The District of Columbia’s Alcoholic Beverage and Cannabis Board (ABCB) issued a Notice of Proposed Rulemaking that would change how first-year licensing fees are calculated for medical cannabis businesses, allowing newly licensed facilities to pay a prorated fee rather than the full annual amount when a license is issued late in the fee cycle.
The proposed rule would amend Subtitle C (Medical Marijuana) of Title 22 of the District of Columbia Municipal Regulations to require that the initial annual license fee for a medical cannabis facility be prorated based on the number of days remaining in the license year. Currently, all licensees within the same license class share the same expiration date and licenses are valid for three years, but businesses must pay annual licensing fees each year. Under existing rules, the first-year fee is the full annual amount regardless of when the license is issued.
This structure can require businesses to pay a full year’s fee for only a short licensing period. For example, a medical cannabis retailer license carries a $16,000 annual fee, and all retailer licenses currently expire on December 31, 2026. A retailer issued a license on October 1, 2025 would still be required to pay the full $16,000 for the period from October through December 2025, followed by another $16,000 payment for the full 2026 year.
Under the proposed rule, the initial fee would instead be prorated according to the remaining portion of the year. In that same example, a retailer licensed on October 1 would pay roughly 25 percent of the annual fee—about $4,000—for the remaining three months of the year. The prorated fee would be rounded to the nearest dollar.
The rulemaking also addresses businesses that previously paid full annual fees for partial-year licenses. If a medical cannabis facility received a license covering less than 12 months and paid the entire annual fee under the current rules, the licensee’s next annual fee would be reduced to reflect the prorated amount that would have applied under the new rule.
According to the Board, the change is intended to address equity concerns and align cannabis licensing practices with the District’s alcoholic beverage licensing system, which already prorates fees for new licenses.
The Board first adopted a notice of proposed rulemaking on April 30, 2025 by a 4–0 vote. An updated version of the rulemaking was approved on March 4, 2026, also by a 4–0 vote, with edits made for clarity. After publication in the D.C. Register, the proposal will undergo a 30-day public comment period and a 30-day D.C. Council review period. If the Council does not approve or disapprove the rule within that period, it will be deemed approved and may take effect. Written comments may be submitted within 30 days of publication to the Alcoholic Beverage and Cannabis Administration.
