The first medical dispensaries transitioning from unlicensed operators to the legal market were given licenses to open on Mar. 27, 2024.
The three stores (Green Theory, Wishing Wellness, Don Fuego) are the first to complete the transition process from I-71 gifting stores to legal medical dispensaries. One current medical license also received a license to open a new retail store in Chinatown.
D.C.’s efforts to establish an adult-use market have been stymied for almost a decade by the Harris Rider in the federal spending bill which prevents the District from using tax dollars to set up a legal market.
I-71 gifting stores proliferated across D.C. since the I-71 amendment went into effect in 2015. I-71 allowed the gifting of small amounts of cannabis between people without exchange of money. However, businesses used it as a loophole to sell weed by charging high prices for inexpensive items and gifting THC-products alongside.
Stores exploded around D.C. into the hundreds, sometimes dotting street corners right next to each other. The Medical Cannabis Amendment Act of 2022 established a process to fold these gray market stores into a legal market expansion. The stores had 90 days to apply for a legal license, but just over 70 stores submitted applications to ABCA this winter.
Though early gifting businesses faced regular raids and enforcement by police and federal authorities, little prosecution occurred in the last few years. A safe harbor law even protected shops from enforcement for a year until the end of January 2024.
Of the 75 businesses that applied, 30% have received placards – the first step to getting a legal license. After a placard, businesses must face protests from their local neighborhood association and enter into settlement agreements.
Individuals are not allowed to protest these businesses, only local ANCs. The ANC can only protest a business based on concerns about peace and quiet, parking needs and pedestrian safety or property values. This has caused controversy for Green Theory as parents are now up in arms about its proximity to schools.
28% of unlicensed applicants are still being processed by ABCA and over 25% have been denied. There are seven applicants that have settled with their ANC’s and are likely to receive official licenses in the next few weeks.
A total of 35 legal medical dispensaries could be coming online in the next three months despite not a single new cultivation center opening, raising concerns about supply in an already downward sloping medical market. Five currently open medical dispensaries sold under 400 lbs of cannabis flower in February.
Issues with zoning, real estate and funding have blocked many conditional cultivation and manufacturers from moving forward with their applications in the District.
A self-certify medical patient system in D.C. hopes to transition many of the current I-71 clientele to registered medical patients, but doubts swirl if people will legally register to shop at the new stores, especially with a legal adult-use market next door in Maryland.
Two additional retail licensing application periods, including a current social equity period, will offer an opportunity for additional businesses to receive conditional or standard licenses to open medical dispensaries and delivery services this year.