The stars looked aligned for the opportunity Washington DC has waited for since legalizing cannabis under Initiative 71 passed. Democrats hold Congress (on paper, obviously less in practice), the Presidency, and the Harris rider that has prohibited the city from creating a retail tax and sale system for cannabis since 2015 was conspicuously absent from the current version of this year's federal spending bill. It looks like recreational marijuana sales are on the menu, boys! Or so we thought. The version of the federal budget that passed included the rider, so there won't be a regulated, adult-use cannabis market in the District until at least next year. That seems overly optimistic at this point- let's look at what went down.
3/10/21 Update: The Rider Remains
Sad, but not terribly unexpected news- Congress passed a federal budget on March 10th and the reviled Harris rider remains intact, which means there will be no retail tax and sale program for cannabis in the District for at least another year. There’s several ways it could still happen, but none of them are realistic. DC has historically been a bargaining chip during Congressional negotiations and no matter who wins, the Nation’s Capital loses. It’s happened with abortion facilities, it’s happened with needle exchange programs, and it’s happening with cannabis. To paraphrase Martin Astermuhle’s thorough explanation of the situation, there’s not enough juice to be worth the squeeze for Congressional Democrats on the matter, despite their slimmer than Benson & Hedges majority. Essentially, re-opening the file on the Harris rider would escalate to negotiations on a number of other contested budget riders and nobody, it would seem, has time for that.
Is it time to throw in the towel on a licensed, adult-use cannabis market for the District? Yes! Yes, it is. And the Gentleman, for one, welcomes our new insect overlords. Seriously, though, it has become abundantly clear that the rider isn’t going away anytime soon. A Democratic super majority in Congress and White House might do it, but the forecast says it’s raining Rs when the midterms come around in November. Legalization on the federal level would do it, and is long overdue, but who knows when that’ll happen. Any attempt to put it through Congress now is likely going to be stymied by the likes of Manchin & Sinema, so that Republicans can either do it themselves and take the credit- forcing Dems to compromise on social equity or vote against legal marijuana- or simply continue to delay the inevitable. There’s still a lot of people out there that just don’t like pot, y’all, and an awful lot of them hang out at the senior day-care facility the halls of our government have become.
I support the solution that DCMJ came up with, the one Adam Eidinger and Nikolas Schiller pitched to the DC Council back in November. There isn’t anything stopping the city from opening up the city’s medical cannabis program to additional licensees now. There isn’t anything preventing the city from reducing the license and application fees to make them accessible to social equity applicants. I had come upon the notion that maybe the city could simply decriminalize sales, but it’s been a while since I read the Harris rider and it unfortunately does prevent the reduction in penalties for selling cannabis. So offering I-71 businesses a transitional path to become licensed medical dispensaries seems to be the best path forward as it becomes increasingly apparent that the status quo has become untenable for the District’s leaders. While I think it’s unlikely that they decide to continue ignoring the existence of I-71 brands as they have for the last six years, that’s another socially equitable path they can choose. So what’s it going to be, DC? You want to go back to arresting people for selling pot? Or do you want to create the socially equitable marketplace you’ve been pitching from the podium?
12/7/21 Update: Federal Budget Delays
Unfortunately for the 714,153 residents of DC, our lack of statehood means that not only do we experience taxation without representation, but our city budget has to be approved by Congress. For those who don’t know how this process works: the Mayor submits a preliminary budget to the DC Council. The Council either accepts it or adopts a new version, which then goes back to the Mayor for final approval. Once an agreement is reached between the Mayor and the DC Council, the budget is then submitted to the President of the United States for submission to Congress for approval. Our city budget is one of 12 annual federal appropriations bills that Congress has to approve.
Now, why is this important? Because this is the reason that DC has been unable to legalize recreational sales of cannabis, despite the passage of Initiative 71 in 2014. Immediately following the passage of the initiative, Maryland Republican Rep. Andy Harris introduced an amendment to the Senate appropriations bill that has effectively allowed Congress to block the city government from legalizing commercial adult-use sales. This rider remained in place until October 18th when the Senate Appropriations Committee omitted the Harris Rider from its version of the 2022 appropriations bill.
