DC Council Moves To Crack Down On Cannabis Gray Market Gifting

DC Council Moves To Crack Down On Cannabis Gray Market Gifting
DC Council Moves To Crack Down On Cannabis Gray Market Gifting

Only 37 of the potentially more than 1,000 companies have sought licensure.

The Washington, D.C., City Council changed course from broadening the city’s medical marijuana program last year to now cracking down on gray market operators that have made no attempt to transition into taxpaying companies.

According to DCist, the council this week approved a new ordinance granting more enforcement powers to the Alcohol Beverage and Cannabis Administration to hand out warning letters, fines, and cease-and-desist orders to gray market marijuana businesses.

The move comes after the council in 2022 passed a broad expansion of the capital city’s medical marijuana program, essentially repealing caps on the number of dispensaries, growers, and other business types.

That move was designed to provide an on-ramp for gray market companies that sprung up in the wake of the 2014 ballot measure that legalized recreational marijuana use and possession in the district, because Congress has repeatedly blocked the council from passing a regulatory framework for the adult-use cannabis industry. Instead, the council tried to make it as easy as possible for gray market “gifting” companies to join the legal industry.

But thus far, only 37 of the gray market operators have applied for formal medical marijuana business status, DCist reported.

Past estimates have put the number of “gifting” companies – described thusly because it’s legal for adults to “gift” cannabis to each other – in the hundreds, perhaps over 1,000. “Dozens” could be subject to enforcement actions, one D.C. City Council member estimated.

The new bill allows the ABCA to also pursue landlords within Washington, D.C., who allow unlicensed marijuana businesses to operate on their premises, and the new enforcement push is ready to launch, and the bill will go into effect as soon as the mayor puts her signature on it.

John Schroyer

John Schroyer has been a reporter since 2006, initially with a focus on politics, and covered the 2012 Colorado campaign to legalize marijuana. He has written about the cannabis industry specifically since 2014, after being on hand for the first-ever legal cannabis sales on New Year’s Day that year in Denver. John has covered subsequent marijuana market launches in California and Illinois, has written about every aspect of the marijuana trade, and was part of the team that built the cannabis industry’s first-ever trade show, MJBizCon. He joined Green Market Report in 2022.

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