CHARLOTTESVILLE, VA (CVILLE RIGHT NOW) – After vetoing a bill to create a retail cannabis market last month, Gov. Abigail Spanberger has reached a compromise deal with General Assembly Democrats to include the cannabis legislation in the budget process.

Under the agreement, announced Tuesday by House Democrats, the market would open July 1, 2027 and include a 6% state tax. That rate would go up to 8% in 2029. Localities have the option of adding an additional 1-3.5% local tax.

“We have agreed to a compromise proposal that will create a safe, legal, and well-regulated cannabis marketplace here in Virginia — with recreational sales beginning on July 1, 2027,” Gov. Abigail Spanberger said in a statement. “We will do it in a way that protects consumers, targets the illicit market with clear enforcement and regulatory authority, and creates a more competitive market for small businesses and farmers.”

The General Assembly has until June 30 to send Gov. Spanberger a budget.

“By bringing together key components of the House, Senate, and Governor’s proposals, the proposed compromise exemplifies the kind of good governance Virginians deserve from their elected officials,” Del. Paul Krizek, Chairman of House General Laws, said in a statement. “This fair, safe, and legal adult-use retail cannabis market will allow for essential oversight of cannabis products, protecting Virginians in every corner of the Commonwealth. It also supports Virginia’s entrepreneurs by creating an even playing field for small businesses to succeed in the emerging market.”

The agreement would create a maximum of 350 retain cannabis establishment licenses and increase the possession limit to two ounces, from its current one-ounce limit.

The agreement also calls for the funds generated by the sale of cannabis to be sued to support early childcare and education, K-12 education, behavioral health programming for substance use disorder prevention and treatment programs, public health programs, and the Cannabis Equity Reinvestment Fund.

“This is what good governing and collaboration look like — bringing people together, listening to families and public safety leaders, and focusing on solutions that are practical, enforceable, and in the best interest of Virginians,” Spanberger said in the statement. “In the end, we all wanted to deliver a marketplace that the Commonwealth could implement effectively for the long-term.”