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InvisibleveggieM

Registered: 07/25/04
Posts: 17,538
D.C. Council Passes Emergency Legislation to Close "Gifting Shops" in the District
    #28637842 - 01/28/24 09:36 AM (3 months, 18 days ago)

D.C. Council Passes Emergency Legislation to Close "Gifting Shops" in the District
January 26, 2024 - JD Supra

The D.C. Council passed emergency legislation on January 9, 2024, in furtherance of its effort to close the D.C. cannabis industry's "gray market." The "gray market" is the cannabis industry that was created when D.C. legalized the cultivation and possession of cannabis, but Congress prohibited D.C. from legalizing the sale of cannabis. This inconsistency created the world of "gifting shops" in the District. For example, at a gifting shop, a customer will purchase a $45 sticker and will be gifted cannabis.

Unfortunately, D.C.'s legal medical cannabis market subsequently struggled to compete with the gray market. The D.C. Council estimated that gifting shops conduct $600 million in sales per year. In comparison, the legal medical cannabis dispensaries (of which six are presently operational) conducted approximately $37.5 million in sales in 2023.

To combat the gray market, the D.C. Council passed the Medical Cannabis Amendment Act of 2022 which allows unlicensed gifting shops to apply for a medical cannabis retailer license during a 90-day application period that closes on January 29, 2024. As of the D.C. Council hearing on January 9, 2024, 37 gifting shops had applied to become licensed retailers. This leaves a large gap between the current gifting industry and the legal medical market.

To deal with that gap, Councilman Allen introduced the Medical Cannabis Program Enforcement Emergency Amendment Act of 2024. The bill does several things targeted at eradicating the gray market in D.C.:

  • Gifting shops that choose not to obtain a medical retail license will be subject to fines, penalties, and cease-and-desist letters;
  • The Alcoholic Beverage and Cannabis Board is authorized to investigate and penalize unlicensed operators; and
  • Landlords of unlicensed gifting shops can be penalized for allowing a gifting shop to operate on the property after a notice of the unlicensed operation.

Of the three measures above, the landlord penalty presents one of the strongest enforcement mechanisms to eradicate the gray market. Real estate is already extremely difficult to obtain for cannabis operators due to perceived risk and properties that have federally backed financing. If landlords are now subject to penalties and fines, the appetite to work with unlicensed operators may be even less.

The emergency bill is awaiting Mayoral approval and is only effective for 90 days. However, Councilman Allen has already introduced an "interim" bill that would extend the effective date for another 225 days while the legislative process continues.

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InvisibleHolybullshit
Stranger
Registered: 01/06/19
Posts: 1,576
Re: D.C. Council Passes Emergency Legislation to Close "Gifting Shops" in the District [Re: veggie]
    #28641714 - 01/31/24 10:21 AM (3 months, 15 days ago)

They just need to change the law so that only individuals can gift, not businesses. With gifting limited to a set amount of grams. Like 15 to 3.5g, if it makes it more politically feasible.

Obviously if they were receiving cash for the cannabis it wouldn't be a gift. Even with the thinly veiled attempt to hide the true transaction by coupling it with another item the buyer would still be expecting cannabis in return. Though such cases would be hard to investigate and prosecute if such a person were actually making a lot of money doing this, they would eventually run into problems with the tax man. You could add the caveat that no money is allowed to change hands when gifting.

Edited by Holybullshit (01/31/24 05:55 PM)

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Offlinejgotti
Stranger
Registered: 09/03/11
Posts: 120
Last seen: 1 day, 22 hours
Re: D.C. Council Passes Emergency Legislation to Close "Gifting Shops" in the District [Re: Holybullshit]
    #28644991 - 02/03/24 09:13 AM (3 months, 12 days ago)

Quote:

Holybullshit said:
They just need to change the law so that only individuals can gift, not businesses. With gifting limited to a set amount of grams. Like 15 to 3.5g, if it makes it more politically feasible.




My sense of it (from using these services myself) is that some gray market providers in DC are operated by an individual or a small group of individuals, rather than being a business per se. There are tons of gray market pot sellers in DC now, most don't have a brick and mortar store.

In terms of 'gifting', in the beginning, sellers would use gifting as the pretense for selling pot. But starting around 3 years ago (I'd estimate), a sizeable number of sellers no longer bother with the pretense of a 'gift'. Nowadays, it's a straight-up transaction - you hand them the money, they hand you the weed. After mushrooms became decriminalized a few years ago in DC, some of the weed sellers have started selling mushrooms.

It'd be a shame if they shut down these gray market operators. A lot of people rely on them.

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OfflineSeriously_trippin
Cosmic Guru Ganesh
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Registered: 07/12/13
Posts: 14,727
Last seen: 1 hour, 40 minutes
Re: D.C. Council Passes Emergency Legislation to Close "Gifting Shops" in the District [Re: jgotti] * 1
    #28646761 - 02/04/24 07:43 PM (3 months, 10 days ago)

Make it legal the Grey and black market will shrink. It'll never dissappear but I'll tell ya since weed was legalized in my area I haven't gotten street weed once since then.


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