Over 1.3 million Virginians have reported using cannabis in the past month, a testament to the growing acceptance and demand for the plant. Despite this surge in usage, the landscape of Virginia’s cannabis industry remains starkly limited, with only five major cannabis licenses permitted per current statute. 

The Current State of Virginia Cannabis

These licenses permit the holder to operate six total retail locations and offer unlimited cultivation and processing capacity, all within a certain Health Service Area per license. To date, four out of the five licenses are controlled by just three multi-state operators (MSOs) based outside the Commonwealth, leaving many local entrepreneurs and small businesses on the sidelines. 

The current owners are New York City-based Columbia Care – 2 vertical licenses, Boca Raton-based Jushi Holdings – 1 vertical license, and Chicago-based Green Thumb Industries – 1 vertical license. Columbia Care has already announced plans to sell one of their licenses to Chicago-based Verano Holdings. 

Who Will Get the Golden Ticket?

The fifth license, previously owned by MedMen, has been mired in litigation since it was stripped for inactivity. After two years of the legal dispute, the Virginia Cannabis Control Authority (VCCA) announced plans to redistribute the HSA I license. As a result, dozens of local and national companies are now scrambling to secure this final "golden ticket." 

The VCCA, a regulatory body with broad authority over Virginia’s medical and prospective adult-use cannabis markets, is tasked with developing, issuing, and enforcing rules for this burgeoning industry. The anticipation surrounding the awarding of the final license has stirred hopes that a local, smaller company might win the opportunity. However, recent developments suggest that the final license may instead reinforce the dominance of large, out-of-state operators. 

The Cost of Cannabis Licenses in Virginia 

The challenge of obtaining a cannabis license in Virginia is formidable. The non-refundable application fee alone is $18,000. The initial permit fee is set at $165,000, with an annual renewal fee of $132,000. Applicants must also submit a comprehensive plan detailing their financial strategy, facility construction, and operational capabilities within a tight timeframe. 

Despite these high barriers to entry, local and national firms have been competing with the understanding that merit and capability would determine the winner. However, the process took an unexpected turn just two weeks before the application deadline. 

In April, the VCCA announced through a FAQ answer that they would allow multiple applications from the same ownership entity, with no limit on the number of applications that could be submitted, provided the $18,000 application fee was paid for each. This fee is substantially higher than the $500 to $1,000 application fees seen in other states with similar lottery systems. FAQs were submitted to the VCCA from local groups asking to restrict the applications to at least one per property. They were rejected.

In a surprising twist, 21 of the 40 applications submitted were from TheraTrue, a cannabis company owned by Atlanta-based billionaire, Paul Judge. This gives TheraTrue a significant advantage, with a 53% chance of winning the final HSA license simply by exploiting the VCCA’s new policy. This has raised concerns among industry observers and applicants that the licensing process may be skewed in favor of those with deep pockets. 

Adding fuel to the fire, TheraTrue is rumored to be represented by the very same firm, Macaulay Jamerson, that also represents Jushi Holdings and in the past has worked with other current MSOs licensees in the Commonwealth of Virginia. This is creating speculation about potential conflicts of interest and the integrity of the licensing process. 

An Uncertain Future for Virginia’s Medical Program

While originally intending to award such licenses in June, the award date has now been postponed indefinitely. The VCCA has been tight-lipped, offering no comments beyond the FAQ on their website. This lack of transparency has left applicants in the dark, leaving multiple groups crying foul as new information comes to light, stating that such blatant pay-to-play from out-of-state billionaires is exactly the opposite of what Virginia residents want from their medical providers. It does not help that such concerns were pointed out by multiple groups in April 2024, only to fall on deaf ears at the VCCA. 

The saga of Virginia’s cannabis licensing has been marked by delays and confusion. As the VCCA prepares for its meeting on August 27th, the stakes are high. The potential delay of more than three months could impact the industry’s growth and local economic opportunities. For many, this final license represents more than just a business opportunity; it embodies the potential for Virginia’s cannabis industry to evolve beyond the influence of major national players. 

For now, applicants and industry watchers remain on edge, awaiting the VCCA’s decision. The outcome of this final licensing round will be pivotal, determining whether Virginia’s cannabis market will continue to be dominated by large corporations or if there will be a shift toward greater local involvement and diversity. The final license may well set the tone for the future of cannabis in Virginia, making it a critical moment for the state’s budding industry.