Relatively cheap labor, a growing population of middling planters, the increasing worldwide demand for tobacco, and a system of regulation designed to maintain the quality of the product all contributed to the creation of a tobacco industry in Virginia, especially in the Piedmont area.

When Virginians first began exporting tobacco, they relied on building personal relationships with English merchants to whom they sold their wares. This allowed planters to receive payment immediately instead of waiting for the tobacco to be sold in Europe. But as tobacco prices fell in the 1680s and 1690s and the market became less stable, it was more economical for planters to ship at their own risk to England, where a commission agent would, for a fee of 2.5 percent, store the tobacco, pay all duties and fees, sell it, and use the profits as his client directed. By 1730 approximately 40 percent of Chesapeake tobacco was being shipped by the consignment system.

Merchants sent agents, or factors, to Virginia to liaise with the planters from whom they purchased tobacco. Factors operated from the small port towns on the Chesapeake Bay and the major rivers and opened stores, where they sold manufactured goods from Great Britain on credit. They also sent agents to buy tobacco directly from middling to small planters who could not afford the costs of consignment. The store system was dominated by enterprising young Scotsmen who had access to cheaper, faster shipping routes and whose operating costs were lower than those of their English counterparts. As a result, Scotland took over a large portion of the tobacco trade from London. In 1720, Scotland, Bristol, and Liverpool transported about 40 percent of the Chesapeake's tobacco.

Because goods were bought with promissory notes that represented a certain amount of tobacco, quality control was vital to the industry's success. This issue had concerned Virginia's politicians since 1619, when the first inspection law was passed. The law ordered all low-quality tobacco brought to the Jamestown inspection site to be burned. The General Assembly amended the law in 1623 to allow for selected men in each settlement to condemn such tobacco. A 1630 law disallowed accepting inferior tobacco in payment of debts; anyone who did so lost his right to plant tobacco and could only recover it by petitioning the General Assembly. In 1633 five sites for the inspection of tobacco were named: Cheskiack, Denbigh, James City, Shirley Hundred Island, and Southampton River in Elizabeth City . By the end of that year two more sites had been chosen at Warrosquyoake and between Weyanoke and the falls of the James, but no warehouses were built there. An act of 1639 added 213 inspectors to be appointed, 3 in each district.

In 1641, all of the various acts for tobacco inspection were repealed. Only the section of the 1630 act that had required the settlement commanders to choose two or three tobacco inspectors remained on the books. Tobacco cultivation spread west and north into frontier areas, where the planters paid less attention to the quality of the leaf. They used mostly outpost merchants to sell their tobacco to Scottish merchants, who then resold the tobacco in northern Europe, where such tobacco was palatable.

In 1680, to accelerate growth, the General Assembly passed the first act to create port towns and warehouses, where imported goods and those intended for export would be stored. Warehouses already existed at some of the proposed sites, which spread across twenty counties: Accomac at Calvert's Neck, Charles City at Flowerdew Hundred, Elizabeth City at Hampton, Essex at Hobb's Hole, Gloucester at Tindall's Point, Henrico at Varina, James City at James City, Isle of Wight at Pates Field on the Pagan River, Lancaster on the Corotoman River, Middlesex on Urbanna Creek, Nansemond at Dues Point, New Kent at the Brick House, Norfolk on the Elizabeth River at the mouth of the Eastern River, Northampton on Kings Creek, Northumberland at Chickacony, Rappahannock at Hobb's Hole, Stafford at Pease Point at the mouth of Deep Creek, Surry at Smith's Fort, Warwick at the mouth of Deep Creek, Westmoreland at Nomini, and York at Ship Honors Store.

In 1713, the assembly passed an act that required owners of warehouses within a mile of public landings to maintain those warehouses. In areas where there were no such warehouses, the county courts were authorized to have them built. For owners of sites designated for new warehouses who refused to erect the buildings, the county could appraise the land and then build the warehouse with public moneys, with the proviso that when the warehouse ceased to be used, the land would revert to the original owner. Lieutenant Governor Alexander Spotswood and the assembly hoped that by standardizing tobacco inspection and rooting out all inferior grades, the price of tobacco would rise. (Spotswood also hoped that appointing politicians as inspectors would increase his power in Virginia.) In fact, prices rose for a time after passage of the act, although the 1713 legislation may not have been responsible. A further act of 1720 stipulated that all warehouses not convenient to the public landings should be discontinued. Thereafter, warehouses were built where necessary and others were abandoned. Inspection warehouses, however, were not authorized above the fall line until after the Revolution.

The General Assembly passed the next significant inspection act in 1730 at the instigation of Governor Sir William Gooch. Incorporating the 1713 act, Gooch's 1730 act recognized that Virginia tobacco of inferior quality was still reaching England. Because of resistance from planters large and small, it was debated for nearly a decade before it passed. The law mandated a system of two inspectors at each warehouse to make sure that only the higher-quality leaves were packed into hogsheads (the size of which was regulated by the 1730 law). If a dispute arose between those inspectors, a third could be summoned to settle the matter. This ended the practice of shipping bulk tobacco. Heavy penalties kept the inspectors from allowing the shipment of defective tobacco, entering the tobacco business themselves, or accepting rewards. Under the new law, burgesses and sheriffs were not eligible to serve as inspectors—limiting the governor's ability to use inspectorships as patronage positions. Tobacco used to pay public or private debts had to be inspected under the same rule. The inspectors opened the hogsheads and checked two samples for any defective tobacco, which was to be burned in the warehouse kiln. If the owner refused to have his tobacco inspected, the entire hogshead was to be burned. Tobacco notes were issued to the owners of hogsheads that successfully passed the inspection—these notes were used as legal currency until the French and Indian War (1754–1763), when Virginia began printing money.

The law was unpopular, especially with small-volume planters, who had to pay to move all of their hogsheads to warehouses. In an election called in 1735, the year after the House of Burgesses renewed the act, 45 percent of the incumbent burgesses—many of whom supported the law—were defeated. Nevertheless, the 1730 inspection law lasted until October 1775, when it expired; it was reinstated a year later.

As a result of the tobacco trade and the warehouse inspection system, towns grew up at Norfolk, Urbanna, and Yorktown by the early years of the eighteenth century. By midcentury, Alexandria, Fredericksburg, Petersburg, and Richmond had also grown into important port towns. Only Norfolk, however, contained more than a few hundred citizens, and in 1736 it received a self-governing borough charter with its own common council, mayor, and aldermen. By the mid-1770s Norfolk, with a population of about 6,000, had become Virginia's busiest port and largest city.