Stochastic precipitation generators (SPGs) are a class of statistical models which generate synthetic data that can simulate dry and wet rainfall stretches for long durations. Generated precipitation time series data are used in climate projections, impact assessment of extreme weather events, and water resource and agricultural management. We construct an SPG for daily precipitation data that is specified as a semi-continuous distribution at every location, with a point mass at zero for no precipitation and a mixture of two exponential distributions for positive precipitation. Our generators are obtained as hidden Markov models (HMMs) where the underlying climate conditions form the states. We fit a 3-state HMM to daily precipitation data for the Chesapeake Bay watershed in the Eastern coast of the USA for the wet season months of July to September from 2000–2019. Data is obtained from the GPM-IMERG remote sensing dataset, and existing work on variational HMMs is extended to incorporate semi-continuous emission distributions. In light of the high spatial dimension of the data, a stochastic optimization implementation allows for computational speedup. The most likely sequence of underlying states is estimated using the Viterbi algorithm, and we are able to identify differences in the weather regimes associated with the states of the proposed model. Synthetic data generated from the HMM can reproduce monthly precipitation statistics as well as spatial dependency present in the historical GPM-IMERG data.