A former Richmond smoke shop owner breaks his silence on selective enforcement, shady distributors, and the regulatory loopholes driving Virginia’s booming gray market.
In neighborhoods across Richmond, it’s hard to miss them: brightly lit vape shops glowing with LED signage, open late, their shelves lined with flavored vapes, glass pipes, and hemp-derived edibles. They’ve become as common as corner stores, often replacing them, and for many shoppers, they’re just another part of the city’s retail landscape.
This article isn’t a call to shut these shops down. But it is a look at how the current regulatory system allows some retailers to bypass the rules while others are penalized for following them. That imbalance has created an unfair environment, one where compliant small businesses are being edged out by competitors operating in gray zones, often without consequence.
To understand how this growing industry operates, and where it’s falling short, we spoke with Merritt, a former local shop owner who recently shuttered his business, Item Nine, after three years in Richmond’s Fan District.
“I couldn’t compete anymore,” Merritt said. “When there’s a smoke shop every 300 yards and nobody’s playing by the rules, what are you supposed to do?”
He opened Item Nine in 2022 with a focus on local glass artists, an effort to preserve and promote Richmond’s tradition of pipe craftsmanship. But that vision quickly buckled under the weight of market saturation, federal loopholes, and what he describes as selective or absent enforcement.
Editor’s Note: RVA Magazine contacted both the Virginia Department of Agriculture and Consumer Services (VDACS) and the Richmond Police Department with questions about enforcement, inspections, and regulatory oversight of hemp-derived products. Their full responses are included at the end of this article.
A Market Built on Loopholes
Merritt traces the problem back to the 2018 Farm Bill, which legalized hemp and inadvertently cracked open the door to a wave of hemp-derived cannabinoids including Delta-8, Delta-9, and THCA as long as they contained less than 0.3% THC by dry weight. That narrow legal threshold created a massive loophole: shops began selling products nearly identical to traditional cannabis in appearance and effect, but still technically legal under federal law.
In theory, these products are supposed to come with documentation: lab test results, batch numbers, and what’s known as a “chain of custody” certificate. In this context, chain of custody refers to the commercial paper trail documenting where the product originated, how it was tested, and who handled it along the supply chain, not to be confused with the forensic definition used in criminal investigations.
That documentation is meant to show that a product was sourced from a licensed grower, passed required testing, and entered retail legally.
But in practice, Merritt says the system is wide open to manipulation.
“Let’s say I buy a legal pound of weed from a certified farm in North Carolina,” he explained. “It comes with paperwork that says this batch passed testing. That’s my proof of where it came from and that it’s compliant.”
Once he had that paperwork, Merritt said, there was little stopping him, or anyone, from moving unregulated or higher-THC products under the same documents.
“There’s no way for the state to prove what you’re actually selling,” he said. “You can buy one legal pound and then move 20 illegal ones under the same paperwork.”
Because most smokable cannabis products like loose flower or vape cartridges aren’t individually batch-coded or pre-packaged in tamper-proof containers, there’s no way for regulators to link a specific item on a shelf to the lab report attached to it.
The result, Merritt says, is a shadow market hiding in plain sight, where packaging and paperwork are often more performative than protective.
The Flood of LED Shops
During the height of the pandemic, Merritt said, a perfect storm of easy capital and relaxed oversight sparked a retail explosion. PPE loans and stimulus checks allowed entrepreneurs, some legitimate, many opportunistic, to open vape and smoke shops with minimal barriers.
“It was a gold rush,” he said. “People, who already owned a business, were getting PPP money, $750,000 or more, and going into any available commercial space they could find. Suddenly, every strip mall and shopping plaza had one of these LED shops.”
Merritt said many of these businesses weren’t built to last. They leased spaces cheaply, often under triple-net leases, contracts that made tenants responsible for property taxes, insurance, and repairs but skipped those obligations entirely.
“They sign the lease with no intention of paying taxes or reimbursing the landlord for insurance,” Merritt said. “Then they disappear six months later, leave the inventory behind, and owe thousands in back rent. I’ve seen it firsthand, my landlord is still trying to unload the inventory from one that skipped out owing her $16,000.”
He contrasted this fly-by-night approach with the sense of place he tried to build at his own shop, Item Nine, which focused on showcasing local glass artists and offering curated, legal products. That kind of vision, he said, couldn’t survive in a marketplace defined by convenience and shortcuts.
By 2023, his revenue had dropped by more than half. “At first, people were spending $200, $300 on a glass piece. By the time I closed, they were asking what I had for $50. And I couldn’t even keep up with the import glass shops at that price. The market collapsed.”
