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Washington DC grey market could be going away

by Travis C | Nov 1, 2021 | 420 News, Blog, Business, Cannabis Business, Cannabis Law, Cannabis Law and Compliance, Cannabis News, Culture, Legalization, Politics

Update 11/2/21: The provision to crack down on the grey market in DC was removed prior to voting on the overall bill on November 2, 2021.

Despite legalizing cannabis in 2014, Washington DC has yet to see a single legal sale of recreational cannabis. But that doesn’t mean the cannabis industry in DC isn’t thriving.

However that could all be changing after the DC Council will vote on a new measure on November 2, 2021.

During the peak of the COVID-19 pandemic in 2020, many Washington DC medical cannabis patients had their medical cards expire due to lack of government services. Patients must register through the Alcoholic Beverage Regulation Administration (ABRA) because there is no cannabis specific regulatory agency.

Under the current law, those seeking medical marijuana have to first get approval from medical practitioners registered with the ABRA, some of whom charge up to $200 a visit. To try and resolve the issue, Council Chairman Phil Mendelson introduced an emergency bill that aims to allow qualifying patients and caregivers whose registration cards expired or will expire between March 1, 2020 to Jan. 31, 2022 to continue purchasing, possessing and administering cannabis until Jan. 31, 2022.

However the emergency bill includes other measures that would severely cripple if not crumble entirely the grey market cannabis industry that is currently thriving in Washington DC. The same bill that aims to help medical cannabis patients also would enable city agencies and law enforcement to impose fines, revoke licenses, and shut the doors of non-authorized businesses engaging in buying, selling, or otherwise “exchanging” marijuana to its customers.

The Washington DC Grey Market

To understand the potential impact of this bill, it is important to understand how the “cannabis industry” operates in Washington DC. Despite legalizing recreational cannabis possession, cultivation and use in 2014, there is a rider put into the original bill preventing any funds from being spent on the establishment of a legal cannabis industry.

Because of this rider, known as the Harris Rider, there is no regulatory agency or current architecture for a recreational cannabis industry in DC. This hasn’t stopped the people of DC from starting their own underground “legal” cannabis industry that has grown exponentially since its inception.

Known as a “grey market” because it operates in a loophole of the current law, the cannabis industry in Washington DC operates entirely different from any other legal cannabis industry in the country. Here’s how it works:

A customer enters a smoke shop, hydroponic store, or finds an online delivery service
The customer must “donate” a certain fee for a product (i.e. $45 donation for a T-shirt)
The customer then receives a “gift” in the form of cannabis products (i.e. cartridge, flower, edibles)

It is that simple, but can be easier said than done in an underground industry that is entirely unregulated. This can lead customers to pay higher prices for smaller quantities of cannabis, with no way to judge the quality for themselves prior to purchase, mainly in the case of delivery services.

If Mendelson’s bill passes however, the entire grey market could be shut down in a matter of months. But if the 2022 Budget Proposal passes in its current state, it may not be all bad news.

Removing the Harris Rider

Although President Joe Biden does not support broad cannabis legalization on the federal level and left the Harris Rider in his 2022 Budget Proposal, legislators had a different idea. After the House of Representatives removed the Harris Rider in June 2021 passing it on to the Senate Appropriations Committee, Committee Chairman Patrick Leahy passed the bill through with more additions, but notably kept the Harris Rider out.

The slightly modified legislation also contains several other cannabis provisions, including a request to continue an existing protection for state medical marijuana laws, a call on the federal government to reconsider policies that fire employees for cannabis, criticism of the restrictive drug classification system that impedes scientific research and encouragement to develop technologies to detect THC-impaired driving.

If the 2022 Budget Proposal passes in its current state, the recreational cannabis industry would no longer be prohibited in Washington DC. In other words, the grey market would no longer be necessary. But in the case of Washington DC having a functional legal cannabis industry in 2022, that’s a big “IF”.

House Committee Approves Marijuana Protections For Banking

by The Real Dirt | Jun 25, 2021 | 420 News, Blog, Cannabis Law, Cannabis Law and Compliance, Cannabis News, Industry News

A house appropriations committee has approved a cannabis banking amendment

A House subcommittee on Thursday approved a large-scale funding bill that includes provisions protecting banks from being punished for working with marijuana businesses and allowing Washington, D.C. to legalize cannabis sales.

The move by congressional Democrats to let the District of Columbia set its own marijuana policies is in contrast with a budget released last month by President Joe Biden, which proposed continuing the longstanding Republican-led rider that has prevented the city from spending its own money to regulate adult-use cannabis commerce.

