Medical cannabis dispensaries are rapidly expanding in D.C. as authorities transition former “gifting” stores into licensed operations.
In 2014, D.C. voters passed Initiative 71, which legalized recreational cannabis possession, use, and sharing among adults but prohibited direct sales. However, a loophole allowed businesses to sell non-cannabis products while including marijuana as a complimentary gift. Many consumers preferred this method to avoid being listed in a registry as medical dispensaries required patient registration.
Now these gifting shops had until the end of March to obtain a medical cannabis license or face closure. Before this transition, only eight cultivation facilities and seven dispensaries were officially licensed in D.C. after medical cannabis was legalized in 2010. However, the actual number of shops selling marijuana far exceeded this count. Regulatory enforcement has already resulted in the shutdown of 42 stores.
One such shop, Monko, previously sold items like T-shirts and pens before converting into a licensed medical cannabis dispensary. Owner Terrence White, who has been navigating the licensing process for six months, is preparing to begin legal sales.
His long-term vision includes expanding into a vertically integrated cannabis business. With an estimated customer base of 26,000 in D.C., he believes the transition levels the playing field for legal operators.
Obtaining approval to buy medical cannabis in D.C. is relatively simple as registration is open to anyone over 21, regardless of residency. Visitors can opt for a three-day medical cannabis card for $10 or a year-long card for $100.
The local cannabis industry faced challenges when Maryland expanded access to recreational marijuana in 2023, allowing former medical-only businesses to serve all adults. Many consumers preferred Maryland’s system to avoid appearing in a registry while still purchasing legally.
Unlike other jurisdictions, Washington, D.C., operates under congressional oversight, which has historically prevented local authorities from fully regulating cannabis sales. Congress has also blocked D.C. from allocating tax funds toward legalizing recreational sales.
The presence of gifting shops and competition from Maryland initially made national cannabis brands hesitant to enter the Washington, D.C. market. However, recent regulatory changes have attracted major players.
Cookies has now partnered with Alternate Solutions to establish a presence in the district, while Khalifa Kush has been collaborating with District Cannabis for over a year.
With gifting shops disappearing, licensed dispensaries anticipate better business prospects. Although D.C. is a relatively small market, serving its nearly one million residents remains a priority for cannabis businesses.
Successful companies like Green Thumb Industries Inc. (CSE: GTII) (OTCQX: GTBIF) operating in other markets will be hoping that the reforms being instituted in D.C. result in a more vibrant marijuana industry that is better able to serve its customers.
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