The District of Columbia legalized adult-use marijuana by ballot initiative in November 2014. Ballot Initiative 71, which 70% of District voters supported, was intended to set the stage for the sort of revenue generating adult-use market enjoyed by states like Colorado and Washington. The District’s arcane legislative process, coupled with Congressional meddling in District affairs, ultimately prevented the City Council from establishing a taxable adult-use market. The version of Initiative 71 that was eventually enacted by the City Council and approved by Congress amended criminal law to permit individuals age 21 years and older to possess, purchase, use and transport up to two ounces of marijuana; and to transfer up to one ounce of marijuana to another adult without accepting payment. The law also allows an adult to cultivate up to six plants in his/her principal place of residence, with a maximum of three mature plants at one time. Translation – adults can grow, possess, gift and consume home grown green; but cannot push any form of retail marijuana in the District.
The District’s indecisive legal position with respect to adult-use marijuana has created a touch of gray in the Capitol’s tight-knit cannabis community. District residents are unclear about what cannabis activities are actually permitted under the current law, and this confusion has created a state of chaos and creativity. The legal contours created by the law’s vague language have carved out a gray area which entrepreneurs are using in creative ways to gain a competitive advantage by “gifting” small amounts of marijuana with the purchase of a legal retail product. This “gifting” carve-out in the law is turning the District into a Silicon Valley-style incubator for small businesses that want to attract the “social smoker” consumer. As more small businesses embrace this non-traditional marketing strategy, the District is positioning itself (should new laws be enacted) to become the most comprehensive adult-use cannabis market on the East Coast.
In early January 2017, three members of the City Council introduced a bill that could radically change the adult-use cannabis market in the District. The bill, titled the “Marijuana Legalization and Regulation Act of 2017”, would establish a licensing, taxation and regulatory infrastructure for the production, sale, use and testing of retail marijuana and retail marijuana-infused products. If passed, the bill would create five classes of retail-marijuana licenses that would permit entrepreneurs to open adult-use marijuana dispensaries, grow centers, edible kitchens, testing and extraction labs and even Amsterdam-style cafes. More importantly, the bill would bring peace of mind and clarity to District residents about the legal status of adult-use marijuana.
At this point, any predictions about whether the 2017 bill will make it through the freak-show that is the legislative process in the District would be premature; but at the very least it shows that the District wants to establish an adult-use market that looks a hell of lot like the Mile High City’s billion dollar market. District entrepreneurs should not sprint to the adult-use market, any real clarity on the legal status of marijuana is definitely not around the corner. The bill must first be scrutinized at the local level before it is sent to Congress for approval, and one should be cautious to hazard a guess about how Congress will treat the bill. Even if it is a marathon getting this bill enacted, it is clear the adult-use movement in the District has strong support in City Council and among its residents.
