Local lawmakers in Washington, D.C. last week passed legislation to expand medical marijuana sales, giving the city’s popular but unlicensed weed gifting shops a path to the regulated market. The bill, which was approved by the D.C. district council on December 20, comes after Congress included an existing prohibition on regulated adult-use cannabis sales in the nation’s capital as part of a spending bill approved last week.

The bill significantly expands Washington, D.C.’s medical marijuana program, lifting a cap on dispensaries and increasing the number of authorized cultivation facilities. The legislation also creates licenses for new types of cannabis businesses, including marijuana delivery services, online sales, educational programs such as cooking classes, and cannabis consumption areas at dispensaries. Half of the new licenses will be reserved for social equity applicants, which are defined as D.C. residents who have a low income, have spent time in prison, or are related to someone who was incarcerated for a cannabis or drug-related offense.

Bill Addresses D.C.’s Weed Gifting Shops

The legislation is designed to address the vast unregulated market for cannabis in Washington, D.C., where medical marijuana was legalized by local lawmakers in 2010. In 2014, voters approved Initiative 71, a ballot measure to legalize recreational marijuana. Under the measure, adults can possess up to two ounces of marijuana, are permitted to grow cannabis at home, and may gift up to one ounce of weed to another adult. However, Congress, which has control over the Washington, D.C. budget, has refused to allow the city to spend money on regulating recreational marijuana sales.

The situation has led to dozens of businesses that take advantage of the gifting provision of I-71 to distribute cannabis openly from storefront businesses. Under the common scheme, businesses sell benign merchandise such as apparel or art, offering what is ostensibly a free gift of marijuana with the purchase. Phil Mendelson, the Chairman of the Council of the District of Columbia, estimates the unregulated marijuana market in the nation’s capital is worth as much as $600 million per year. 

“There’s always going to be an advantage to unlicensed and unregulated: they don’t have to pay taxes, they don’t have to ensure quality,” Mendelson said in an interview with DCist/WAMU. “Congress is aiding and abetting that by prohibiting us from regulating that. It’s a real public safety problem,” he said.

Patients Can Self-Certify To Use Medical Marijuana

The legislation passed last week also makes permanent an emergency measure passed earlier this year that allows adults to certify their own eligibility to use medical marijuana, eliminating a previous provision that required certification by a licensed physician. At the time, Mendelson and some members also attempted to enact prohibitions on the gifting industry but faced opposition from a group of business owners. Legalizing the shops so they could be regulated was not possible under the congressional ban, making allowing gifting businesses a path to the medical marijuana market an option popular with a majority of the district council.

“It’s going to allow the District to be a lot healthier on the cannabis side,” Terrence White, chairman of a group known as the i-71 Committee and a gifting shop owner, told the Washington Post. “It’s going to allow us to be doing it ‘right,’ as I call it.”

The bill passed by the council last week gives existing operators 90 days to apply for a medical marijuana retailer license and prevents enforcement against gifting shops for at least 315 days after the legislation goes into effect. David Grosso, a former council member and current lobbyist for the D.C. Cannabis Trade Association, a group representing licensed medical marijuana operators, said that the bill is a positive development for the industry.

“We certainly would like to see a level playing field across the board, and that hasn’t been the case for as long as the [Initiative 71] folks have been operating illegally. And so we’re hopeful that this effort will bring them into the legal market and then treat them equally with us,” said Grosso. “And that means all the regulations that come with it, the fees that you have to pay, the inspections you have to endure, all of the restrictions around where you can locate, and everything like that which the current legal market has had to deal with now for more than ten years, which is a huge burden on us.”

Norbert Pickett, the owner of Cannabliss, one of the seven licensed medical dispensaries located in the nation’s capital, agreed, saying that the legislation is an opportunity to expand Washington, D.C.’s medical marijuana market and provide new options for patients.

“It gives patients more access to safe and tested cannabis,” he said. “It unifies unregulated market and the legal market. For me, that’s a win.”

Mackenzie Mann, project manager for the gifting industry trade group Generational Equity Movement, said that the legislation from the district council is a drastic change for Washington, D.C.’s cannabis landscape.

“It’s surreal,” Mann said. “A year ago, they were trying to shut us down.”

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Cannabis gifting storefronts and delivery services in Washington, DC are bracing themselves today for a DC City Council emergency vote scheduled for tomorrow, April 5, 2022, that could drive them back underground.

Initiative 71 legalized cannabis for recreational use in DC in 2014, with 64.87% of voters approving the measure. However, DC’s lack of statehood means that the city budget has to be approved by Congress — and immediately following the passage of the initiative, Maryland Republican Rep. Andy Harris introduced an amendment to the bill known as the Harris Rider that has effectively allowed Congress to block the city government from legalizing commercial adult-use sales.

Residents of DC are currently allowed to possess up to two ounces of cannabis, grow up to six plants, and gift up to an ounce to other adults, but commercial sales remain banned due to the Harris Rider. Over the last several years, this has led to a “gifting economy,” a creative workaround in which customers purchase an item such as a T-shirt, digital artwork, gym membership or other product and receive a cannabis gift in exchange.

This has led to some tension between medical cannabis dispensary owners and the folks running gifting services. It’s also attracted the ire of DC City Council Chairman Phil Mendelson, who has attempted to take action against I-71 gifting shops several times.

Last year, Mendelson introduced an emergency bill to empower city agencies to engage in “revocation of licenses, sealing of premises, and fines for businesses purchasing, selling or exchanging marijuana.” The language in the bill that would have increased enforcement on gifting businesses, including a fine of up to $30,000, was removed one day ahead of the vote.

Now Mendelson has revived the fight, calling for an emergency vote tomorrow that would allow the city to close down gifting businesses starting in mid-May, while also eliminating the need for a doctor’s recommendation for anyone procuring medical cannabis from DC dispensaries by self-certifying their medical use. This move is supported by many medical cannabis dispensary owners, who complain that they’re losing business to gifting stores, which operate in a gray area of the law due to the Harris Rider.

A resolution from Mendelson’s office, reported by DCist.com, declares that “Several dozen illegal cannabis businesses are currently operating in the District. These businesses … do not pay the fees and taxes licensed facilities must pay, putting licensed cannabis businesses at a competitive disadvantage.”

Under I-71, DC residents can grow up to six plants for personal use and gifting — but home growers accused of running an illegal service could be fined $30,000 and locked out of their residence for 96 hours.

DC residents can contact council members to let them know they don’t want their taxes being used to shut down cannabis gifting stores. The vote is scheduled for tomorrow’s legislative session.

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