Washington DC grey market could be going away

Washington DC grey market could be going away

Washington DC cannabis delivery

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:

  1. A customer enters a smoke shop, hydroponic store, or finds an online delivery service
  2. The customer must “donate” a certain fee for a product (i.e. $45 donation for a T-shirt)
  3. 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”.

Washington DC Marijuana Laws Could Be Changing

Washington DC Marijuana Laws Could Be Changing

If the current Washington DC marijuana laws confuse you, you aren’t alone.

If you went to Washington DC today in search of cannabis, you might struggle to find it. Despite Washington DC marijuana laws allowing the possession, cultivation and consumption of cannabis for recreational use, there isn’t a single retail recreational cannabis store where you can legally purchase cannabis.

Cannabis is still attainable in DC just like most places in the country without legal access to cannabis, but the methods can vary with different levels of success.

Washington DC Marijuana Laws

Washington DC legalized cannabis nearly seven years ago in February 2015. While the legislature legalized everything necessary to begin the process of opening up a retail cannabis industry, there was one major roadblock.

Rep. Andy Harris, a Republican, included a rider in the bill that including language preventing DC from implementing any sort of recreational cannabis industry, by not permitting district funds to be used for the process. In other words, Washington DC is unable to have a recreational cannabis industry because they are currently not allowed to fund a regulatory commission, establish licensing processes and design a regulated industry framework.

So while Washington DC marijuana laws resemble that of every other state that has legalized cannabis, there is still no legal industry. With all that said, finding weed in DC is relatively easy these days thanks to a thriving grey market.

The law in DC permits any one person to give any cannabis they have or have grown to any other person as long as they do not charge for it, as selling cannabis is currently illegal under the rider. This has led to the creation of a gift/donation system that has helped bloom a massive underground industry in DC.

This can work in various ways; from “donating” $40 for a T-shirt in a hydroponic store and being “gifted” a few grams of cannabis, to full-blown delivery services where you donate for a single sticker (that happens to cost about $200) in exchange for a gift box with cannabis flower, edibles and cartridges. Unfortunately for the consumer, this market is still completely unregulated since it is being done through a loophole in the bill’s language.

Consumers constantly run the risk of over paying for low quality cannabis from a shady shop or service, and there are so many different delivery services, finding one that doesn’t rip you off can be a real challenge. But that could be changing thanks to a new adjustment to the Senate budget proposal for 2022.

Washington DC could have legal cannabis for sale soon

Washington DC marijuana laws are particularly complicated due to the nature of Washington DC itself. It is considered the Capitol of the country, but it is not actually a state or a city, and its Mayor is also the Governor, among other peculiarities. Due to the nature of how DC works, it creates complications when the district has differing opinions on legislation compared to the federal government that is housed there.

When Joe Biden released his 2022 budget proposal it still included the Harris Rider, leaving many advocates disappointed. The Democrat president has expressed consistent opposition to cannabis legalization on the federal level. However the House voted to remove the rider back in June, and now the Senate Appropriations Committee seems to be moving that sentiment forward.

In a new text of legislation released by Committee Chairman Patrick Leahy, a budget proposal to fund the federal government for Fiscal Year 2022 is presented, which among other measures, purposely fails to include the Harris Rider.

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

It is very common for legislators to attempt and slide in additional changes to legislation in most cases, but also regarding cannabis. Some advocates blame this practice for why a lot of cannabis legislation does not pass, saying that if legislators focused on one issue at a time that has more broad support, they would see more success.

A long fight may be ending

It is too soon to say if the final Budget Proposal will be approved, and more changes could occur before it is. The fight to change Washington DC marijuana laws has been long and fraught with disappointment.

The latest proposal appears to be a large step in the right direction, with House and Senate support for removing the rider. The 2022 Budget Proposal has a deadline of December 3rd, with Democrats eager to get everything finalized before then. However it is still unclear whether the spending panel or full Senate will take up the new revised proposal before then.

Yet again, the further progress of cannabis legalization depends on the slow moving legislature, notorious for “extending” deadlines as an excuse for just missing them. Only time will tell the future of cannabis legalization in Washington DC now.

House Committee Approves Marijuana Protections For Banking

House Committee Approves Marijuana Protections For Banking

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.