Last week, Virginia became the 16th U.S. state to legalize recreational marijuana. Adults ages 21 and older will be able to possess up to an ounce of cannabis beginning on July 1, 2021.

It's going to be a while longer before the retail cannabis market opens in Virginia. State lawmakers set a Jan. 1, 2024 date for companies to begin selling recreational marijuana.

Still, a potentially large recreational pot market is on the way. And there's one cannabis stock poised to be the biggest winner with Virginia's marijuana legalization -- Jushi Holdings (OTC:JUSHF).

Now entering Virginia sign with a cannabis leaf image on it

Image source: Getty Images.

Jushi's Virginia advantage

As of December 2020, Jushi owns 100% of Dalitso. That's important because Dalitso is currently one of only five applicants that have won a pharmaceutical-processor permit from the Virginia Board of Pharmacy.

Jushi recently completed the acquisition of Dalitso's 93,000 square-foot cultivation, manufacturing, processing, and retail facility in Manassas, Virginia. The deal also gives Jushi around nine acres of adjacent land in Prince William County.

The company has already opened its first BEYOND/HELLO medical cannabis dispensary in Virginia. It plans to launch five additional dispensaries in the future in Northern Virginia. This region includes two of the state's most heavily populated counties (Fairfax and Prince William County) and makes up nearly 30% of Virginia's total population.

Just because Jushi has a head start in Virginia's medical cannabis market doesn't automatically mean the company will win in the state's recreational market. However, it could give the company a leg up when the state begins to issue licenses for recreational-cannabis retailers.

Jushi also should be able to establish brand recognition for its BEYOND/HELLO dispensaries over the next couple of years. When 2024 rolls around, potential recreational marijuana users could already be familiar with Jushi -- a big plus that would help the company hit the ground running if it secures retail licenses for the recreational market.

Beyond Old Dominion

Virginia is just one of several growth opportunities for Jushi. The company is a rapidly rising multistate operator (MSO) with 17 retail cannabis stores in four states.

Jushi has its biggest presence is in Pennsylvania and recently opened its 11th store in the state. Much of the company's 67% year-over-year revenue growth in the third quarter of 2020 stemmed from its Pennsylvania operations.

Illinois is another major market for the company. Jushi operates four retail cannabis stores in the state, where the legal recreational marijuana market opened last year.

The MSO is also building its business in California, the largest legal cannabis market in the U.S. Jushi currently has one retail store in Santa Barbara and is acquiring a dispensary in Palm Springs, as well as a 78% stake in a retail-license holder in Grover Beach. In addition, Jushi is one of only three applicants for a retail permit in Culver City.

The company is expanding into Nevada, as well, thanks to its recent acquisition of Franklin Bioscience. This deal gives Jushi licenses for medical and recreational cannabis cultivation, processing, and distribution with operational facilities in north Las Vegas.

A top pot stock to buy

My Motley Fool colleague Zhiyuan Sun views Jushi as one of the three best marijuana stocks to buy in 2021. I think he's right.

Jushi's shares trade at around three times expected sales. That gives the MSO one of the least expensive valuations among U.S. pot stocks. And Jushi is a much better bargain than any of the leading Canadian cannabis producers.

The company's significant opportunity in Virginia is just icing on the cake.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.