D.C. aims to boost ailing medical marijuana industry

The “gray” marijuana market in the District is out-competing the city’s regulated medical cannabis marketplace, according to council members who want to rescue dispensary businesses.

Lawmakers unanimously approved measures that include declaring the week of 4/20 an annual medical marijuana sales tax holiday and allowing people aged 65 and over to temporarily self-attest to obtain a medical marijuana card.

Why it matters: The legislation comes amid a debate over whether to crack down on the “gray market,” where businesses sell goods such as fruit juice or art and provide marijuana as “gifts.”

Since marijuana possession became legal in 2015, Congress has barred the city from moving further and enacting a legal sale-and-tax system for recreational pot. That limbo proliferated pop-up markets “gifting” marijuana and claiming to comply with the law. Police often disagree and have raided such shops.

D.C. Council Chair Phil Mendelson unsuccessfully pushed to punish such vendors late last year. He remains a top proponent of increasing civil penalties on pop-up markets.

But stiffer penalties don’t appear to have wide council support. Some point out the pop-up markets provide a livelihood for many vendors and have gained popularity because their prices are lower. The medical market is taxed and has quality-control measures for cannabis.

Between the lines: Shoring up the medical marijuana industry also aims at laying the groundwork for an expanded home-grown, legal cannabis market.

Once the District gains the authority to legalize recreational sales, officials want local businesses to be ready. “The way things are going right now, the black market could run the legitimate businesses out of business, and then they won’t be there to step into the recreational field,” Mendelson told Axios. Out-of-state enterprises are “lurking on the borders to come in,” he added.

What’s next: Spokesperson Lindsey Walton says Mendelson will likely submit a future proposal that anyone 21 and over be able to self-attest that they qualify for medical marijuana.

That would effectively expand the District’s legal marijuana market, allowing most adults to obtain a medical card without needing a doctor’s note. Under the bill that passed, senior citizens would be able to self-attest for their medical card until September 30, 2022.