Thus, conversations surrounding Initiative 71 and DC’s quasi-legal recreational cannabis market of “gifting” began to heat up. On November 19th, the DC Council held a public hearing (see below for our coverage of the event) with over 100 people testifying their support for legalizing sales of recreational cannabis. However, while these initial conversations were incredibly promising, on December 1st, 36 hours before federal funding was supposed to lapse, an emergency funding bill passed to keep the government open until early February. This deal, which keeps the government operating until February 18th, included the Harris rider, meaning that DC will be unable to pass legislation regarding recreational sales of cannabis until Spring 2022. The DC Council will have to move quickly if they want to pass legislation before the midterm elections. It’s unfortunate that Congress decided to use the DC market as a bargaining chip to keep the government open, but that is the partisan world we live in.
Ultimately, this impacts local entrepreneurs working in the I-71 market, the vast majority of whom are people of color. However, it does give us more time to work alongside the DC Council to improve their recreational cannabis bill. In the meantime, it is imperative that DC residents continue to express their support for Initiative 71 businesses, advocating for their inclusion in DC Council Bill 24-0118. These businesses deserve a fair shot at licensing within the first year licenses become available, as many of them are eager to enter the recreational market. To stay-up-to-date on the actions you can take to support I-71 businesses during this transitionary period, follow The I-71 Committee on social media.
11/19/21 Update: DC Council Hearing
On November 19th, Chairman Mendelson led a public hearing on his proposed Comprehensive Cannabis Legislation bill. More than 100 people signed up to testify, so it was a long day. Over the course of seven and a half hours, neighborhood leaders, medical marijuana representatives, I-71 shop owners, everyday citizens and industry experts all had the opportunity to make their voices heard. For three whole minutes.
It was very clear to me throughout the day that, while the medical marijuana shop owners have Chairman Mendelson’s ear, he’s never bothered to actually talk to anyone involved with Initiative 71. Before you tried to take away thousands of peoples' livelihoods a few weeks ago, Chairman, wouldn’t it have been appropriate to at least hear their side?
As expected, several members of the medical marijuana market came out to ask the Council to take action against the I-71 shops. One of Phyto’s representatives, in particular, claimed that I-71 brands bring in $600 million dollars annually, which is a positively ludicrous number. For reference, legal weed in Colorado — y’know, the entire state — brought in $187.5 million in 2021. So DC’s market is 3x the size of Colorado. Sure it is. Are you in the market for any bridges, Council?
We Don't Want I-71. We Want Licenses.
Another of Phyto’s group spoke in support of I-71 businesses being given a path to licensure, which was refreshing to hear. These I-71 weed stores want to be licensed. They don’t wish to operate in a gray area that exposes them to police raids and armed robbers. I was so glad to hear one of my favorite talking points over and over: do not cap the number of licenses available! If you make enough licenses available, you will see a very high rate of compliance — the Gentleman guarantees it. If you don’t, I’ll eat my sweet-ass hat.
But don’t listen to me! I’m just some hat-eating weirdo on the Internet. Listen to the professor who teaches about the cannabis industry specifically and made the exact same case, pointing out that an uncapped cottage industry will keep more of DC’s money in DC, versus a tightly-licensed program run by large multi-state operators (MSOs).
Weed, Lies, and Video Conferences
A lot of myths were dispelled today. There was a mother and her young epileptic daughter who testified that the lack of third-party testing for DC’s medical marijuana program resulted in their purchasing oil from Takoma Wellness that made the daughter ill. There were several sad stories throughout the day, but that’s the one I can’t forget. The medical marijuana operators keep claiming their products are safer than I-71 when they factually can’t make that statement, like, at all.
It was also revealed that the narrative that Mendelson’s office has been pushing — that DC’s medical marijuana operators are suffering economically from I-71 competition — is a fabrication. The representative from ABRA, Fred Moosally, confirmed that since his department took over the administration of the MMJ program late last year, sales are up nearly 11 percent. ABRA has collected around $700,000 in patient application fees in that time. Dire straits, indeed!
