In a strategic move to regulate tobacco production and enhance revenue from the colonies, the English crown enacted a ban on tobacco farming within England. This prohibition effectively restricted local cultivation and ensured that the cultivation of tobacco would be the monopoly of the Virginia Company, which was already established in the Virginia colony. As part of this agreement, the Virginia Company was required to pay a tax of one shilling for every pound of tobacco produced, creating a structured tax revenue stream for the English government. The Virginia Company's cultivation efforts would focus on exporting tobacco to England, capitalizing on the rising demand for the product in Europe.

By granting the Virginia Company this monopoly, the English crown hoped to control the production, distribution, and profitability of tobacco, which was quickly becoming a lucrative commodity. The arrangement allowed for better regulation of quality and price, as well as a means to foster economic ties between the colonies and the mother country. Additionally, this decision would encourage the expansion of tobacco plantations in Virginia, leading to increased settlements and labor demands, including the use of indentured servants and, later, enslaved persons.

This episode in colonial history significantly shaped the economy of Virginia and the American colonies as a whole. The shifting focus toward cash crops like tobacco laid the groundwork for the plantation economy, which would dominate the Southern colonies in the years to come. The rise of tobacco production also set the stage for social and economic patterns, including land ownership and the reliance on labor-intensive agriculture, that would define American society for centuries.