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End of social equity cannabis retail application period in D.C. brings supply questions

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The second to final application round for The District of Columbia’s medical cannabis expansion ended Tuesday. 

Over the last year, The Alcohol Beverage and Cannabis Administration held separate periods for applicants starting with cultivators and manufacturers almost a year ago. The three periods brought in hundreds of applicants that were awarded conditional licenses to spend a year launching and opening their businesses.

The periods were spaced out to allow cultivators and manufacturers to get up and running before new retail locations opened or transitioning unlicensed operators needed to shop within District boundaries. 

However, not a single manufacturer or cultivation application has moved from conditional status to placarded in the licensing process in the last eight months. 

Fred Moosally, ABCA’s director, said Tuesday that two large current medical cultivators are hoping to expand operations in May which would expand the legal cannabis supply by September. During his testimony for D.C. council’s budget oversight, Moosally acknowledged the supply issue.

“We have to increase supply because we have all of these unlicensed establishments that want to come on board and we need to make sure there is sufficient cannabis and cannabis products,” Moosally said. 

Over ten new medical retail locations are likely to open in the next three months and almost 30 are just a few months behind these businesses in the licensing process, according to The Outlaws analysis of public records.

Funding and real estate options are the biggest obstacles for conditional licensees. Moosally testified that a zoning change from D.C.’s zoning board is “pretty much at the precipice of the issue any day now.”

The zoning change would increase where manufacturers and cultivators can locate in the city by up to 26 zones, according to Moosally. These businesses are currently only allowed to locate in industrial zones. There are currently under 30 listings for industrial zoned commercial spaces on LoopNet, a property listing site. The few dozen listings pale in comparison to the hundreds of conditional licenses.

Six current medical retail locations sell about 400 lbs of cannabis a month. Five new locations will be open within the next month, potentially doubling the current demand of medical cannabis in the District. The current placarded cannabis retail establishments will increase the retail locations by 900% when they open, and more retail locations will be approved in the coming months. 

Moosally testified that over 150 applicants applied during the social equity internet retail and retail period. An ABCA spokesperson said that the agency is not releasing an official number of applicants until the ABC board reviews the applications. 

The board is still reviewing applications from last year’s periods so it is unclear when an official number will be released for the social equity retail period. The agency released total numbers of applicants for the cultivator and manufacturer periods. 

If the zoning change happens, it could increase the spaces manufacturers and cultivators could locate. But cart is still ahead of the horse with numerous retail businesses launching before new supply is generated. One final licensing period begins in July for standard retail applicants. 

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