Competition’s fierce for Shenandoah medical marijuana permit

UPDATE: State delays choosing Shenandoah medical marijuana provider

The Virginia Cannabis Control Authority (CCA) received 40 complete applications for conditional permits to operate as the state’s sole licensed pharmaceutical processor of medical cannabis for a region including the Shenandoah Valley, as well as Charlottesville, Fredericksburg and the counties of Spotsylvania and Stafford.

Applications were due April 30, and the state authority planned to announce the selected company at the end of June, according to CCA Chief Officer Jeremy Preiss.

Each company paid an $18,000 fee for the opportunity to be granted the sole medical marijuana license to serve the CCA’s health service area 1 (HSA 1), which has been tied up in litigation for years. HSA 1 has not had a licensed medical marijuana dispensary available since the state began issuing pharmaceutical processor licenses for its five HSAs in September 2018.

“This is a pay to try-to-play,” says Eric Postow, Fairfax County-based managing partner for Holon Law Partners. “That really just kind of demonstrates the interest in the business community wanting to service the cannabis sector.” Postow led a team that helped put together an application for Albemarle County-based Integra Vertical.

The competition also reflects the lucrative nature of the license, which allows licensees to open and operate dispensaries within their designated HSA. While the CCA doesn’t track sales revenues, the state’s dispensaries made 3.4 million medical cannabis dispensations in 2023. Virginia patients paid an average $14 per gram for medical cannabis flower at dispensaries, compared with $10 in Florida and Pennsylvania, according to a November 2023 market study conducted for the authority.

Along with multiple out-of-state businesses, Pure Virginia, a company connected to Elkton-based CBD and hemp products business Pure Shenandoah, applied for the conditional permit. Pure Virginia CEO Tanner Johnson says 40 applicants was on the higher end of what he’d expected, but he’s optimistic about his family business’s chances.

“To us, it didn’t really come down to the competition we were against but how good of an application we could put in, and I think that we put in a really, really good one,” he says.

Greenwood-based Jackpot 777 Farms, the company behind applicant Integra Vertical, currently produces hemp flower and CBD-infused products. “When the opportunity came up and Virginia decided to put HSA 1 up for application,” says Integra Vertical CEO Mike Tabor, “it seemed like an opportune time to make the shift into cannabis.”