Virginia residents spend up to $1.27 billion annually on marijuana, with approximately 872,216 adults consuming marijuana in a given month, according to a newly published state-commissioned report examining the size of the market ahead of recreational sales launching next year.
The 74-page report, prepared by Cannabis Public Policy Consulting for the Virginia Cannabis Control Authority and submitted to the General Assembly, provides one of the most detailed assessments yet of marijuana demand in the Commonwealth. Researchers estimate annual consumer spending at $1.054 billion, with a range of $835.7 million to $1.27 billion.
The estimates account for marijuana obtained through all sources, including licensed medical dispensaries, unlicensed sellers, out-of-state dispensaries and other informal channels. They represent existing consumer spending rather than projected recreational dispensary revenue, highlighting the substantial market already operating before Virginia begins licensed adult-use sales.
According to the analysis, approximately 872,216 Virginia residents ages 21 and older consumed marijuana during the past month. These consumers spend an average of $100.68 monthly on marijuana products, generating an estimated $87.8 million in total monthly expenditures statewide.
The report also notes that these figures exclude purchases by tourists and out-of-state visitors, meaning Virginia’s eventual recreational market could attract additional demand beyond the estimated $1.05 billion already being spent by residents.
Researchers identified significant regional differences in marijuana spending. Central Virginia accounts for the largest estimated share, with approximately 282,231 monthly consumers spending $29.2 million. Northern Virginia follows with 253,055 consumers and $25 million in monthly spending, while eastern Virginia accounts for 206,654 consumers spending $16.8 million. Southwest Virginia has an estimated 130,277 consumers spending $16.8 million monthly.
The southwest region also recorded the highest average monthly expenditure per consumer at $128.85, compared with $103.38 in central Virginia, $98.99 in northern Virginia and $81.30 in eastern Virginia.
Marijuana flower remains the most popular product category, accounting for the largest share of both purchases and consumer spending. Vape products and edibles also represent substantial portions of the market, with purchasing patterns varying depending on whether consumers participate in Virginia’s medical marijuana program.
The analysis found that even registered medical marijuana patients obtain a considerable portion of their marijuana outside licensed dispensaries. Just 48% of their average monthly spending goes to regulated sources, including dispensaries and caregivers, indicating additional opportunities for licensed businesses as the state’s recreational market develops.
Despite the substantial existing demand, the report suggests Virginia could initially accommodate consumers with a relatively limited number of retail locations. Using sales figures from the existing medical marijuana market, researchers estimated a baseline need for approximately 135 retail locations, with a modeled range of 107 to 163.
At the upper end of that range, Virginia would have approximately one retail location for every 5,351 residents who consume marijuana monthly, or roughly one location for every 54,000 residents overall.
The analysis uses Virginia medical dispensaries’ average monthly sales of approximately $651,736 per location as its benchmark. Researchers also examined scenarios involving higher and lower sales per store, producing potential retail capacity estimates ranging from 54 to 326 locations under different assumptions.
Although the report identifies 163 locations as a possible reference point for initial retail capacity, it recommends retaining Virginia’s statutory maximum of 350 stand-alone retail licenses. Researchers favor issuing licenses in phases, allowing regulators to increase the number of businesses as actual sales, consumer demand and market conditions become clearer.
The report also examines cultivation requirements, estimating that approximately 503,932 square feet of indoor cultivation canopy would be needed to accommodate projected demand under its modeling assumptions. It identifies three large-scale Tier V cultivation licenses as one possible component of the initial rollout, alongside smaller cultivation businesses and microbusinesses.
The findings come as Virginia prepares to launch recreational marijuana sales on July 1, 2027, following legislation approved earlier this year establishing the state’s commercial adult-use market. The Cannabis Control Authority is developing regulations and preparing to begin issuing initial licenses in 2027.
