Cannabis Business in Washington DC

What’s Legal in The District?

● In Washington D.C., adults 21 and over can legally possess up to two ounces of marijuana, give one ounce to another adult over 21 without payment, and cultivate up to six plants at home (no more than three mature). They can also use marijuana on private property.

● Selling any amount of marijuana, possessing over two ounces, operating vehicles/boats while under the influence, and using marijuana in public remain illegal.

● Individuals under 21 cannot possess marijuana. Those found with up to two ounces will have it confiscated but won't be arrested.

● The Washington D.C. Alcoholic Beverage and Cannabis Administration (ABRA) oversaw the medical marijuana program in Washington D.C., regulating licenses for cultivation centers, dispensaries, and testing laboratories to ensure compliance with local laws. ABRA enforced restrictions on public consumption and maintained guidelines for safe access.

● Medical marijuana cardholders can possess up to two ounces monthly, but public consumption remains illegal.

Washington D.C. Cannabis Industry Figures

● Total cannabis sales in Washington D.C. experienced a slight increase from $17.99 million in 2022 to $19.76 million in 2023. However, sales figures for 2024, totaling $11.89 million as of September 16, 2024, indicate a potential decline in sales. This suggests some fluctuation in the D.C. cannabis market.

● Both medical and recreational cannabis purchases in D.C. are subject to a 6% sales tax. This uniform tax policy applies to all cannabis transactions, ensuring consistent financial obligations. Notably, there is no additional excise tax on recreational cannabis.

● The number of medical marijuana patients in Washington D.C. saw significant growth from January to December 2022, peaking in December. While 2023 began with higher figures than the start of 2022, the numbers fluctuated throughout the year with a high point in March followed by a general decline. The second quarter of 2024 showed a slight upward trend with over 28 thousand patients registered.

Cannabis-Touching Business Licenses in Washington D.C.

The Alcoholic Beverage and Cannabis Administration regulated cannabis-related businesses in Washington D.C., overseeing the licensing process for various medical cannabis operations. Here’s a breakdown of the different licenses available:

• Conditional License: Offered a temporary option for businesses that had not yet secured a location. This license granted applicants the ability to pursue any of the six cannabis business licenses, with a one-year timeframe to establish a site and provide ABRA with the necessary documentation and fees.
• Retailer: Permitted the sale of medical cannabis and associated products to registered patients and caregivers. Retailers could also engage in the production, purchase, and sale of accessories, and had the option to apply for endorsements to expand their range of services.
• Cultivation Center: Allowed cannabis to be grown specifically for distribution to licensed retailers in the District. The cultivated cannabis could then be sold to qualified patients through approved retail outlets.
• Courier: Facilitated the delivery of medical cannabis, related products, and accessories from licensed retailers and online vendors to eligible patients and caregivers.
• Manufacturer: Focused on the preparation, packaging, and labeling of medical cannabis products intended for sale. These products were distributed to licensed retailers and online sellers for availability to qualifying patients.
• Internet Retailer: Enabled businesses to sell cannabis and accessories online or via mobile apps, bypassing the need for a physical storefront, with delivery options available for eligible patients.
• Testing Laboratory: Conducted quality assurance testing on medical cannabis and related products, providing test results to licensed growers and manufacturers to ensure safety and regulatory compliance.

Application Process

Application periods for most licenses were restricted to designated times announced by ABRA. However, Testing Laboratory Licenses, Certification Training Provider Permits, and Retailer Endorsements could be applied for year-round. Prospective cannabis business owners could find information about open application periods on the ABRA website.

Applications were accepted online, in person, by mail, or via email, but only during the specified periods for each license type. If an application was received outside the designated window, it would not be considered. Once notified of acceptance, applicants were required to pay the application fee within one business day. \ \

Ancillary Cannabis Businesses in Washington D.C.

Ancillary cannabis businesses provided essential support to the cannabis industry in Washington D.C., offering specialized services that helped cannabis-touching businesses operate smoothly and remain compliant. These services ranged from training and legal guidance to financial management and security solutions.

Medical Cannabis Certification Training Provider: These businesses were approved by the ABC Board to conduct educational training on compliance with D.C. laws regarding medical cannabis, usage, security, and theft prevention. All employees and representatives of licensed medical cannabis businesses were required to complete training from a Board-approved provider and submit a valid certificate to ABCA with their annual registration. Currently, two businesses held permits as Medical Cannabis Certification Providers.

Insurance Providers: These companies offered tailored insurance solutions to cannabis businesses, covering risks such as product liability, property damage, and crop loss. Proper insurance was crucial for safeguarding against potential legal or financial challenges in the cannabis industry.

Accounting Services: Accountants specializing in the cannabis sector provided guidance on tax compliance and financial reporting, helping businesses navigate regulations like IRS Section 280E, which imposed strict limitations on deductible business expenses.

Legal Compliance Experts: Legal professionals assisted cannabis businesses in understanding local and federal regulations, including licensing, zoning laws, and ongoing compliance requirements. Their expertise helped businesses maintain legal operations within the industry.

Banking Services: Due to limited access to traditional banking, cannabis businesses often worked with specialized banks and credit unions familiar with the industry's requirements. These institutions offered solutions for payroll, transactions, and financial management.

Security Firms: Security companies provided services such as surveillance, secure transportation of cash or products, and facility protection. Ensuring compliance with security standards was essential for safeguarding cannabis operations.

Point-of-Sale (POS) Companies: POS software providers tailored their solutions to meet the needs of cannabis businesses, offering systems that helped with inventory tracking, sales processing, and compliance reporting.

Marketing Services: Marketing firms with expertise in the cannabis industry assisted businesses in promoting their products while adhering to advertising regulations. They helped create strategies that targeted the appropriate audience while maintaining compliance.

Real Estate Services: Real estate professionals supported cannabis businesses in finding compliant properties for cultivation, retail, and other operations. Their knowledge of zoning laws and cannabis-specific regulations was critical for securing suitable locations.

Packaging Solutions: Companies specializing in packaging provided compliant solutions for cannabis products, ensuring that packaging met safety standards and regulations while also appealing to customers.

Transportation and Logistics: Logistics firms offered transportation services that ensured the secure and compliant delivery of cannabis products between licensed businesses, including cultivation centers, retailers, and testing laboratories.