Pathogenic bacteria in the genus Xanthomonas collectively cause disease on many host plants, including Cannabis sativa (cannabis). We sequenced the genomes of two strains that were previously isolated from diseased cannabis in Japan and Romania. Comparative MLSA and whole genome sequence analyses based on average nucleotide identity (ANI) demonstrated that these strains belong to the same species. Genome analysis revealed that neither strain possesses a Type III secretion system (T3SS), a major virulence secretion system, or Type III-secreted virulence effectors found in many Xanthomonas spp. Most notably the genomes contained genes encoding the T3SS regulators HrpG and HrpX. Promoter prediction of HrpX-regulated genes suggests that HrpX regulates the expression of Type II-secreted hydrolytic enzymes, which are similarly found in other plant-pathogenic Xanthomonas strains. The genome of distantly related rice isolate, Xanthomonas strain 97M, similarly lacks the T3SS but encodes HrpG, HrpX and putatively HrpX-regulated hydrolytic enzymes. Further comparative genome analysis using ANI suggest that Xanthomonas sp. strain Nyagatare is in the same species as the cannabis strains, but intriguingly X. sp. str. Nyagatare possesses a T3SS and associated effectors. We propose a stepwise evolution of pathogenicity in Xanthomonas spp. where strains acquire: 1) pathogenicity regulators HrpG and HrpX and then 2) T3SS and T3-secreted effector genes.