February saw the most unlicensed cannabis shop closures in a month in the District of Columbia since padlocking of shops began in the fall of 2024.
The Alcoholic Beverage and Cannabis Administration, D.C.’s regulatory agency, reported that the joint task force closed ten unlicensed cannabis stores in February. It took the agency three months to padlock the previous ten stores.
This uptick in closures comes as the licensed market testified to the D.C. council that the slow rate of enforcement against unlicensed cannabis shops was driving their businesses to the ground.
Enforcement against unlicensed cannabis shops or I-71 “gifting” shops was complicated by a safe harbor period that D.C. built into its most recent effort to expand D.C.’s medical cannabis market. The 2022 medical cannabis expansion was the city’s best effort to create a medical market close to an adult-use market since the federal Harris Rider blocks the city from setting up recreational cannabis sales.
However, the safe harbor period that was created to encourage I-71 shops to convert to a legal medical business encouraged the gifting market to flourish to new heights without risk of closures or law enforcement interference. Under 100 shops out of over 200 estimated gifting dispensaries applied to transition, and less than half of those are set to become actual medically licensed dispensaries by program deadlines.
All illegal or unlicensed cannabis shops were at risk of ABCA enforcement starting in 2024 according to the law, but enforcement stuttered with a few closures in the Spring before getting wrapped up in a lengthy agency process that delayed actual padlocking closure of shops for months.
ABCA developed and created legislation that made the padlocking process cumbersome. The process was supposed to protect the city from illegal dispensaries having a legal footing to repeal their closures and ensure due process to owners, but it ended up bogging down the process so much that by the end of 2024 less than 20 shops had been padlocked, according to ABCA press releases.
So ABCA again proposed legislation in November 2024 that the D.C. council passed which streamlined the padlocking process, according to Fred Moosally, the agency’s director. Moosally said that the new laws allowed ABCA to padlock stores without first sending warning letters.
Another group of illegal shops were given until the end of March 2025 to officially open as legal dispensaries. This group was originally supposed to face closures in the fall of 2024, but ABCA again pushed back their deadline and focused only on padlocking stores that didn’t apply during the unlicensed operator application period.
Unlicensed operator applicants now face a hard deadline, according to the agency, of Mar. 31, 2025.
There is another group of shops that could still be “gifting” unlicensed cannabis products: shops that applied after the unlicensed operator period during both the social equity and standard dispensary license application.
It is unclear if they will face the same hard March deadline that those who applied as unlicensed operators will. A handful of other shops that applied outside of the unlicensed applicant period have faced enforcement, but not many.
A few weeks after Moosally testified to a council subcommittee about the enforcement in D.C., the attorney general put out a press release touting the padlocked stores that remain closed.
“For too long, unlicensed cannabis stores have been illegally selling unregulated, untested products that put District residents’ safety at risk,” Attorney General Brian L. Schwalb, said in the press release.
“All so-called ‘gifting shops’ were given ample time to apply for legal medical marijuana licenses, but many failed or refused to do so. OAG, ABCA, and MPD have partnered to shut down these illegal retailers demonstrating our collective commitment to ensuring that every store selling cannabis products in the District complies with the law and plays by the rules.”
The press release generated coverage from local media outlets and the Washington Post. According to the AG press release, an owner of an unlicensed establishment broke back into their store twice after it was padlocked.
The press release also focused on the closure of a store where another owner was arrested and the task force found 35 pounds of cannabis flower, 22 lbs of THC edibles, six pounds of psilocybin mushrooms and edibles, two pounds of cocaine, two pounds of methamphetamine, $6,817 in cash, a semi-automatic handgun and ten dogs.
Most of the unlicensed closed stores were found with only cannabis and sometimes psilocybin not meth and cocaine.
The AG listed 25 padlock closures, but five of those were allowed to reopen as non-cannabis stores – even Nomad Smoke Shop where the meth and cocaine was found. It also included District Smoke Shop which was operating as a legal medical business while another level of the building sold unlicensed products. The AG press release said the store was able to reopen without the gifting level.
The AG’s list also includes places like Peace in the Air which the Outlaw reported closed voluntarily weeks before the city’s taskforce raided an empty store.
The published AG list also contradicts ABCA’s own enforcement tracker and press releases which list 56 closed businesses and 31 stores padlocked.
Without further investigation it is unclear how many of the padlocked businesses remain closed or simply moved online to delivery services.
Padlocked shops such as Safe House are also not listed on the AG’s press release despite ABCA announcing their padlocking last fall. Safe House was one of the first to get padlocked and has been a lightning rod for neighborhood complaints about unlicensed cannabis businesses. However, they appealed their closure through the ABC Board.
The following is a list of February closures:
- Feb. 3: Happy Bud, Capital Cannabis DC
- Cannabis and psilocybin recovered
- One arrest
- Feb. 10: Creep Smoke Shop, Forest Floor
- Cannabis and psilocybin recovered
- One arrest
- Feb. 13: YouGroGurl
- Cannabis recovered
- Feb. 18: Kush Bar, Pride Smoke Shop, Shashamane
- Cannabis, psilocybin and guns recovered
- One arrest
- Feb. 24: Popular DC, Dabbers Club/District Glass Studio
- Cannabis and ammunition recovered
- Two arrests
