Marijuana Moment: Virginia Rejected A Monopoly Model For Marijuana, But Lawmakers Need To Finish The Job (Op-Ed)

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“Legislators must ensure the launch mechanics don’t inadvertently hand the keys back to the incumbents before independent operators can even get in the door.”

By Max Jackson, Cannabis Wise Guys

For years, the story of legal cannabis in America has been a rerun of the same bad movie: corporate lobbyists write the rules, “Big Weed” captures the market and independent farmers are regulated into bankruptcy. Last week, Virginia’s Joint Commission to Oversee the Transition of the Commonwealth into a Retail Cannabis Market decided to change the channel.

In October, I warned the Joint Commission in testimony that Virginia faced a choice between two economic models: “Path A,” a limited-license market dominated by incumbent multi-state operators (MSOs), or “Path B,” a competitive market built on independent Virginia businesses.

The proposed legislative changes represent a genuine attempt to prevent the monopolization that has plagued legal cannabis markets across the country. The Commission has embraced restorative justice, killed the regulatory barriers that created “cannabis deserts” in other states and built a framework for independent operators to compete. The question is whether the operational timeline will deliver on that promise—or undermine it.

The $10 Million “Penalty” Is Actually A Discount

The proposal requires incumbent pharmaceutical processors to pay a $10 million fee to enter the adult-use market. To the average Virginian, that sounds like a hefty price tag. But let’s be honest about the math—and the history.

Virginia’s medical program launched in 2020 as a limited-license, vertically-integrated market. Five pharmaceutical processors—most of them multi-state operators—were awarded exclusive territories with mandatory vertical integration, a structure designed to favor deep-pocketed incumbents over independent operators. Between July and August 2025 alone, that protected medical market recorded nearly $30 million in sales across more than 256,000 transactions.

In 2024, The Cannabist Company sold its Eastern Virginia medical operation to Verano Holdings for $90 million. Just last week, The Cannabist sold its Central Virginia operation to Curaleaf for $110 million. Two territories, $200 million in total value.

In exchange for this one-time $10 million conversion fee, these companies are being granted licenses that are larger and more powerful than any other tier available to new entrants. They retain their vertical integration—growing, processing and selling their own product—while new businesses are forced to specialize. They already have completed facilities, trained staff, established supply chains and consumer brand recognition.

Against proven territory valuations of $90-110 million and a medical market generating $15 million per month, a $10 million conversion fee is not a penalty; it’s a discount on market dominance.

Killing The “Cannabis Desert”

The most significant victory for public safety is the removal of the local referendum option.

The failure of the opt-out model is well-documented. In New Jersey, nearly 70 percent of municipalities initially opted out of allowing cannabis businesses, creating vast “cannabis deserts.” This didn’t stop consumption; it simply handed those markets directly to illicit operators who don’t check IDs or test their products. By striking the opt-out provision, the Commission has acknowledged a fundamental truth: you cannot regulate a market if you do not allow it to exist.

However, access alone doesn’t guarantee competition. The proposal also establishes a one-mile minimum distance between retail dispensaries, intended to prevent the clustering seen in states like New Jersey, where zoning restrictions force retailers to open across the street from one another.

In theory, this promotes geographic distribution. In practice, it transforms retail licensing into a real estate race—whoever secures a location first controls a one-mile radius, and well-capitalized operators with real estate teams will always move faster than independent applicants still assembling financing.

Removing the opt-out provision helps by opening more geography to competition, but the mile-radius rule still advantages those who can play the property game at speed.

Restorative Justice Requires Resources

Equally important is the shift in how Virginia defines “impact.” The proposal to include prior felony distribution charges as a qualifier for impact status—rather than a disqualifier—is an absolute victory. It moves beyond performative equity and toward actual restorative justice, acknowledging that the expertise of legacy operators is a feature, not a bug.

However, a license is only an opportunity if the resources exist to execute on it. The bill’s commitment to direct 50 percent of the Cannabis Equity Reinvestment Fund into loan capital is a start, but impact licenses are only as helpful as the funding, technical assistance and affordable professional services available to support them.

Virginia must ensure these operators can access not just capital, but the legal, accounting and compliance expertise necessary to survive the capital-intensive startup phase—services that incumbents already have in-house.

The 120-Day Trap

As an operational consultant, I must be direct: the timeline in this proposal threatens to undo everything the policy structure is trying to achieve.

Here’s the math. Assuming the bill passes early in 2026, the Cannabis Control Authority (CCA) has until July 1 to stand up regulations and process the first round of licenses. Retail sales begin November 1. That gives a newly licensed independent operator exactly 120 days to go from “license in hand” to “product on shelves.”

