By: Jessica Wasserman, Esq.
By fall 2019, Washington, DC could finally be liberated to spend its own city funds to implement legal recreational marijuana sales. DC voters approved a ballot measure in 2014 that allows low-level possession and home cultivation of cannabis, but cannabis cannot be purchased or sold because regulation and taxation of sales has been effectively banned by the US Congress. Cannabis vendors have resorted to tactics like charging $40 dollars for a t-shirt and gifting cannabis as part of the sale.
Congress used its control over DC’s budget to prohibit DC from spending funds (for drafting the implementing laws, for enforcement, for collecting taxes, etc.) to regulate a legal marijuana program. Although the annual federal appropriations process is a winding road, sometimes interrupted by government shutdown threats, it looks favorable at the moment that the provision barring DC from spending funds on marijuana legalization might not be included this year. The provision from last year stated that:
Sec. 809. (a) None of the Federal funds contained in this Act may be used to enact or carry out any law, rule, or regulation to legalize or otherwise reduce penalties associated with the possession, use, or distribution of any schedule I substance under the Controlled Substances Act (21 U.S.C. 801 et seq.) or any tetrahydrocannabinols derivative.
(b) No funds available for obligation or expenditure by the District of Columbia government under any authority may be used to enact any law, rule, or regulation to legalize or otherwise reduce penalties associated with the possession, use, or distribution of any schedule I substance under the Controlled Substances Act (21 U.S.C. 801 et seq.) or any tetrahydrocannabinols derivative for recreational purposes.
In anticipation that Congress might remove the rider this year in a newly elected Democratic House of Representatives, DC Mayor Muriel Bowser went against Congress and recently proposed DC legislation, the Safe Cannabis Sales Act of 2019, setting out regulation and taxation (17% to be used for affordable housing) for the sale of recreational cannabis.
Bowser’s legislation, which still needs to be approved by the DC Council, would require that:
Must be at least 21 years old and present valid government identification to legally enter a cannabis establishment and purchase products.
Daily individual purchase limits:
1 oz of usable cannabis flower
5 grams of cannabis concentrate
16 oz of cannabis infused edibles
72 oz of cannabinoid product in liquid form
Prohibits consumption in public spaces such as sidewalks, parks, schools and roadways.
Creates the ability to purchase products online for delivery to a residential address.
Prohibits smoking in any workplace.
Taxes cannabis and cannabis products at a rate of 17% at the point of sale.
For 6 months after enactment, applications for licenses for off-premise retailers and cultivators will be first opened to those who already possess a medical marijuana license.
Five types of licenses which will be valid for a term of three years, renewable, and limited based on demand:
Cultivator, manufacturer, distributor, off-premise, retailer, and testing facility
A requirement of 60% of ownership for each new licensee and 60% of employees must be DC residents.
Public comment and ANCs feedback during the application process.
DC Government will use a seed-to-sale tracking system.
This new adult use regime will be run in parallel to the medical marijuana regime.
The Alcohol and Beverage Regulation Administration will be renamed the Alcohol Beverage and Cannabis Administration.
While far from certain, it is looking as if DC just might be able to finally move forward to establish a regulated adult-use marijuana market.
Contact Greenspoon Marder Partner, Jessica Wasserman, at jessica.wasserman@gmlaw.com or 202-669-9449.
About Greenspoon Marder Greenspoon Marder LLP is a full-service law firm with over 225 attorneys and more than 20 office locations across the United States. With operations from Miami to New York and from Denver to Los Angeles, our firm attracts some of the nation’s top talent in key markets and innovation hubs. Our core practice areas include Real Estate, Litigation, and Transactional Services, complemented by the capabilities of a full-service firm. Greenspoon Marder has maintained a spot on The American Lawyer’s Am Law 200 as one of the top law firms in the U.S. since 2015, and our goal is to provide exceptional client service by developing a thorough understanding of each client’s business needs and objectives in order to provide strategic, cost-effective solutions.
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