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Cannabis in the Nation's Capital: The Current Landscape in D.C. and the Road Ahead

Posted: April 26, 2022

Adult use of cannabis is currently authorized in Washington D.C. (D.C. or the District),1 but due to a congressional rider preventing the District from using any funds to enact and regulate a legal market, an unregulated marketplace has thrived, operating under the premise that retailers cannot sell, but can “gift” cannabis to consumers.  The success of the largely unregulated D.C. adult-use market has given political capital to these “gifting” retailers, thwarting the D.C. Council’s most recent efforts at reform.

The history of D.C.’s adult-use cannabis legislation somewhat parallels the history of D.C.’s medical cannabis legislation.  D.C. voters approved a medical marijuana program in November 1998, but the District was prevented from launching commercial medical cannabis sales due to an amendment made to the Omnibus Consolidated and Emergency Supplemental Appropriations Act of 1999 by then-Congressman Bob Barr (R-GA), preventing the District from using any congressionally-appropriated funds to create and regulate a medical marijuana marketplace.  It was not until 2009, during the 110th Congress, that Congress overturned the Barr amendment, clearing the way for D.C. to launch its medical marijuana program.  The first medical cannabis sale in D.C. sale occurred four years later, in July of 2013.

The next year, in 2014, D.C. residents approved adult-use cannabis, but Congress, just as it did in the medical cannabis context, intervened.  This time, Congressman Andy Harris (R-MD) introduced a successful budgetary rider, preventing D.C. from using any congressionally-appropriated funds to create and regulate an adult-use marijuana program (the Harris Rider).  Unlike in the medical cannabis context, however, Democratic control of the House and Senate did not result in the Harris Rider being overturned.  Despite the House’s efforts to remove it, the Consolidated Appropriations Act of 2022 was passed by the Senate earlier this year with the Harris amendment intact.  The next chance to remove the Harris Rider will be in September 2022, when the current Consolidated Appropriations Act will expire.  Republicans have taken a stance against the removal of legacy policy riders, including the Harris Rider, which, along with the 60 votes needed to prevent a filibuster in the Senate, means that significant partisan defections would need to occur for the Harris Rider to be removed during this Congress, which is particularly unlikely considering the midterm elections in November.

Because of the Harris Rider, along with the language of Initiative 71, which legalized the possession and use of marijuana in the District, provided it is not “sold or offered or made available for sale,” an unregulated marketplace of “gifting” establishments has proliferated in the Nation’s Capital.  These operations sell items or services (e.g., a t-shirt) and include marijuana as a free gift.  There are well over three dozen “gifting” businesses in the District, a source of frustration for legislators, law enforcement, and D.C.’s regulated medical cannabis establishments.  Because the “gifting” establishments are transferring products that are largely unregulated, they face no restrictions regarding where they can be located (e.g., that they must be a certain distance from schools or playgrounds) and they are not subject to marijuana-specific taxation.  The relative ease of operations of these establishments, along with the non-existent barriers for consumer entry (as there are with medical marijuana establishments, e.g., becoming a registered patient), have allowed these gifting establishments to reach a level of success that has enabled them to organize political coalition.

Following Congress’s decision to maintain the Harris Rider, D.C. Council Chairman Phil Mendelson, frustrated by the gifting market and its accompanying risks related to crime and public safety, brought the Medical Marijuana Emergency Act of 2022 (MMEA) up for a vote as emergency legislation, the goal of which was to allow the city to close marijuana gifting establishments while creating a system where prospective cannabis purchasers could self-certify as medical cannabis patients, enabling them to purchase product from any of D.C.’s regulated marijuana dispensaries.  As a piece of emergency legislation, the MMEA required a supermajority 9-4 in order to pass, which it failed to achieve by one vote, receiving a vote of 8-5.  One of the primary reasons cited for the proposal’s failure was the fallout the MMEA was expected to have on the District’s “gifting” establishments, with critics arguing that the proposal should have allowed for additional medical marijuana establishment licenses and/or a pathway for the gifting establishments to obtain a legal status.

What’s next for cannabis in D.C. is uncertain, although certain scenarios are emerging as more likely than others.  One of these more likely scenarios is that commercial adult-use sales in D.C. remain at a standstill until the Harris Rider is overturned.  A timeline for when this might occur involves too many political factors for any reliable prediction.  If the Democrats maintain control of both chambers of Congress in the next election, which seems unlikely based on current predictions, there would be cause for optimism, although, as demonstrated earlier this year, Democratic control is no guarantee of the Harris Rider falling.  If the Republicans take control of one or both chambers, which is quite possible, then the outlook may be more bleak, although there may be some hope as an increasing amount of Republicans are emerging as supporters of cannabis-related policies.

It may also be the case that the D.C. Council resurrects that MMEA as a piece of non-emergency legislation.  The previous vote of 8-5 suggests a high likelihood of passage.  But as the “gifting” coalition continues to organize, it is yet to be seen whether they can lobby for a more favorable version of the MMEA, which could include additional medical dispensary licenses and a pathway for these establishments to expand into the regulated adult-use market.  The interests of the “gifting” establishments will, however, need to be balanced against the interests of the existing medical marijuana industry in D.C., which may not take kindly to the possibility of increased competition from previously unregulated operators.  Therefore, should the MMEA be resurrected, it may be filled with compromises that make it a significantly different bill.

One mystery is where the “gifting” establishments are obtaining their products.  Such sourcing likely runs afoul of state and/or federal law (e.g., there have been rumors – none verified – that product is imported from legal states such as California, which would be a clear violation of federal law).  The reason this is important to consider is that if the “gifting” establishments are brought into the medical market, and their existing sources are not legal, then existing regulated cultivation and/or processing operations in the District may have an opportunity to expand production.

The future of cannabis in D.C. is uncertain.  While an adult-use market appears inevitable, the timeline related to the same is not easily predicted.  What is more likely in the short-term is a liberalized medical marijuana market.  Beyond that, the fate of the District’s adult-use market seems to be in Congress’s hands.

[1]  Currently, only medical marijuana is authorized for commercial sale in Washington, D.C., whereas adult use (but not sales) is authorized.