The D.C. Council Approved Legal Marijuana Sales Even Though Congress Said No!

Bree claims her mood has changed for the better and that she is positive for the first time in a long time. We’ve put in a lot of time and effort trying to get regulated, she says. Bree owns and manages two marijuana gift shops in the District of Columbia, which have been operating for years in a legal and regulatory grey area that the District has been unable to rectify, partly due to inaction on the part of Congress.

Bree (we’re just using her first name because of the legal gray area in which her industry still operates) now has a chance to become a legitimate business thanks to a new comprehensive law passed by the D.C. Council on Tuesday. Following the council’s overwhelming approval, the city’s existing medicinal Marijuana program will be significantly expanded.

It removes restrictions on the total number of dispensaries and growing facilities that can set up shops in a given area. It allows dispensaries to offer delivery services, classes like cooking demonstrations, online purchases, and smoking places for customers. In addition, a large portion of the new licenses is reserved for applicants who fall into the “social equity” category,

which includes persons with low incomes, those who reside in low-income neighborhoods, and ex-offenders. In addition, the law will make permanent an interim measure passed last summer that eliminates the necessity for a physician’s recommendation for obtaining a medical marijuana card. There’s more to the law, though.

It also allows the city’s many “gifting stores” to apply for medical marijuana licenses, allowing them to leave the unregulated and illegal “gray” market, which is frequently subject to police raids. These stores are similar to the dispensary-style retailers that Bree operates, where anyone can buy an expensive sticker or article of clothing and get a “gift” of Marijuana.

At first glance, the law seems to be nothing more than an attempt to increase access to medical marijuana, which has been authorized for nearly ten years. But it’s also an innovative answer to a problem that can’t be fixed by the municipality alone. D.C. officials have wanted to legalize and regulate sales of recreational marijuana for a long time, but they have been blocked by Congress.

While that ban was removed from the $1.7 trillion federal spending package up for a vote in Congress this week, it was a major factor in the rise of the unregulated giving industry, which officials estimate generates more than $600 million annually and began as a few special events. Voters in D.C. adopted Initiative 71 in late 2014, making it legal to possess, cultivate, use, and distribute small amounts of marijuana.

Unlicensed and unauthorized businesses will always have an edge because they are exempt from certain requirements, such as taxation and quality assurance. Congress is complicit in this because it prevents us from regulating it. It’s a serious threat to public safety,” Mendelson told DCist/WAMU on Tuesday. In response to the expansion of the gifting sector, the city’s few and strictly controlled medical marijuana dispensaries and cultivators voiced their concern that they were losing consumers and money.

In response, lawmakers have loosened regulations, culminating in a vote earlier this year to let people self-certify for medical marijuana. (Just because of that, enrollment in the state’s medical marijuana program has increased from 12,000 this year to around 25,000 in November.) The gifting business is becoming increasingly organized and politically active, but what to do about them remains a contentious issue.

The District of Columbia cannot legalize gifting, and Chairman Phil Mendelson‘s efforts to increase civil enforcement on gifting have been met with resistance. Unfortunately, many of his peers ultimately rejected his attempts out of concern that Black-owned businesses and their employees would bear the brunt of any consequences.

After weeks of back-and-forth, including on a recent three-hour Amtrak train ride home from a conference, they both attended, Mendelson and Councilmember Kenyan McDuffie (D-Ward 5) came up with a novel solution: the gift shops would be given a generous “on-ramp” into the legal and newly expanded medical marijuana market, with an emphasis on offering licenses to local and minority applicants.

Some donors see the bill as an ingenious way to legalize and regulate a market that already exists using the only mechanism the city has available to it, while others insist that the lawmakers are in violation of the congressional prohibition because they are technically legalizing recreational sales. The end of the giving model is inevitable, in my opinion. You had a fantastic streak there. There was a lot of distance covered. It brought with it both good and bad.

To operate in Washington, D.C., where we just do not and most likely will not have state autonomy, this is the only solution,” says Mark Nagib, co-owner of Pink Fox, an upscale clothing and gift store. We were stuck between a rock and a hard place. Bree acknowledges that entering the medicinal marijuana business in anticipation of a recreational-use market is a “strange place to be,” but she maintains that doing so will provide existing gifters with the credibility and security they currently lack.

“When you look at California,” she continues, “medicinal stores turned recreational dispensaries as soon as that law passed.” That’s the bill’s proverbial carrot, but it also comes with a stick in the form of stricter civil enforcement against anyone who gives away Marijuana without first applying for a medical marijuana license and proving they qualify for one. For the most part, the law is a positive development, according to David Grosso, a former council member and current lobbyist for D.C.

Cannabis Trade Association, which represents existing medical marijuana firms. We’d like to see fair treatment for everyone, which hasn’t been the case for as long as the [Initiative 71] has been sneaking around behind the scenes. As a result, we believe that this initiative will help them enter the legal market, where they will be treated fairly together with us.

And that means all the regulations that come with it, the fees that you have to pay, the inspections that you have to endure, and all 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,” said Grosso in an interview.

Grosso says his customers are pleased with the measure because it contains a clause limiting packaging and advertising that could appeal to youngsters, and because it will allow them to deduct business expenses from local taxes (something not allowed on federal taxes). However, he wishes that the law was enforced more quickly against gift givers who do not obtain permits.

In a statement, the Generational Equity Movement, an alliance of certain donors, called the legislation “progress.” Another group of gift givers, the I-71 Committee, thinks the law is a big improvement over earlier versions that would have made the licensing process more streamlined and sped up civil enforcement.

But the committee is concerned that new farmers won’t be able to keep up with supply if a large number of dispensaries open. Bree says she is thrilled by the prospect of applying for a medical marijuana license and is especially relieved to learn that certain permits will be reserved for citizens of color who were affected by the war on drugs. “We worked very hard to have a direct route into the sector,” she recalls.