These LED shops, he said, follow a predictable pattern: they sell imported goods, avoid product documentation, and turn high-volume sales with minimal concern for compliance. Often, Merritt added, they take advantage of regulatory gaps such as not paying Virginia’s nicotine excise tax by working with suppliers who don’t require it.
“They’ll just say they’re paying it themselves and never do,” he explained. “And there’s no one really checking.”
When they get caught, Merritt said, it’s rarely the end. “They just transfer the business to a cousin or another family member and keep going. It’s like pressing reset. No taxes. No accountability. Just another sign in the window, new name, same game.”
The sheer volume of shops, Merritt believes, is no accident. “When there’s a vape shop every 300 yards, people don’t have loyalty anymore. They’ll go to whichever one’s open, or closest, or delivers to their door.”
And with delivery services like Uber Eats and Gopuff now offering cones, wraps, and even vapes, convenience has completely overtaken curation.
“You used to go to Katra Gala or Kulture,” he said, referring to legacy smoke shops in Richmond. “Now you can get raw cones from 7-Eleven delivered to your house. Why would anyone come in and buy a $200 pipe when they can get a $10 vape down the block?”
Enforcement, Selective and Sparse
In Virginia, the job of regulating hemp-derived products like THC edibles falls to the Virginia Department of Agriculture and Consumer Services (VDACS). But even within that limited scope, smokables like loose flower and vape cartridges are excluded, enforcement appears to be inconsistent at best, and skewed at worst.
“They’ll go into a shop like mine with a clipboard and a checklist,” Merritt said. “They check every edible, make sure it has the right batch codes, right ratio, proper labeling. I was following the law using certified products, with full chain of custody. And yet I was the one getting inspected.”
Meanwhile, Merritt claims that enforcement is inconsistent and often bypasses certain retailers. “VDACS won’t even go into most of them,” he said. “One of their inspectors told me straight up – they avoid certain shops because they get ‘yelled at in a foreign language.’ That’s their excuse.”
It’s not just anecdotal, Merritt alleges. The Department reportedly has an unofficial policy of avoiding so-called C-stores, convenience stores with large drink coolers or gas pumps entirely.
That pattern, he argues, leaves compliant legacy retailers like his, and others with long histories in Richmond’s headshop community, carrying the burden of compliance, while newer or less transparent operators face fewer consequences.
The regulatory imbalance creates a chilling effect for those trying to do things by the book. “I was spending the extra money on tested products. I kept up with all the new requirements when they changed the laws around edibles last July. I had to explain to customers why something was more expensive because it was actually legal and safe.”
In contrast, Merritt said, many LED shops and convenience store counters continue to offer what he described as untested, high-potency edibles often with little to no warning labels or dosage information.
“I had a 100-pound college student walk in with a gummy that was 200 milligrams,” he recalled. “She said a local shop gave it to her for free. I told her not to eat it. I wouldn’t even take a nibble of something that strong without knowing what’s in it. That’s reckless.”
Merritt referenced one store in particular, which he described as “notorious” among local retailers. “In my experience, they sell 200 milligram edibles over the counter to anyone,” he said. “That’s the kind of thing that, in my opinion, leads to Poison Control calls and kids ending up in the ER. Some of these shops just don’t seem to care, they’ll hand out high-dose products just to get someone in the door.”
Part of the issue, Merritt says, is a jurisdictional loophole: edibles fall under VDACS, but smokables including vape pens and flower don’t. That means there’s no effective oversight for some of the most commonly sold and consumed products in LED shops. And even when there is a rulebook, enforcement depends on having enough staff and the will to apply it.
“The state has one cannabis department under agriculture,” Merritt said. “But they don’t have enough people. And even the people they do have won’t go into the places selling the worst stuff.”
In the end, it’s not just about uneven enforcement, it’s about who gets targeted for compliance, and who’s allowed to operate unchecked.
“I was trying to play by the rules,” he said. “But the rules don’t apply to everybody. And when you’re the only one following them, it just makes you a target.”
Where Enforcement Stops: Inside the Wholesale Gap
While many LED vape shops appear scattered and independent, Merritt believes the real engine behind the industry is hidden in plain sight: a handful of regional wholesalers quietly moving the majority of product.
“From what I saw, if you’re buying vapes, rolling papers, Zyns, glass, whatever, there’s a good chance it came through the same few places,” he said.
He described these wholesalers as convenient and well-stocked, but often operating with minimal scrutiny. The appeal, Merritt said, lies in how easy they make it to buy in bulk. “You can walk in, grab a cart, and start filling it with product,” he said. “They don’t ask a lot of questions.”
