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D.C. Gears Up for Adult-Use Cannabis Sales

Washington, D.C., is best known as a Congressional battleground, the stage for legislative developments that impact the country.

But beyond the new iron fences around the Capitol, the District itself is a vibrant city full of culture and ethnic history. And thanks to centuries-old laws that give Congress broad oversight over the capital, it’s home to the most unique cannabis industry structure in the nation: Despite it being legal to possess and even grow at home, it’s been against the law to sell cannabis in D.C. since legalization took effect six years ago.

Yet industry activists and stakeholders believe change is imminent, now that the White House has a new occupant and the Senate is controlled by Democrats. The D.C. government appears to agree: According to officials, preparation is already underway for local licensing and regulation of adult-use cannabis sales. 

Cannabis Business Times and Cannabis Dispensary spoke to experts in the D.C. cannabis scene about how the new industry should be regulated and the most probable path to establishing adult-use sales in the District.

What’s the current status of cannabis in D.C.?

D.C. legalized cannabis with its Initiative 71, which passed in 2014 and went into effect in February 2015. The new law allowed adult residents to possess up to two ounces of cannabis, grow up to six plants at home and consume on private property. Residents are also allowed to “gift” someone up to an ounce, but sales of any amount are prohibited thanks to the infamous “Harris Rider,” a provision blocking D.C. cannabis sales which for years was added onto the federal budget by Rep. Andy Harris (R-MD). 

The prohibition on sales has created an industry of discrete “pop-up” marketplaces, often staged at a private residence or other location revealed only to attendees. Though these underground “dispensaries” are often heavily-guarded, they are also frequent targets of police raids and violent crime, particularly robbery, since perpetrators know vendors are in a legal grey area and unlikely to call the police or report the incident.

Recent movement on D.C. cannabis sales

Early in 2021, the government moved to rectify the situation through local legislation. Two separate bills have been introduced: Mayor Muriel Bowser’s Safe Cannabis Sales Act of 2021, and Councilmember Phil Mendelson’s Comprehensive Cannabis Legalization and Regulation Act of 2021

The bills are similar but contain some important differences. Mayor Bowser’s bill sets specific caps on the amount of revenue to be put towards community grants and business startup assistance, while Councilman Mendelson’s bill devotes 50% of cannabis revenue into a Community Reinvestment Fund and 30% into a Social Equity Fund to provide loans and assistance to social equity license applicants. The Mayor’s bill also limits license types to just five kinds, although both bills create microbusiness license categories. Bowser’s bill also has a higher tax rate at 17%, compared to 13% in Mendelson’s proposal.

Comparing bills and predicting the future

Activists seem to have a clear preference for Councilmember Mendelson’s plan.

“The mayor’s bill doesn’t even deserve to be taken seriously,” said Adam Eidinger, founder of advocacy group DC Marijuana Justice and an integral figure in the passing of Initiative 71 in the District. 

Eidinger told Cannabis Business Times and Cannabis Dispensary that Bowser’s bill would effectively end homegrow, an important provision in legalization bills that provides for equitable access to cannabis.

“It has a ten-ounce rule. ... You can’t have more than ten ounces of cannabis in your house under her bill,” added Eidinger. “Why is that even in there? It’s in there to enrich the corporate establishment that doesn’t like home cultivation.”

Eidinger argued that any legalization bill should go the opposite direction and raise or remove the current six-plant limit. He stressed that the District would be best served by the creation of a “cottage industry” for cannabis, similar to craft beer or produce.

“We’re going to the councilmembers systematically and we’re asking them, ‘Have you considered casual sales first? Have you considered farmers’ markets and giving home growers a lawful way to sell their cannabis?’” said Eidinger. 

“What we’re not fighting for is a closed, high-barrier to entry [industry with] limited numbers of licenses for cultivators and sellers. We would rather see the free market roll. ... Let the chips fall where they may and the best companies rise to the top. ... I think we can get a cottage industry here—we are really suited for it.”

In March, the Drug Policy Alliance also released a statement expressing preference for Councilman Mendelson’s bill.

Morgan Fox, media relations director for the National Cannabis Industry Association, which has offices in the District, agreed that cannabis sales will likely be allowed in D.C. sooner rather than late—possibly even before federal movement on cannabis.

“I think that the chances of Congress passing an appropriations bill that omits the Harris rider are much greater this year than the chances of Congress descheduling cannabis,” said Fox via email. “Given that Mayor Bowser has publicly stated that DC regulators are already preparing for the passage of either regulatory bill before the Council, I'd say the probability of DC regulating cannabis before the federal government starts that process is fairly high.”

What about statehood?

Some believe that D.C. might need to first achieve statehood to shirk the restrictions imposed by Congress. H.R. 51, a resolution to turn the residential and commercial parts of the District into the country’s 51st state, passed in the House last month.

But with a razor-thin Democratic margin in the Senate and moderate Sen. Joe Manchin (D-WV) publicly announcing his opposition to the proposal, D.C. doesn’t currently have a realistic path to statehood.

“I’m pretty pessimistic about statehood at this point,” said Eidinger. “The real assessment of it is that people like Joe Manchin are standing in the way of it.” Fox also agreed that D.C. was likely to pass a bill regulating cannabis sales before the government granting statehood to the District.

That means it’s likely to come down to legislators, activists and constituents in D.C. to create the kind of equitable cannabis industry that the District of Columbia—with its rich history of Black and brown prosperity—deserves.

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