Let me explain what 120 days actually means in cannabis cultivation. A typical flowering cycle runs 60-65 days. Add 3-4 weeks of vegetation before that. Then, 10-14 days for drying and curing. Then testing, packaging and compliance. You’re looking at 100-120 days minimum from clone to compliant, sellable product—assuming everything goes perfectly, your facility is already built, your systems are dialed in and you started cultivation the moment your license arrived.

For a new operator still finishing construction, installing equipment, and training staff? The math doesn’t work. They will have nothing to sell on November 1.

The pharmaceutical processors, meanwhile, already have inventory. They have flower curing in their vaults right now. They’ll be ready to sell on day one.

Market Readiness, Not Calendar Dates

The solution is straightforward: tie market launch to actual competitive readiness, not arbitrary dates.

Virginia should establish “Market Readiness” benchmarks where retail sales begin when a minimum threshold of independent licensees—impact operators, microbusinesses and small cultivators—have received licenses, completed buildout and have product ready for sale. When the independents and the incumbents cross the starting line together, consumers get competition, prices reflect a real market and the policy achieves its stated purpose.

This isn’t about delaying the market indefinitely. It’s about aligning the incentives of all market participants so that pharmaceutical processors, independent operators and the state all benefit from a stable, competitive launch.

One approach would be to make pharmaceutical processor conversion contingent on independent operator readiness—perhaps even on a regional basis—so that cooperation becomes more profitable than obstruction. When incumbents’ adult-use revenue depends on independents getting operational, the market dynamics shift dramatically.

The ready-together framework prevents the first-mover revenue trap that has cemented MSO dominance in state after state. Arizona launched sales roughly 80 days after licensing—but only incumbents with existing inventory could participate, giving them a 6-12 month head start that new operators never recovered from.

Virginia has built the right policy framework to avoid that outcome. Now it must build the right launch mechanics.

The Commission should amend the current timeline provisions to establish clear market readiness criteria: retail sales commence when the Cannabis Control Authority certifies that licensed independent operators have compliant product available for distribution, ensuring market launch reflects genuine competition rather than incumbent inventory advantage.

This preserves the urgency of launching a regulated market while ensuring the Commission’s equity and competition goals aren’t undermined by a calendar date that only pharmaceutical processors can meet.

“Operational” Must Mean Progress, Not Perfection

The proposal includes a 24-month “use it or lose it” rule to prevent license speculation. That’s good policy—if “operational” is defined correctly.

In Virginia’s current construction environment, the electrical transformers required for a commercial cannabis facility can face lead times of 12-18 months. Add permitting delays, zoning appeals and on-site construction, and the 24-month window becomes dangerously tight.

The standard for retaining a license must be “demonstrable progress”—breaking ground, passing inspections, installing equipment, securing financing—not “open for business.” Without this clarity, the 24-month rule becomes another tool that advantages incumbents with completed facilities while punishing independents for delays entirely outside their control.

Shell Company Scrutiny Needs Speed Limits

The proposal includes provisions requiring the Cannabis Control Authority to scrutinize ownership agreements, management contracts and financing arrangements to prevent MSOs from using shell companies to control nominally “independent” licensees. This is vital—without it, every anti-consolidation provision in the bill becomes meaningless.

However, regulatory scrutiny without statutory time limits can be as dangerous as no scrutiny at all. If CCA takes six months to review a management agreement or a financing deal, that delay alone can kill a small business burning through cash while waiting for approval. Virginia must establish clear timelines—30 to 60 days for standard reviews, with defined criteria for what triggers extended review—so that legitimate operators aren’t inadvertently strangled by bureaucratic pace.

Virginia Can Lead—If It Finishes The Blueprint

Virginia has rejected the monopoly model that has failed consumers and small businesses in state after state.

The Commission has embraced restorative justice by making felony distribution convictions a qualifier, not a disqualifier. It has eliminated the local opt-out provisions that created “cannabis deserts” in New Jersey and elsewhere. It has built a framework for microbusinesses, shared processing hubs, and impact licensees to compete on a level playing field.

But a blueprint is not a building. By establishing clear market readiness criteria that tie launch to competitive preparedness, defining “operational readiness” to protect legitimate businesses from bureaucratic delays and establishing time limits for regulatory review, Virginia can deliver on the promise of a truly competitive market.

The Commonwealth has drawn the blueprint for what legal cannabis could look like. Now legislators must ensure the launch mechanics don’t inadvertently hand the keys back to the incumbents before independent operators can even get in the door.

Max Jackson is the founder of Cannabis Wise Guys and specializes in translating between cannabis operations, investment, and public policy. He has provided expert testimony to the Virginia Legislature on preventing market consolidation in emerging cannabis markets.

Photo courtesy of Max Jackson.

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