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

*“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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Need To Finish The Job (Op-Ed) appeared first on Marijuana Moment.