
  4. Also, they cannot give away cannabis.

Marijuana Cultivation Facility

The cultivation license allows the licensee to:

  1. Grow, label, and package retail cannabis.
  2. Obtain cannabis plants and seeds from other cannabis production establishments by purchasing or taking possession of them.
  3. Transfer and sell retail cannabis, immature cannabis plants, and seeds to cannabis wholesalers and retail cannabis stores, as well as to other cannabis cultivation and processing companies.
  4. Sell immature cannabis plants and seeds to consumers so that they can grow cannabis at home for personal use.

There are two classes of cultivation licenses:

  1. Class A cultivation facility license, allows the licensee to cultivate a maximum of a specified number of cannabis plants or a maximum of a certain number of square feet of cannabis plants, as established by the Board.
  2. Class B cultivation facility license allows the licensee to grow cannabis plants with a tetrahydrocannabinol concentration of no more than 1%, as measured after decarboxylation.

Marijuana Manufacturing Facility 

The cannabis manufacturing licensee is authorized to:

  1. Manufacture, label, and package retail cannabis and retail cannabis products.
  2. Obtain retail cannabis from a cannabis cultivation facility or another cannabis manufacturing company and purchase or take possession of it.
  3. Sell retail cannabis and retail cannabis products to wholesalers, retail cannabis stores, or other cannabis manufacturing facilities while in possession of them.

Cultivation and testing are not included in “manufacturing”. The law distinguishes between cultivation and production, preventing cultivators from growing cannabis and turning it into a product.

Marijuana Wholesaler License

The wholesaler license is one of the most intriguing license classifications. The licensee of a cannabis wholesaler is allowed to:

  1. Obtain retail cannabis and products, immature cannabis plants, and seeds from a cannabis growing facility, a cannabis manufacturing facility, or another cannabis wholesaler.
  2. Transfer possession of retail cannabis, retail cannabis products, immature cannabis plants, and seeds to a cannabis cultivation facility, cannabis manufacturing facility, retail cannabis store, or another cannabis wholesaler. The licensee is also allowed to sell or resell retail cannabis, retail cannabis products, immature cannabis plants, and seeds.

As it works between the numerous categories by buying and selling to each, the wholesaler becomes the group’s versatile middleman.

Apart from the cultivation aspects of the cultivator license, the key difference is that the wholesaler may also sell marijuana goods, whilst the cultivator cannot.When applying for a Virginia Dispensary license these are the things you must take note of:

  • Stores will be dispersed geographically, with dispersion being reassessed after every 100 licenses issued.
  • From July 1, 2023, through January 1, 2024, social equity applications will be given priority, and regulators will waive a percentage of fees.
  • Cannabis Control Authority, an authorized body will be established to regulate the adult-use cannabis industry in Virginia. The board will consist of five-member who will be in charge of creating regulations, issuing licenses, suspending or revoking them, and issuing fines.

How to Get a License

Although the licensing period has yet to begin, some information has been made public, including the need that businesses use seed-to-sale software to track cannabis sales in the state and adhere to specific laws for distribution, transportation, record keeping, security, and surveillance.

Here’s what we know about how to open a dispensary in Virginia so far:

Recreational License Requirements

A five-member Board of Directors will authorize labs and determine the number of licensees under the cannabis legalization bill.

These figures could be higher if existing medical cannabis businesses and hemp processors were not included:

  • 400 retailers
  • 25 wholesalers
  • 450 cultivators
  • 60 product manufacturers

The board will set criteria for evaluating new licensees depending on the density of retail stores in the community. We’ll know more then about exactly how to open a dispensary in Virginia. It will also take into account any negative public health effects in the community. From July 1, 2023, to December 31, 2023, the Virginia Cannabis Control Authority may begin accepting license applications. Preference will be given to:

  • Qualified social equity applicants.
  • Individuals with a prior cannabis conviction or a close relative with a cannabis conviction.
  • Applicants living in an area with disproportionate cannabis arrests or under economic distress.
  • Individuals who are graduates from a Virginia HBCU.

