Can't launch virtual machine on WSL2

Am I missing something? Or is this a bug with WSL2?

$ lxc launch images:ubuntu/focal ubuntu --vm
Creating ubuntu
Starting ubuntu
Error: Failed to run: modprobe vhost_vsock: modprobe: FATAL: Module vhost_vsock not found in directory /lib/modules/4.19.104-microsoft-standard
Try `lxc info --show-log local:ubuntu` for more info

$ lxc info --show-log local:ubuntu
Name: ubuntu
Location: none
Remote: unix://
Architecture: x86_64
Created: 2020/11/21 08:00 UTC
Status: Stopped
Type: virtual-machine
Profiles: default
Error: open /var/snap/lxd/common/lxd/logs/ubuntu/qemu.log: no such file or directory

$ snap list lxd
Name  Version  Rev    Tracking         Publisher   Notes
lxd   4.8      18324  latest/stable/…  canonical✓  -

Looks like the wsl2 kernel does not support the needed bits to run virtual machines.