The District of Columbia Alcoholic Beverage and Cannabis Board ordered a 30-day suspension of KLM, LLC, trading as Doobie District, after finding the U Street retailer dispensed medical cannabis to unqualified individuals and falsified required tracking records in the state’s seed-to-sale system.
In Order No. 2026-211, issued February 11, 2026, the Board concluded that Doobie District violated D.C. medical cannabis regulations by selling product to individuals without verifying patient or caregiver status and by entering false information into the METRC compliance system.
The case stems from an investigation launched May 9, 2025, after the Alcoholic Beverage and Cannabis Administration (ABCA) received information that Doobie District was selling medical cannabis to customers without medical cards.
According to the Board’s findings, an undercover ABCA investigator conducted two separate controlled purchases at the dispensary, located at 1526 U Street, NW. On both occasions, staff allegedly failed to request identification or proof of medical cannabis registration before completing the sale.
The cannabis sold during the operations was confirmed to be medical product sourced from a licensed cultivator. However, the printed labels on the packages contained the name and patient identification number of a Doobie District employee — not the undercover buyer.
An ABCA Medical Cannabis Program Analyst later determined that the employee’s METRC account showed purchase volumes exceeding the District’s 8-ounce, 30-day patient limit. Additional investigation found that two other patient accounts were also being “oversold” using the same employee login credentials.
The Board sustained two charges:
- Dispensing medical cannabis to a non-qualified patient or caregiver, in violation of 22-C DCMR § 5709.5.
- Entering false information into METRC, in violation of 22-C DCMR § 5615.3, which requires that all entries in the tracking system be truthful and reflect real-time events.
While the original notice cited § 5709.4, the Board clarified that the correct section was § 5709.5 due to a renumbering error in earlier emergency rulemaking. The Respondent stipulated to the underlying facts and contested only the appropriate penalty.
At the show cause hearing, principal owner Peter Murillo testified that the company conducted an internal investigation once notified of the ABCA probe. Employees found to be manipulating METRC and failing to follow proper verification protocols were terminated, and remaining staff were retrained.
Murillo also accepted responsibility for the violations and implemented new oversight measures, including personally tracking weekly sales and patient purchase volumes to prevent overselling.
Despite those remedial efforts, the Board emphasized that licensees are ultimately responsible for the supervision of their businesses.
“The Board considered revocation,” the order states, but declined to impose that penalty in light of arguments that staff misconduct may have occurred without ownership’s direct knowledge. Nevertheless, the Board concluded that negligent supervision warranted “serious consequences.”
Under the order, Doobie District’s medical cannabis retailer license will be suspended for 30 days. In addition, ownership must complete ABCA-approved medical cannabis training within 60 days of the order’s issuance.
Failure to provide proof of training may result in reimposition of the suspension until compliance is demonstrated. The Outlaw Report did not receive a response for comment from Doobie District by time of publishing.
