Virginia's legal weed market could generate $300M, but faces likely veto
Add Axios as your preferred source to
see more of our stories on Google.
/2025/03/19/1742408263906.gif?w=3840)
Illustration: Brendan Lynch/Axios
A legal retail marijuana marketplace in Virginia would bring in $7.3 million in revenue for the state in its first year alone, according to a new fiscal impact statement.
Why it matters: Gov. Glenn Youngkin is likely to once again veto a bill that would allow retail weed shops in Virginia, but doing so would deprive the state of tens of millions in additional revenue in the coming years, the report suggests.
The big picture: The bill awaiting the governor's pen would allow the state Cannabis Control Authority to begin issuing retail marijuana licenses on Sept. 1, with sales beginning in May 2026.
- Taxes on sales would drive much of the revenue, according to the fiscal impact statement, released Friday by the Virginia Department of Planning and Budget.
- The legislation would levy an 8% marijuana tax on sales at these stores, including on marijuana, marijuana paraphernalia and nonretail marijuana products.
- That would be separate from a 1.125% sales tax on these products and an optional 2.5% tax that localities could impose — and collect.
By the numbers: The state would see $7.3 million in fiscal year 2026, as well as:
- $25.66 million in fiscal year 2027
- $42.32 million in fiscal year 2028
- $60.43 million in fiscal year 2029
- $75.67 million in fiscal year 2030
- $87.84 million in fiscal year 2031
That's a total of just under $300 million in the next six years.
The fine print: The impact statement authors used "the midrange point" of sales estimates from a 2020 Joint Legislative Audit and Review Commission report for its calculations of how much revenue the state could see from the 8% tax.
Worth noting: The legislation calls for the bulk of the tax revenue to go to the Cannabis Equity Reinvestment Fund, with some also going toward pre-kindergarten, substance abuse and public health programs.
- The state would have to spend money to set up a retail marketplace, including making system updates at the Department of Taxation and beefing up staffing at the Cannabis Control Authority and the Virginia State Police.
What's next: Youngkin has until Monday to veto or sign this year's bills, including the marketplace legislation.