Despite the ongoing federal ban against marijuana, lawmakers have found a way to craft a medical cannabis program for Washington DC. But the industry built on top of that program appears on the verge of collapse thanks to local gift shops and robust competition from neighboring Maryland.
Legal operators in DC are facing many of the same problems their counterparts across the country are facing. They are highly regulated while facing stiff competition from black market operators. They are also facing competition from neighboring states. If the powers that be do not step in soon, the legal medical cannabis industry in the nation’s capital could go under.
The Grace Period Is Over
When medical cannabis first launched in DC, the lack of a regulatory framework opened the door to local gift shops selling medical cannabis products. Regulators turned a blind eye while they worked on putting together the rules. Once the rules were completed, they gave illegal operators selling in gift shops a certain amount of time to either get licensed or stop.
The grace period for gift shops has since expired. And even though regulators have sent cease and desist letters to unlicensed gift shops, they have not taken the steps to shutter any of them. So the shops continue doing what they have been doing since day one: selling medical cannabis without a license.
Meanwhile, in neighboring Maryland, recreational marijuana is now legal. Any adult can walk into a marijuana dispensary to purchase weed without a medical cannabis card or other form of state approval. What follows is to be expected: DC residents will drive the short distance into Maryland where they can buy marijuana cheaper and with considerably less hassle.
Legit Operators Can’t Compete
Between local gift shops and recreational marijuana in Maryland, legal operators in DC are struggling. They simply cannot compete. There is too much marijuana both inside and outside of the city. Legal operators struggle the most because they adhere to the regulations and pay taxes. Their competitors do not.
It is the same story elsewhere. Out in California, the black market continues to outpace the legal market by a wide margin. Legal operators have been begging state lawmakers for years to reform the program so that they can sell more competitively. Lawmakers have not responded to date. So California’s legal operators are being crushed by taxes, regulations, and the black market.
Finding the Balance Is Possible
It takes the right balance for a state-legal marijuana market to prosper. And although finding that balance is not necessarily easy, it is possible. Just ask lawmakers in Utah, where the legal industry is doing just fine.
Beehive Farmacy, a state licensed medical cannabis pharmacy with locations in Salt Lake City and Brigham City, explains that recreational marijuana is illegal in Utah. Medical cannabis is legal but quite restricted. Regulators have somehow found a way to guarantee that patients have access to medical cannabis while industry players compete effectively against a limited black market.
There is little doubt that the black market still exists in Utah. It’s also possible for Utah residents to cross into neighboring states to buy recreational marijuana. But the way regulations are set up in the Beehive State ensures a robust industry for growers, processors, and pharmacies.
Is there anything DC regulators could do to improve the situation there? For starters, legal operators want to see padlocks on non-compliant gift shops. They feel like shutting down the gift shops could at least make their operations attractive to people who have no interest in buying recreational marijuana in Maryland and bringing it back.