That lack of oversight, Merritt believes, has allowed some retailers to bypass stricter compliance practices especially around documentation, product sourcing, and tax responsibilities. While these concerns remain unverified, he argues the limited enforcement at the wholesale level has created significant risk. “No one’s checking what’s going out the door,” he said. “And because the retailer — not the distributor — is the one held liable for what’s being sold, that gap gives everyone cover.”
Merritt also suggested that some distributors exert influence over the local market in less visible ways, through long-standing relationships or informal networks that pressure smaller retailers to stay within certain supply chains. “If you don’t buy from the right place, you’re either priced out or cut off,” he said.
However, not everyone agrees that wholesale oversight remains as lax as it once was. Another Virginia retailer noted that some distributors have faced “six- to seven-figure fines” in recent years. “While this may have been an accurate statement a year or two ago, it’s definitely not valid anymore,” they said. “Distributors are being inspected and penalized.”
Still, Merritt and others argue that Virginia’s regulatory structure continues to focus heavily on retail storefronts, while upstream enforcement remains inconsistent.
“You can shut down five LED shops and ten more will open,” Merritt said. “But if you cut off the pipeline, or even start checking it, that’s when you’ll see the market change.”
Another View From the Inside
Not everyone in the industry sees things exactly the way Merritt does, but many of his concerns are echoed by other long-time retailers. One veteran headshop owner in Richmond, who asked to remain anonymous due to fear of retaliation, described a familiar pattern: legitimate, registered shops bearing the brunt of enforcement while less compliant competitors go unchecked.
“When VDACS came into my stores, they went line by line, photos, COAs, everything,” he said. “Meanwhile, I’ve got two shops across the street openly selling weed and gummies they’re not supposed to have. I told the inspector to check them out, then nothing. Those shops didn’t even make the inspection list.”
The shop owner confirmed that registering alone costs $1,000 per location, and the fines that follow are often based on “alleged” violations – violations that can sometimes be negotiated down. He compared the process to a kind of bureaucratic shakedown.
“Hey, your alleged violations are $50,000,” he recalled being told. “But pay $10,000 right now and we’ll go away for your alleged violations.”
That pressure, he said, forces small businesses into a corner: either absorb the fine and admit guilt or spend time and money fighting it. He chose the latter, hiring legal counsel for multiple stores, and was able to reduce the penalties. But the experience reinforced a troubling dynamic.
“They go after people like me who are trying to do things by the book,” he said. “But if you’re selling products that mimic cannabis but aren’t technically illegal or if you’re just flying under the radar, they leave you alone.”
He also confirmed just how saturated the market has become. “There are over 70 registered hemp retail locations in Richmond,” he said, “and probably three times that many operating without registering. Most of those are vape shops or convenience stores selling whatever they can get their hands on.”
To him, the problem isn’t just selective enforcement, it’s a mix of saturation, unclear policy, and wildly inconsistent regulation across jurisdictions.
“Chesterfield is trying to put up some guardrails. Henrico’s more relaxed. Richmond just keeps handing out business licenses. So we’re stuck and overregulated, while our competition isn’t regulated at all.”
A Call for Clarity and Collaboration
Barbara Biddle, a Northern Virginia-based entrepreneur and founder of the Cannabis Small Business Association (CSBA), owns and operates cannabis-related businesses in both Virginia and Washington, D.C.. She says the difference in how each jurisdiction handles licensing and oversight is stark and telling.
“In D.C., it’s much easier to get licensed,” Biddle said. “The process is more accessible, especially for people from communities harmed by the war on drugs. Virginia talks about equity, but in practice, those doors aren’t really open.”
She believes confusion around enforcement and shifting legality in Virginia isn’t just frustrating, it’s putting small business owners at risk. “There’s been a lapse in communication to the shop owners regarding, hey, this is legal versus illegal,” Biddle said. “Many of these shop owners are going to jail not even knowing what the products that they’re buying are.”
Some retailers, she noted, are fined or even criminally charged for selling items they believed were compliant, only to learn months later that regulations had quietly changed without clear guidance, warnings, or transition periods.
While Biddle acknowledges there are bad actors, she emphasized that many small businesses are trying to follow the rules, and would even be willing to pay additional fees to do so legally. “I think our industry participants would be more than happy paying an additional couple thousand dollars to access these products legally and offer the agencies money to effectively enforce,” she said.
She also pointed to a growing divide between licensed marijuana operators and hemp retailers, a split she says has influenced lobbying and legislation. “There’s been a civil war between marijuana and hemp businesses,” she said. “And oftentimes hemp businesses are painted as bad actors… while you’ll see in the same legislative session, laws around more freedom for medical marijuana operators being passed.”
