Terrence White, chair of the i-71 Committee, at his gifting business Monko in D.C. on Dec. 20. (Marvin Joseph/The Washington Post)
It started with brownies to send her son to college.
It was 2017, just a few years after D.C. voters overwhelmingly voted to legalize small amounts of marijuana for recreational use, when Diana Alvarez set out a small basket of pot brownies at Lit City, her Columbia Heights smoke shop. Next to it, a small sign requested a $10 donation for the homemade marijuana edibles to help pay for her son’s tuition.
“Ant’s College Fund” brownies, as Alvarez called them, launched her venture into the city’s growing “gifting” market — a network of shops in D.C. that operate through a legal loophole that allows businesses to gift customers small amounts of cannabis with the purchase of another item, such as apparel, art or motivational speeches.
Shortly after voters legalized marijuana in 2014, Congress, which has oversight of D.C., introduced a budget rider that prevented the city from commercializing the drug. So for years, Alvarez, and dozens of other gifting shops — sometimes called i-71 compliant, after the number of the ballot initiative that legalized cannabis — have functioned as the de facto recreational market in the nation’s capital, operating in a legal gray area with little recognition, or regulation, from the government.
Last week, the D.C. Council passed legislation to overhaul that model by creating a path for gifting shops to apply for medical marijuana licenses, expanding the regulated market. The bill still has to be signed by the mayor and undergo congressional review, but if enacted, it has the potential to transform D.C.’s marijuana market for both businesses and consumers.
“It’s going to allow the District to be a lot healthier on the cannabis side,” said Terrence White, chairman of the i-71 Committee and a gifting shop owner. “It’s going to allow us to be doing it ‘right,’ as I call it.”
The legislation is the result of a long effort by local lawmakers to prop up the city’s already established medical marijuana businesses and address the growing number of gifting shops.At the center of the effort have been trade groups — such as the i-71 Committee and Generational Equity Movement — organized and led by gifting shop owners who have lobbied to be brought into the regulated market.
And while many in D.C.’s cannabis scene see the council’s vote as an important step forward, they remain cautious about how the transformation will play out in practice.
“My concerns, they’re more political than anything else,” Alvarez said. “It’s shifted throughout the years. At the beginning, it was a fear of being raided, and now it’s just about what’s going to happen next with these policies.”
The bill creates a permanent version of emergency legislation from June that allows adults to self-certify their eligibility for medical marijuana. The short application, available only to those 21 and older, requires a photo, ID and proof of residency. It’s proved successful, adding more than 10,600 people since the emergency legislation went into effect in summer, bringing the total roster of medical patients to more than 25,000 at the end of November, compared with just over 14,000 in May.
But there are only seven medical dispensaries and eight cultivators licensed in D.C. To match the demand of new patients, the bill also increases access to the city’s medical marijuana market by removing the cap on the number of medical dispensaries and cultivation centers and creates an application period for gifting shops in the city to move into the medical market before issuing fines against those that don’t.
All of these machinations are due to the fact that Congress prohibits D.C. from creating a recreational marijuana market. When Democrats took control of Congress in 2020, city leaders hoped that would signal the end of the “Harris rider,” named for Rep. Andy Harris (R-Md.), who introduced the legislation, and D.C. could move forward on creating a recreational market. But the rider has remained, most recently included in the $1.7 trillion spending bill passed last week.
After recognizing that the rider would remain, lawmakers in D.C. had to find another way to expand and regulate the market.
“[Lawmakers] really are welcoming this as kind of the only way to circumvent the rider,” said Meredith Kinner, an attorney who represents members of the cannabis industry in D.C. “It’s basically having a quasi-adult-use market without actually having an adult-use market.”
To the surprise — and pleasure — of gifting shop owners, the legislation passed by the council was a stark contrast from earlier efforts, led by Council Chairman Phil Mendelson (D), to shut down the gifting industry entirely.
In late 2021, Mendelson proposed emergency legislation that would have allowed the city to impose harsh civil fines on gifting shops. Then again in April, Mendelson revisited the issue, citing concerns about driving business away from the city’s licensed medical shops, but the council narrowly struck down the legislation.
In early August, the D.C. Alcoholic Beverage Regulation Administration announced that it would be conducting inspections of the gifting shops for health code, tax and licensing violations — although the agency did not end up starting those inspections.
The latest iteration of the bill came after significant compromise and negotiations, primarily between Mendelson and council member Kenyan R. McDuffie (D-Ward 5), who worked with some of the gifting shop advocacy groups and voiced concerns over equity in the market at the council’s Dec. 6 meeting. The amendments to the bill included expanding the licensing process to allow for more cultivation centers, shifting the application and enforcement timeline to give gifting shops more time to apply for a medical license, and allowing for a longer period before enforcement would begin. The legislation also sets aside 50 percent of licenses for social equity applicants, broadly defined as D.C. residents who are low income, have served prison time, or are related to someone who was incarcerated for a cannabis or drug-related offense.
“It’s surreal. A year ago, they were trying to shut us down,” said Mackenzie Mann, project manager for the Generational Equity Movement.
Mann said the changes — which give existing operators 90 days to submit an application and delays enforcement of gifting shops until 315 days after the bill goes into effect — was a victory that will give people of color and those with fewer resources more time to submit a strong application.
“They want to be regulated. They want to be able to breathe,” Mann said of gifting shops. “The most exciting thing is that these young Black entrepreneurs are being recognized for their ingenuity and being brought into the fold.”
The possibility of creating a more equitable cannabis market is part of what drew White of the i-71 Committee to the cannabis space. He opened his business, Monko, at the end of October, bringing a high-end shop — with a simple and clean interior with sharp lines, bright fluorescent lights and marble countertops — to Mount Vernon Triangle.
He said he prioritized showing lawmakers that gifting shops were serious and professional businesses as he lobbied the council to create a more equitable space, especially for those returning from prison and people of color, who have historically been more affected by the war on drugs.
“It just wasn’t just about opening stores and making money. It’s cool, but if we’re not going to change the landscape or culture to make it better, long term, why are we in it?” White said.
Medical dispensary owners, who have struggled to compete with the often more accessible and abundant gifting shops, are also excited about the possibility of change coming to the market. Norbert Pickett, owner of Cannabliss, one of the city’s seven medical dispensaries, located in Northeast Washington, sees the legislation as an opportunity to bring in more options and expand the market.
“It gives patients more access to safe and tested cannabis,” he said. “It unifies unregulated market and the legal market. For me, that’s a win.”
And for Alvarez, she was excited about the opportunity to officially be recognized by the city.
“I opened up a legitimate business. I have a business license. I pay taxes. I try to do things as legitimately as possible,” the lifelong Washingtonian said.
As for her son, he graduated from college this year.