The banking-related provision is less far-reaching than more robust standalone bills the House has passed on four occasions, but would still provide some protections to banks that work with state-legal marijuana operators.

Both measures are attached to a bill to fund various federal agencies for Fiscal Year 2022 that was approved by the House Appropriations Financial Services and General Government (FSGG) Subcommittee in a voice vote. The full House Appropriations Committee is scheduled to take up the legislation on Tuesday.

In a press release, the panel called the rider blocking local D.C. marijuana policymaking an “objectionable” measure that “undermine[s] home rule.”

Rep. Eleanor Holmes Norton (D-DC) said in a press release that she’s “very pleased the bill respects D.C.’s right to self-government by allowing D.C. to spend its local funds as it sees fit, including on…recreational marijuana commercialization.”

“With Democrats controlling the White House, House and Senate,” she said, “we have the best opportunity in over a decade to enact a spending bill with no anti-home-rule riders, as this D.C. appropriations bill does and as I requested.”

After the Biden budget was released, Norton told Marijuana Moment that she was “very disappointed” over the decision, especially considering that fact that he’s voiced support for D.C. statehood.

The exclusion of the D.C. provision from the Fiscal Year 2022 FSGG appropriations bill could set the stage for conflict between lawmakers and the president. The Biden administration has already disappointed advocates by declining to take meaningful action on cannabis reform as promised on the campaign trail, and his inclusion of the D.C. rider was seen as an outright hostile act.

The District’s mayor said in April that local officials are prepared to move forward with implementing a legal system of recreational cannabis sales in the nation’s capital just as soon as they can get over the final “hurdle” of congressional interference.

The ongoing blockade is the result of an amendment that was first added by Rep. Andy Harris (R-MD) when Republicans controlled the House and has since been continued in annual appropriations legislation. The House on several occasions has since passed spending bills that do not include the cannabis ban, but it has been included in final enacted legislation because the Senate under GOP control insisted on reinserting it.

Read Full Story on Marijuana Moment

Biden’s proposed budget keeps a block on recreational weed sales in Washington, DC

by The Real Dirt | Jun 4, 2021 | 420 News, Blog, Business, Cannabis Law, Cannabis Law and Compliance, Cannabis News, Industry News, Legalization, Politics

A rider that has effectively blocked recreational cannabis for years in Washington, DC appears in President Joe Biden’s proposed 2022 budget, which may keep weed on the back burner yet again.

Even though residents of DC voted to legalize possession of recreational marijuana in 2014, the measure has been in limbo since then, derailed by a rider to DC’s appropriations bill first introduced by Rep. Andy Harris (R-MD), that prohibits the District from spending its local funds on commercialization of recreational cannabis, such as dispensaries. And Biden’s proposed 2022 budget includes the rider’s language yet again.

Del. Eleanor Holmes Norton (D-DC) said in a statement she was having a hard time reconciling the Biden administration’s support for DC statehood with its budget that would prevent DC from commercializing recreational cannabis. “With Democrats controlling the White House, House and Senate, we have the best opportunity in over a decade to enact a D.C. appropriations bill that does not contain any anti-home-rule riders,” Norton said.

Asked if the president plans to remove the language from the proposed budget, a Biden administration official said in an email to The Verge that the president “continues to strongly support DC statehood, under which the people of DC could make policy choices just like other states.”

DC has long had a so-called “gray market” for marijuana, with medical cannabis legal, and recreational cannabis technically legal, but unable to be taxed or regulated because of the Harris rider. DC voters first approved medical marijuana in 1998, but it too was initially blocked, by the Barr Amendment, legislation that Congress finally overturned in 2009.

Biden, once a leading voice in the “War on Drugs” of the 1980s and ’90s, said during the 2020 presidential campaign that it was “time to decriminalize” marijuana use, but so far during his administration there’s been little action to do so at the federal level. Dozens of US states have legalized medical marijuana, recreational marijuana, or both, and public opinion supporting legal weed is at an all-time high. And Senate Majority Leader Chuck Schumer (D-NY), and Sens. Cory Booker (D-NJ) and Ron Wyden (D-OR), have said they would work together to advance comprehensive cannabis reform.

In February, DC Mayor Muriel Bowser proposed legislation “to create an equitable adult-use cannabis program” in DC, which would impose a 17 percent tax on cannabis sales. But it’s unlikely to take effect if the rider remains in Biden’s proposed 2022 budget.