And recently, she said, another player has entered the conversation: alcohol lobbyists. “We’re now seeing alcohol lobbyists in the room. Their numbers are not going up,” Biddle said. As cannabis products, whether legal or gray market, become more accessible, some established industries are starting to view them as direct competition. “They’re asking, ‘Why aren’t we taxing this space?”
To Biddle, the current system isn’t just under-resourced, it’s missing the opportunity for real dialogue. “We’d love to see more partnership from our government,” she said. “Not just come around with this big stick.”
A Market at a Crossroads
With enforcement limited, consumer protections uncertain, and price pressure coming from every direction, many long-time retailers like Merritt have exited the space altogether. What was once a subculture centered on glass art, community ties, and independent entrepreneurship has been flooded by high-turnover shops pushing unregulated products with little concern for safety or legality.
“I’m not afraid of competition,” Merritt said. “But I am tired of being the only one trying to do it right.”
He described spending years building a shop that celebrated Virginia’s glass artists, sourcing lab-tested products, and maintaining full compliance with shifting state regulations only to watch his lease expire while LED shops multiplied around him, skipping taxes, dodging inspections, and selling questionable goods for cash.
What happens next, he said, depends entirely on whether the state is willing to take the problem seriously.
“If you’re not going to enforce the rules, then don’t punish the people who try to follow them,” he said. “You either have a market that’s regulated, or you don’t. But you can’t say one thing and then only go after the people with storefronts and paperwork.”
Whether Richmond’s LED vape boom will crash, or simply continue unchecked, depends largely on how the state responds: by regulating consistently, enforcing fairly, and creating a legitimate path for small business owners to enter the cannabis economy. That means addressing distributor accountability, closing loopholes, and putting resources toward real oversight, not just inspections when it’s convenient.
“It’s not that complicated,” Merritt said. “Make it fair. Make it real. Give people like me a shot. And stop letting the people who don’t care about this place set the rules.”
Where It Goes From Here
While Virginia continues to wrestle with regulating its hemp-derived retail market, changes may soon come from the federal level. Congress is currently considering amendments to the 2024–2025 Farm Bill that would restrict or outright ban psychoactive hemp derivatives like Delta‑8, Delta‑10, and THCA — compounds that have flourished in the legal gray area created by the original 2018 bill.
These proposed changes aim to close the “loophole” that allows high-THC analogs to be sold under the guise of legality, despite their potent effects and unclear safety profiles. If enacted, they could upend an entire category of small businesses overnight — vape shops, head shops, and CBD stores that have built their revenue models around these now-ubiquitous products.
In Virginia, where state-level regulation has been inconsistent and legalization of recreational marijuana remains stalled, the impact could be especially severe. Hundreds of stores, many opened during the pandemic boom, might find themselves suddenly unable to sell their most in-demand products. And without a legal adult-use cannabis market to transition into, there may be no safety net for retailers, employees, or consumers.
At the city level, Richmond has begun to assert more control. Yesterday, City Council passed new zoning restrictions that bar vape and hemp retailers from opening within 1,000 feet of schools, parks, and residential areas, a move aimed at reducing saturation and youth exposure. While these changes won’t shutter existing stores or fix deeper regulatory inconsistencies at the state and federal levels, they mark an important step in acknowledging the problem and attempting to curb its spread locally.
Whether federal lawmakers intend it or not, the outcome of the next Farm Bill, combined with Virginia’s still-uncertain approach to cannabis, is likely to redefine the state’s cannabis-adjacent economy. If the state fails to act, and localities like Richmond are left to shoulder the burden alone, what’s now a patchwork system could harden into a permanent divide: between those trying to follow the rules, and those who’ve learned how to work around them.
Main Photo by Mahavir Shah
RPD Enforcement: What the Police Say About Vape Shop Investigations
As part of our reporting, RVA Magazine reached out to the Richmond Police Department (RPD) with several questions about how enforcement works around smokable hemp, vape shops, and Delta-8/THCA products. Below is their full response, edited only for formatting and clarity.
Does the Richmond Police Department play a role in the enforcement or inspection of retailers selling smokable hemp products, vapes, or high-potency THC analogs such as Delta-8 or THCA?
In general, the Community Code Enforcement Team (CCET), formed out of the mayor’s office and staffed with professionals from various City of Richmond departments, inspects businesses for code violations. These violations, such as fire hazards as determined by a Richmond Fire Department fire marshal, can result in closure of a business as occurred at a vape shop in Northside in 2024. The Richmond Police Department’s Community, Youth and Intervention Services unit has staff that works with CCET.
