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D.C. Council Creates Tax Holiday For Medical Weed Businesses To Counter ‘Threat’ Of Gray Market Competition

The D.C. Council on Wednesday unanimously approved an emergency bill that establishes a tax holiday week for medical weed businesses around April 20, and allows seniors to sign up for a cannabis card without a doctor’s note.

Council Chairman Phil Mendelson, who introduced the temporary measure, said it was necessary in light of an ongoing drop in patient registrations for D.C.’s medical cannabis program, and to address unfair competition from unlicensed weed shops – commonly known as the “gray” market. In November, the council had already eased restrictions on medical weed operators after facing pressure from stakeholders who claimed the industry was at risk of collapse.

“As the medical market continues to feel the effects of this decline and faces the continuing threat posed by illicit cannabis storefronts and delivery services, it is necessary to extend some provisions of the law and provide additional incentives for qualifying patients,” Mendelson told council colleagues before they voted on Wednesday.

The bill lifts D.C.’s 6% sales tax on medical cannabis for 10 days starting on April 15 – a nod to the popular celebration of weed culture that takes place on April 20. Additionally, people aged 65 and up will no longer need a doctor’s prescription to sign up for a medical cannabis card. Instead, seniors will only need to certify that they use weed for a medical reason by signing a form provided by the D.C. Alcohol Beverage Regulation Administration (ABRA), which runs the District’s medical weed program.

Other provisions in the bill include doubling the amount of dried weed or “flower” that patients can possess from 4 to 8 ounces, and allowing people to sign up for the medical program with just one proof of D.C. residency. As an emergency bill, the provisions are temporary, and are set to expire on Sep. 30, 2022.

Adam Eidinger, an advocate who spearheaded the 2014 ballot campaign to legalize cannabis in D.C., applauded the Council’s move to relax registration requirements for seniors, though he said the new rules should be extended to all residents, regardless of age. Mendelson may actually be planning legislation to that effect, per a report by Axios.

D.C. legalized medical cannabis sales in 2011, but Congress has since blocked local officials from launching a regulated market for recreational weed. As a result, dozens of unlicensed dispensaries have popped up across the District, relying on a disputed legal loophole to “gift” weed with the purchase of other legal goods, like potted plants, t-shirts, or art. Overall, D.C. officials have turned a blind eye to the activities of weed “gifting” shops, though police sometimes raid storefronts and confiscate their merchandise.

As D.C. inches closer to getting a green light from Congress to allow retail weed sales, Mendelson has taken a more aggressive stance towards gray market businesses. In November, the chairman was forced to reverse course on a proposal to crack down on gray market weed businesses when some residents complained the measure would unfairly hurt Black business owners and employees.

“The way things are going right now, the black market could run the legitimate businesses out of business, and then they won’t be there to step into the recreational field,” he told Axios on Wednesday.

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