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Washington, D.C. Officials To Begin Inspections of ‘Gifting’ Shops Next Month

Regulators in the nation’s capital announced last week that they will start inspections of unlicensed cannabis businesses to verify compliance with various laws.

The Alcoholic Beverage Regulation Administration said that a “Joint Cannabis Task Force,” which consists of “various [Washington, D.C.] government agencies,” will start visiting the businesses next month following a 30-day grace period.

While D.C. voters passed an initiative to legalize recreational cannabis in 2014 (which was approved by the people), the actual sale of marijuana is illegal because it violates a congressional ban.

Businesses there have found a loophole through the practice of “gifting”: a customer pays for an item like a t-shirt and is in turn “gifted” some cannabis.

Many Washington, D.C. medical marijuana operators have been upset by this practice. They claim that illegal shops are cutting into the profits of their businesses.

A proposal to impose harsher sanctions on gifts businesses was rejected in April by D.C. City Council. It had been supported by the medical cannabis industry.

The inspections that were announced by the Alcoholic Beverage Regulation Administration will be done to ensure that the unlicensed cannabis businesses “abide by the regulatory requirements of DC Health, the Department of Consumer and Regulatory Affairs (DCRA), the District of Columbia Fire and Emergency Medical Services Department (FEMS), and the Office of Tax and Revenue (OTR).”

These laws were outlined by the administration:

  • “DC Health—Edibles and other manufactured products being offered by businesses to customers must be approved by DC Health; businesses also must be in compliance with DC food safety and hygiene laws.”
  • “DCRA—Businesses operating in the District must be registered with DCRA; businesses also must be in compliance with the District’s general business requirements such as having the proper business license and Certificate of Occupancy.”
  • “FEMS—Businesses must be in compliance with DC fire code regulations such as having a clear path of egress for customers and having properly working smoke and carbon monoxide detectors.”
  • “OTR—Businesses must register with OTR and pay taxes in DC.”

“Joint agency inspections will take place unannounced after the 30-day grace period to verify the compliance of operating businesses with legal requirements. Businesses in violation may be subject to a fine or other enforcement action permitted by the statutory authority of each respective enforcement agency,” the administration said in the announcement last week.

According to The DCist, “many of the gifting businesses say that they are already in compliance with D.C. business regulations and pay taxes on the products they sell.”

Lonny Bramzon, an attorney and owner for one of the gifting shops in D.C., told the website that he doesn’t see the administration’s announcement “as necessarily targeting marijuana, though he thinks it may be an easy way for D.C. to close down operators who haven’t followed city regulations.”

“It seems that ABRA isn’t concerned with the instrumentality of the gifting. It seems like they’re concerned with business licenses and certificates of occupancy,” Bramzon said. “If somebody is going to open a coffee shop, they’re going to get their licenses and do the inspections. Because of the nature and the purpose of the [marijuana] business, there’s a higher chance people will open without the proper licenses. Some shops might find this a way to get shut down. I would like to make sure everyone has their licenses and is paying their taxes like everyone else.”

Earlier this year, the D.C. City Council passed a measure that allows medical cannabis patients in the district to “self-certify,” meaning they no longer need a doctor’s recommendation for a card.

Last month, D.C. Mayor Muriel bowser signed the bill into law. It was welcomed by both patients and providers of medical cannabis, who had been outsold by gift shops in terms of sales.