RPD will launch investigations into illegal businesses when provided information about illegal operations. Recently, the department has provided information to magistrates and were granted search warrants to execute several searches at vape shops in 2025, some resulting in arrests and seizures of narcotics. Of course, as a result of due process, seizures and charges to individuals do not result in the immediate shuttering of a business. Lengthier investigations are often needed to establish the true scope of an illegal operation.
Is RPD involved in or aware of any inter-agency enforcement efforts with the Virginia Department of Agriculture and Consumer Services (VDACS), ABC, or other regulatory bodies related to these products?
At this time, RPD is not coordinating with other regional public safety partners for enforcement of potential illegal activity at vape shops.
We’ve heard from multiple business owners and community members that some shops appear to be “raided” or cited, yet reopen the next day with little to no visible consequence. Could you speak to why this might happen, and whether it’s due to jurisdictional limits, legal ambiguity, or resource challenges?
RPD noted that while searches and seizures may occur following the execution of a search warrant, the closure of a business is not always immediate. Due process and lengthier investigations are often required to determine the full extent of illegal activity before permanent consequences can be applied. Some cases may require broader legal or civil actions that fall outside police jurisdiction.
Does RPD consider any of these retail operations to be a public safety concern (e.g., due to unregulated high-dose products or proximity to schools), and is any policy or guidance currently in place to address them?
Illegality at any business is a public safety concern that RPD takes seriously. In recent months, several armed robberies occurred at vape shops. RPD detectives are investigating these armed robberies and may be able to share information about successful investigations with the public soon.
Anyone with information about illegal operations at vape shops, or any other business, is asked to call Crime Stoppers at (804) 780-1000.
VDACS Responds: Enforcement and Oversight of Hemp-Derived Products in Virginia
RVA Magazine reached out to the Virginia Department of Agriculture and Consumer Services (VDACS) with questions about the state’s current approach to hemp-derived product enforcement. Below are the agency’s responses in full:
How does your agency currently enforce labeling, chain-of-custody, and compliance standards for hemp-derived edibles sold at retail locations?
Edible hemp products are evaluated for compliance according to § 3.2-5145, 2VAC5-595, 59.1-200 (A)(73), 59.1-200 (A)(72), and 59.1-200 (A)(69). A list of the requirements for selling edible hemp products can be found on the Edible Hemp Disclosure Form.
Are VDACS inspectors directed to visit convenience stores, gas stations, and other non-specialty retailers that may carry hemp-derived products? How are decisions made about which types of stores are prioritized or excluded from inspections?
VDACS conducts inspections at retail, manufacturing, and warehouse facilities that offer hemp products intended for human consumption. This includes facilities that submit edible hemp disclosure forms and register as a hemp product retail facility. Additionally, unregistered facilities are inspected when VDACS becomes aware of their operations through routine inspections, territorial surveys, or complaints.
Can you clarify the scope and limitations of VDACS’ enforcement authority, particularly in relation to cannabis-adjacent products like vape cartridges, smokable hemp flower, and other non-edible derivatives?
The Office of Hemp Enforcement has full legal authority to regulate inhalable hemp products under the Code of Virginia, Article 4: Regulated Hemp Products. Any marijuana products found during an inspection are referred to law enforcement for further investigation.
We’ve heard from several retailers who feel that enforcement actions tend to focus on established or “legacy” smoke shops while other stores operating without clear compliance protocols appear to receive less scrutiny. Would VDACS like to respond to those concerns?
VDACS conducts inspections and enforcement on all businesses offering hemp products for consumption. Inspections at unregistered facilities result in a $2,000 civil penalty for non-compliance with registration requirements. Business owners aware of violations are encouraged to report them to hempenforcement@vdacs.virginia.gov.
Upon reviewing the Office of Hemp Enforcement Registrations list, we noted approximately 70 registered hemp retail businesses in Richmond. However, industry sources estimate that many more retailers including unregistered vape shops and convenience stores—are actively selling hemp-derived products. How are businesses selected for inspection?
Since launching in July 2023, the Office of Hemp Enforcement has been actively expanding its inventory of hemp-related businesses. Both registered and unregistered facilities are subject to inspection. The submission of edible hemp disclosure forms and retail facility registrations can trigger inspections, but the agency also initiates inspections based on observed sales activity.
Could you speak to whether wholesale distributors of hemp-derived products, such as those supplying retailers,fall within VDACS’ enforcement purview? Some retailers argue that upstream suppliers operate with less scrutiny than storefronts.
VDACS has the authority to inspect wholesale distributors and manufacturers of hemp products under § 3.2-5145.2:1. The agency has conducted—and will continue to conduct—inspections of these entities.
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