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D.C. Council Vote to Shut Down Cannabis Gifting Services Falls Short

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D.C. Council Vote to Shut Down Cannabis Gifting Services Falls Short

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D.C. Council Vote to Shut Down Cannabis Gifting Services Falls Short

A bill targeting shops “gifting” cannabis to consumers failed to receive enough votes in the Washington, D.C. Council this week.

If approved, severe penalties would have been applied to shops offering cannabis as gifts and likely would have forced them to shut down. Because directly exchanging money for non-medical cannabis is illegal, many shops have developed a workaround. Customers can purchase a range of products like lemonade, postcards, artist prints, and even legal services that come with a complimentary cannabis gift. 

The D.C. Council voted 8-5 in favor of the crackdown, but nine votes were needed since the bill is considered emergency legislation.

D.C. Council Chairman Phil Mendelson introduced the bill and says he intended to protect licensed medicinal cannabis dispensaries in D.C. His legislation would have levied $30,000 fines for shops caught gifting cannabis to customers. The bill would have also allowed adults over 21 to purchase medicinal cannabis without a doctor’s recommendation. Patients would simply state their medical need for cannabis and be allowed to purchase from legal dispensaries.

“To continue to simply turn a blind eye to the illegal market, the $500 million market that is slowly but surely sinking the legal market, there’s really not justification for sanctioning illegal businesses,” Mendelson said according to NBC Washington.

Some licensed medicinal cannabis dispensary operators say the gifting shops have significantly impacted their bottom line.

“We lost over 60 percent of our patient base for the legal dispensaries,” Linda Mercado Greene, owner of Anacostia Organics, a minority woman-owned dispensary, told NBC Washington.

The bill’s failure to reach nine votes does not necessarily mean that cannabis gifting shops will be able to operate indefinitely. Several D.C. Council members seemed hesitant to approve emergency legislation that would have immediately upended the local cannabis landscape for businesses and consumers.

“At the end of the day, I just can’t get behind making what are drastic policy changes on an emergency basis,” Councilmember Elissa Silverman said. “This dramatically alters how cannabis will be bought and sold in the District of Columbia.”

Advocates of the gifting shops argue that many jobs, including those held by Black and Hispanic workers, would be lost. Despite being most impacted by the War on Drugs, Black and Hispanic communities are often unable to reap the benefits of the legalized cannabis industry.

The gifting shops seem to have flourished because D.C.’s recreational cannabis regulations have remained in legal purgatory for years. Initiative 71, which legalized adult-use cannabis in D.C. was approved by voters in 2014. However, the ballot initiative did not have the authority to set up a regulatory and sales apparatus. One of the largest obstacles toward achieving this has been Congress’ ability to prevent sanctioned sales from taking place through the Harris Rider. The rider, named after Maryland GOP Rep. Andy Harris, is a part of the omnibus spending bill and prevents D.C. from establishing a regulated cannabis market.

The legal limbo has led to the opening of shops like District Derp, an art gallery where patrons can buy paintings made by a dog. Customers are also gifted cannabis with their purchases. The price of the paintings corresponds with typical market prices for cannabis. For instance, a $55 painting comes with 3.5 grams of cannabis while a $330 painting yields an ounce of cannabis.

District Derp’s co-founder and CEO, Christopher Licata, believes that a move to shut down gifting shops and transition all sales to sanctioned medicinal dispensaries would cause spikes in cannabis prices and a potential supply crunch.

“I don’t see how the supply meets the demand in light of this,” Licata told The Washingtonian before the council’s vote. “When this legislation becomes effective, we’ll have to close the doors of District Derp.”

For many, the cannabis legal situation in D.C. serves as an example of why the city needs the power to self-govern. 

“One of the unique nuances here is the need for statehood,” Akosua Ali, D.C.’s NAACP branch president, told WTOP after Tuesday’s vote.

“When we talk about the district becoming a 51st state, it’s not simply about having voter representation in Congress,” Ali continued. “That is one part of it. However, the real essence of it is district voters, really ensuring that our vote … and the legislation that is put on the books is honored as the will of the people.”

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