House adopts conference report to create regulated adult‑use cannabis market with conversion fees and earmarks
March 16, 2026 | 2026 Legislature VA, Virginia
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A conference report to establish a regulated adult‑use cannabis retail market was adopted by the Virginia House on Saturday after an extended floor presentation and member questions.
The conference report sets a framework for licensing, safety standards, and enforcement. The sponsor described a $10,000,000 conversion fee for established medical operators (a compromise between earlier positions), paid across three years, and an overall tax structure that includes a 6% state cannabis tax plus an optional local tax of 1–3.5% on top of existing sales tax. "We were at 5,000,000, and the senate was at 15, so we came in between," the sponsor said when describing the conversion fee compromise.
The report moves regulation of intoxicating hemp products to the Cannabis Control Authority (CCA) and creates enforcement mechanisms including an illicit‑market tip line coordinated with the Virginia ABC Authority. It also requires a plan to be submitted to the General Assembly by January 1 outlining coordination between ABC and the CCA.
On revenue allocation, the conference report adopts the Senate framework for where funds will go: 40% to early childhood care and education and 30% to a cannabis equity reinvestment fund, the sponsor said, and added provisions to improve access for those disproportionately impacted by prohibition. The sponsor also said the bill preserves consumer protections, labelling and testing standards, and a public searchable licensee directory.
Several members asked whether the change in the statutory definition of hemp would criminalize currently lawful intoxicating hemp products. A questioner from Buckingham warned that the federal definition embedded in the conference report could make some existing Virginia manufacturers' products illegal; the sponsor replied that the change follows the federal definition and that the CCA rulemaking process will determine enforcement details. That exchange left the question of regulatory transition procedures to administrative rulemaking rather than immediate statutory immunity on the floor.
The House agreed to the conference report (Ayes 64, Noes 32). The sponsor thanked conferees and stakeholders and said the measure represents years of work and compromise. Next steps include regulatory drafting by the CCA and additional coordination between ABC and CCA as required by the report.
The conference report sets a framework for licensing, safety standards, and enforcement. The sponsor described a $10,000,000 conversion fee for established medical operators (a compromise between earlier positions), paid across three years, and an overall tax structure that includes a 6% state cannabis tax plus an optional local tax of 1–3.5% on top of existing sales tax. "We were at 5,000,000, and the senate was at 15, so we came in between," the sponsor said when describing the conversion fee compromise.
The report moves regulation of intoxicating hemp products to the Cannabis Control Authority (CCA) and creates enforcement mechanisms including an illicit‑market tip line coordinated with the Virginia ABC Authority. It also requires a plan to be submitted to the General Assembly by January 1 outlining coordination between ABC and the CCA.
On revenue allocation, the conference report adopts the Senate framework for where funds will go: 40% to early childhood care and education and 30% to a cannabis equity reinvestment fund, the sponsor said, and added provisions to improve access for those disproportionately impacted by prohibition. The sponsor also said the bill preserves consumer protections, labelling and testing standards, and a public searchable licensee directory.
Several members asked whether the change in the statutory definition of hemp would criminalize currently lawful intoxicating hemp products. A questioner from Buckingham warned that the federal definition embedded in the conference report could make some existing Virginia manufacturers' products illegal; the sponsor replied that the change follows the federal definition and that the CCA rulemaking process will determine enforcement details. That exchange left the question of regulatory transition procedures to administrative rulemaking rather than immediate statutory immunity on the floor.
The House agreed to the conference report (Ayes 64, Noes 32). The sponsor thanked conferees and stakeholders and said the measure represents years of work and compromise. Next steps include regulatory drafting by the CCA and additional coordination between ABC and CCA as required by the report.
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