For my two cents, the members of the Generational Equity Movement were today’s all-stars. They had four people testify, all city residents, who talked about how I-71 has impacted their lives. I think they summed up the I-71 industry’s stance best — if the Council legalizes cannabis sales but leaves I-71 out of it, then their pursuit of social equity has missed the point entirely. You have social equity today, right now, with Initiative 71. All they need are licenses.
What Happens Next Depends on Congress
As Chairman Mendelson said throughout the day, there’s nothing that can happen until the Harris rider is removed from the federal spending budget. While it was certainly clear that he’d like nothing more than to shut down every I-71 shop, like, yesterday, it doesn’t seem that he can. He already tried enacting emergency legislation to do it on Election Day but couldn’t get the votes. Short of somehow getting the votes he needs, his hands are tied.
That being said, if you hung on to the end of the call, you’d have heard him questioning ABRA’s representative to make sure they were on the exact same page about the illicit status of I-71 storefronts. It seems very possible that we could see another wave of raids in the near future, but DC’s cottage weed industry has endured these before.
Now if the Harris rider is removed, then things could change swiftly. The latest report from Martin Austermuhle points out that is not a foregone conclusion, and in fact, is looking unlikely. Surely, Congressional Democrats have something they want from Republicans more than for DC to finally get legal weed sales, and we know how heated these budget negotiations have been in recent years. If I were a betting man, my chips would be on the Harris rider sticking around.
If you want to help the I-71 shops stay in business, there’s something you can do! The Council is still accepting written testimony from the last couple of weeks. If you’re a DC resident that supports I-71 shops and think they deserve a fair shot at licensure, please consider emailing them at firstname.lastname@example.org to tell them so!
Initiative 71 Gets a Reprieve (for now)
As you can imagine, there was an uproar from the District's cannabis community when the news broke. Thanks in large part to grassroots campaigning from entrepreneurs, patients, and advocates on both social and traditional media, the Illicit Market Enforcement bills were removed from the agenda come Monday morning. Two separate organizations have also been formed and will fight together for Initiative 71's vendors seat at the table when recreational cannabis sales are discussed- GEM, the Generational Equity Movement, and the I-71 Committee. Full disclosure, Gentleman Toker has joined the I-71 Committee.
How You Can Save I-71
So the immediate danger may have passed, but we are wary of Chairman Mendelson's intentions and alliances going forward. On November 19th, you have an opportunity to be heard by the Council- no matter what state you claim residency in- over Zoom in a public session. On the same day, a rally is planned outside City Hall to implore DC's leadership to listen to the people whose livelihoods will depend on their decisions. Please consider participating in one or both if Initiative 71 has improved your life. If you'd like to speak to the City Council, November 17th is the last day to sign up- but don't wait that long! Click that link now, I'll wait. I need to make another cup of coffee anyway.
Shutting Down I-71 is a Bad Idea
Do you remember what it was like trying to find trustworthy and quality cannabis in DC before Initiative 71? Cracking down on these vendors before a recreational sales system is open for business will effectively bring the District back into Prohibition. Helping the struggling medical market by legislating away their choices would have far-reaching consequences that would hurt literally everyone else in the city. Here, let me explain why shutting down I-71 is bad for people that like weed, people that don’t really care about weed, and the city’s own pocketbooks.
Whether you enjoy a spliff on a Saturday or smoke everyday, shutting down the I-71 market is bad news. You won’t be cut off from recreational cannabis entirely- everyone knows who won the War on Drugs. It’ll simply devolve back into the illicit market from the safe, mature, competitive market that exists today.
This is largely in part thanks to city leaders like Mayor Bowser that stood up to Congressional Republicans in 2015 when they tried to block legalization entirely by way of the Harris rider. That was its original, intended purpose, if you remember. The current state of things is a workaround that left both parties unhappy with the final result. That's politics, eh?
