RICHMOND — The legislative commission tasked with overseeing Virginia’s transition to a retail cannabis market met Tuesday morning to hear how federal changes to cannabis policy could impact Virginia. The short answer, according to the National Conference on State Legislatures — there are still a lot of questions.

In April, the federal government reclassified state-licensed medical cannabis to a Schedule III drug from a Schedule I drug. And in December, Congress via a federal spending bill, passed legislation significantly narrowing the definition of legal hemp, a change that will take effect in November.

Schedule I drugs are classified as not having any accepted medical use, and include heroin and LSD. Schedule III drugs, including ketamine, are acknowledged as having some medical benefits but have restrictions as to who is allowed to prescribe and access them. The reclassification will impact medical cannabis dispensaries in Virginia, which have been historically unable to benefit from business expense tax deductions.

Recreational cannabis remains federally illegal.

“There’s not like an official timeline or anything from the federal government saying that we’re going to move towards legalizing or decriminalizing across the country,” Nicole Ezeh, legislative director of the NCSL, told the commission Tuesday. “It definitely signals a change in the perspective at the federal level, and there’s definitely more of an attitude where there’s a possibility for decriminalization in the future.”

Under the rescheduling, state medical cannabis businesses may register with the U.S. Drug Enforcement Agency to become federally legal. That would apply to manufacturers, distributors and dispensaries subject to state licensing rules.

“… The DEA must make every effort to process all of these applications submitted by June 29 of 2026, so just 28 days from now,” said Karmen Hanson, a senior fellow with the NCSL’s health program. That only gives the DEA six months to federally license medical related businesses across 40 states, plus D.C., Guam, Puerto Rico and the U.S. Virgin Islands, that have comprehensive medical cannabis programs.

The tax implications for businesses that sell cannabis for recreational and medical use are also a gray area, Hanson said. Those legal complexities, however, won’t immediately touch Virginia, which does not currently allow for the sale or purchase retail cannabis.

Other changes will define hemp products by the total THC content, capping the limit at 0.3% on a dry-weight basis. That would effectively criminalize most hemp products, including CBD products and widely available cannabis seltzers and gummies.

“Paper and rope … those are still legal uses of this plant,” said Megan Bland, associate legislative director at the NCSL.

The hemp restrictions, too, could affect Virginia. Some states with legal recreational cannabis could move their authorized hemp products under a regulated market or adult-use program generally, since hemp is a cannabis plant that has less than 0.3% of THC Delta 9. Or, states could choose to abide by the federal definition, which could negatively impact hemp product producers.

Some states are taking a wait-and-see approach; others are considering actions before November. In Virginia, changes to hemp regulations likely would apply to the medical program, but they’re something lawmakers would have to take into consideration if and when they get a retail market off the ground.

That transition is expected take longer than some lawmakers had hoped after Gov. Abigail Spanberger vetoed the legislation last month. She proposed substantial amendments to the legislation, which the legislature declined to take up.

“You can legally possess cannabis, but we lack a safe, regulated, tested and taxed place to buy it,” said Del. Paul Krizek, D-Fairfax, who carried the bill in the House. “But the retail market remains illegal. So that contradiction is kind of the central issue the commission will continue to confront.”

The General Assembly, controlled by Democrats in both houses, could try to include language to authorize a retail market in the budget. Spanberger previously criticized the idea as an abuse of the lawmaking process.

“Anything is possible,” Krizek said. “We haven’t any budget negotiations as far as me as a conferee goes, but we will be soon.

“So we’ll see.”

The House of Delegates returns for a reconvened special budget session June 18, the Senate on June 22. The existing budget expires June 30.

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