Virginia Dispensary Fees

Type of FeeAmount
Non-refundable Application Fee$10,000
Initial Permit Fee$60,000

What Else Do You Need to Open a Dispensary?

Step 1

Understand Cannabis Laws In Virginia

When it comes to cannabis laws, each state has a different set of rules and regulations. For instance, in Louisiana, only “non-smokable” products are permitted for medical sales. While in Nebraska, cannabis is prohibited, even for medical use.

Take a look at the table below to get a rough idea of what type of sales are permitted (at least under state law) around the country:

No. of StatesType of Marijuana Sales PermittedStates
9Medical and Recreational salesAlaska, California, Colorado, Maine, Massachusetts, Michigan, Nevada, Oregon and Washington
24General medical salesArizona, Arkansas, Connecticut, Delaware, DC, Florida, Hawaii, Illinois, Maryland, Minnesota, Missouri, Montana, New Hampshire, New Jersey, New Mexico, New York, North Dakota, Ohio, Oklahoma, Pennsylvania, Rhode Island, Utah, Vermont, and West Virginia
14Only CBD or low THC oils permitted for medical salesAlabama, Georgia, Indiana, Iowa, Kansas, Kentucky, Mississippi, North Carolina, South Carolina, Tennessee, Texas, Virginia, Wisconsin, and Wyoming
1Only “non-smokeable” products permitted for medical salesLouisiana
3Cannabis BanIdaho, Nebraska, and South Dakota

Step 2

Design A Stable & Scalable Business Plan

A solid business plan will be your guide to success. Your business plan must include the following points to help you to establish your business and stay ahead of any competition in the cannabis marketplace:

Market Analysis : The market study will disclose whether there is sufficient demand in your target market for your cannabis product or service.

Competitive Analysis : The competitive study will look at the competition’s strengths and shortcomings, as well as your marketing plan’s strategy for gaining market share.

Management Plan : The management plan lays out your company’s structure, management, and personnel needs.

Operations Plan : The operations plan outlines the requirements for your facilities, equipment, inventories, and supplies.

Financial Plan : The financial strategy is the deciding factor in whether or not your proposed business idea will succeed. If you need money, your financial plan will decide how likely you are to get it from banks, angel investors, or venture capitalists in the form of stock or debt finance.

These concrete milestones will aid in tracking the company’s success.

Step 3

Handpick Your Best Team

This isn’t an easy task. So, hire a team that includes cannabis industry experts, medical professionals, community liaisons, people with real-world expertise in compliance or regulated industry, and much more. In fact, the more your team is diversified, the better it is.

Step 4

Pick Your Location Strategically

State legislatures don’t want cannabis stores near schools, churches, playgrounds, and other public spaces. Retailers are usually required to be 500 or 1000 feet away from such establishments. Also, while states may allow retailers, it doesn’t mean that every county or municipality will. For instance, Connecticut cities like Newtown and Greenwich have decided to ban cannabis businesses to set up shop. On the other hand, the new law allows communities in Michigan to limit or prohibit cannabis businesses, so it’s unclear which parts of the state will eventually embrace or reject the industry.

So, when choosing a location for your business check out the rules and regulations set by the state government & municipalities, to ensure your application is not rejected on this basis.

Step 5

Ensure Seamless Operation With Best Technology Partner 

A successful cannabis business has a robust IT infrastructure and security system in place. Therefore, once your license is approved and you are ready to set up your shop, you must contact Cure8. We can plan and design your store from scratch. From WiFi to hardware such as tablets, scanners, printers, security cameras, and much more, we have everything to complete all your store IT infrastructure.

How Can Cure8 Help?

Cure8 is a technology solution provider company, and we help cannapreneurs and canna-businesses achieve their goals and beyond. We not only help you plan but also assist your business to procure, install, secure, manage and scale up your IT infrastructure in a quick span of time.

We’ve watched the industry change, twist, and turn, so we’re well-equipped to assist our customers with whatever challenges they encounter today, tomorrow, or even in the next five years.

You can check out our solutions and know more about our services by clicking here.

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