Diversity of DC Weed Start-Ups
Even if you don’t partake yourself, there are lots of good reasons you should support the city’s existing cannabis laws. For starters, a staggering number of the businesses that operate under Initiative 71 are owned by people of color. You will not find such rich diversity in any other state’s licensed cannabis program - there are too few licenses available and too many hurdles to clear for regular, everyday people to participate as anything other than employees. Initiative 71 represents more than legal weed. It’s a rekindling of the American Dream and the entrepreneurial spirit of its citizens. I’ve seen so many lives transformed by the Green Rush of Initiative 71 and the path it has created to the middle class and generational wealth-building that is in scant supply elsewhere. It would be a great shame to bring this to such a sudden end instead of working out a fair middle ground that will not exclude minority-owned businesses.
If the Initiative 71 businesses are pushed out, patients will be forced to the illicit market and options that are less safe for them. Is the plan to go back to arresting people for selling weed? Which communities do you think will be most adversely affected by increased police scrutiny? I don’t think you need to be Pat Sajak to solve the puzzle here. Racial tensions in this country are already heated; arresting law-abiding entrepreneurs is moving backwards on the progress we’ve made towards healing the wounds left in our nation’s collective psyche, and minority communities in particular, by the War on Drugs.
Economic Impact of Initiative 71
Further, the Chairman's proposal would “authorize civil penalties for the housing providers of illegal cannabis businesses.” Commercial landlords and Initiative 71 businesses formed a symbiotic relationship during the COVID-19 pandemic, creating the thriving storefront market we enjoy today. With more and more businesses going remote, retail dying to Amazon, and an ongoing pandemic, who exactly is going to fill these spaces if cannabis businesses are evicted? How will property owners restore that revenue?
Recreational cannabis availability also promotes tourism to DC. I’ve talked to countless visitors from all along the East Coast that came to DC to check out the weed scene here. They pay for hotel rooms, they eat out at restaurants, they patronize the District’s bakeries and convenience stores. All of these businesses and more are still reeling from the economic conditions brought on by COVID-19. Distressing their margins further by discouraging cannabis tourists will surely impact whether these businesses survive.
Who Benefits? Big Weed
Shuttering the Initiative 71 market is not the solution to helping the District’s medical dispensaries, some of which are already owned by weed conglomerates like Columbia Care. Given the rapid turnover of licenses and proliferation of "management agreements" with multi-state operators in Maryland and Virginia's medical programs, I think we'll see the rest of DC's medical marijuana businesses flip their licenses for a tidy profit in the very near future. These MSOs would have benefited the most from Chairman Mendelson's Illicit Market Enforcement Acts in the end, not the people or the businesses of this city. Initiative 71 could certainly be improved and I encourage the Chairman to work with his constituents, and not corporate lobbyists, to do so.
11/2/2021 Update: The Illicit Market Enforcement Acts
District leadership announced a November 19th session to begin planning what the future of weed in the city will look like. But don't count those chickens too quick, friend! DC Marijuana Justice, the organization largely credited with getting I-71 passed in the first place, says they're picking up chatter that Congressional Republicans will try to reintroduce the Harris rider. Emboldened by recent election wins, I'd take odds on this scenario playing out.
However, in a last-minute addition to the November 2nd DC Council Legislative Meeting, Chairman Mendelson's office issued a memo to introduce emergency measures that would shut down the Initiative 71 market and deny the recreational cannabis access the District's citizens overwhelmingly voted for in 2015. Ostensibly, this is to save the city's struggling medical marijuana dispensaries and the cultivators that supply them. See, half their customer base dropped out from the program when the emergency legislation that prevented their cards from expiring ended. That doesn't equate to actual sales, which should be the way we measure this, but let's presume it's had some adverse effect.
So the plan was to shut down the Initiative 71 market immediately by means of emergency legislation via Mendelson's Illicit Market Enforcement Emergency Declaration, Amendment, and Temporary Amendment Acts. These bills would have created exorbitant fines for I-71 businesses and their landlords, including sealing of premises by the Metropolitan Police Department in the case of storefronts. "Many of these patients may be driven to purchase illicit cannabis,” claimed Chairman Mendelson in a memo directing these Acts to be added to the agenda. He wants to deny MMJ cardholders, certified under city guidelines to have legitimate need for cannabis medicine, the right to choose where they obtain it, and deny access for recreational use entirely in the process.