Potential for local cannabis taxes included in City Council update
The Virginia General Assembly also passed laws to increase minimum wage, boost affordable housing and limit data center impact
The Williamsburg City Attorney recently presented the city’s 2026 Legislative Update to Council at a recent meeting and one of the topics covered was the state budget bill’s establishment of a cannabis retail licensing framework. The bill places licensure and operation under the Virginia Cannabis Control Authority, preserves local zoning and business license authority, and permits a 3.5% local tax on retail sales along with restrictions on public consumption. The framework takes effect July 1, 2027. A related provision allows localities to place a referendum before voters authorizing an additional 1% sales tax for school construction, tied to bond terms of up to 20 years.
The presentation is an annual briefing in which the City Attorney’s Office reviews new state legislation relevant to Council and City operations. Beyond the cannabis and budget provisions, this year’s update addresses a broad range of topics, including employment law changes such as minimum wage increases, paid sick leave, and paid family leave; expanded state and local authority over affordable housing and zoning; and new requirements affecting data centers, procurement, and public safety enforcement.
Additional items include updated conflict-of-interest and FOIA provisions affecting local officials, two bills specific to Williamsburg addressing the City Charter and parking enforcement, and several bills that did not become law, including a vetoed measure on public employee collective bargaining and two failed statewide housing growth mandates.
Retail cannabis sales & taxes
The state budget bill establishes a cannabis retail licensing framework and a local option for school construction funding.
A cannabis retail licensing framework will be established under HB30, administered by the Virginia Cannabis Control Authority; the law preserves local zoning and business license authority, allows a 3.5% local tax on retail sales, and permits public consumption restrictions. The framework takes effect in July 2027.
Localities will be allowed to place a referendum before voters authorizing an additional 1% sales tax for school construction under HB334 (via HB30), with the tax tied to the bond term for a maximum of 20 years.
Read the latest Annual Report by the Virginia Cannabis Control Authority
Keep reading for a detailed review of all the bills included in the city’s legislative update.
