Despite Congressional Blockade, D.C. Lawmakers File Marijuana Sales Bill With Reparations Funding For Criminalization Victims

Washington, D.C. lawmakers have filed a revised bill to create a regulated adult-use marijuana market, despite an ongoing congressional ban that blocks the District from enacting the reform.

The legislation, introduced by District Council Chairman Phil Mendelson (D) and six other councilmembers, is largely consistent with an earlier version that received a hearing last year but was not ultimately enacted—though it includes a new reparations provision to provide direct payments to people who have been harmed by cannabis criminalization.

While D.C. voters legalized low-level cannabis possession, home cultivation and gifting through a ballot initiative in 2014, there’s currently no system of regulated sales. A congressional spending bill rider from Rep. Andy Harris (R-MD) that continues to be reenacted by Congress under both Republican and Democratic control prevents the District from using its local tax dollars to implement a commercial marijuana market.

There were hopes that lawmakers would remove the prohibition from the latest appropriations package that passed last month, but even with Democratic majorities in both chambers last session, the language was ultimately kept in the bill—with the support of the Biden administration.

As such, the local government in the nation’s capital can’t enact the new cannabis regulation bill without violating federal law, but a federal oversight agency determined last year that the congressional rider does not preclude local officials from taking procedural steps to prepare for the eventual reform, such as holding hearings.

“Notwithstanding congressional interference in D.C. affairs, we’re thankful that the D.C. Council has moved so swiftly and decisively on this comprehensive cannabis legislation, which prioritizes social equity and community investment,” the i-71 Committee said in a statement to Marijuana Moment. “This policy is another step in the right direction for the D.C. cannabis industry. We look forward to continued conversations and collaboration with the Council, ABCA and the mayor’s team.”

Most of the legislation mirrors what legislators filed and discussed last session, though there are some changes of note such as new language to use 40 percent of cannabis tax revenue to support a “Reparations for Victims of the War on Cannabis Fund” that will provide cash payouts to people impacted by prohibition before 2015.

“I’m looking at it as a strategy to reverse the inequitable impacts of the war on drugs,” Mendelson told DCist’s Martin Austermuhle, who first reported the new bill. “How can we use this opportunity for [revenue] to the government, if we can tax and regulate cannabis, to do more to help with regard to the income disparities that were exacerbated by the war on drugs? I think it’s an interesting idea. Let’s see how it plays out in terms of reaction, suggestions for improvement, or criticisms.”

Here are the key provisions of the D.C. marijuana bill: 

Adults 21 and older could possess, purchase and gift up to one ounce of cannabis. They could also grow up to six plants, only three of which could be mature.

The legislation calls for the establishment of an Alcoholic Beverage and Cannabis Board (ABCB) and the Alcoholic Beverage and Cannabis Administration (ABCA) to promulgate regulations and oversee the program.

Regulators could approve licenses for cultivators, manufacturers, microbusinesses, internet retailers, retailers and testing facilities.

Retailers and microbusinesses could apply for endorsements to provide cannabis delivery services and operate on-site consumption lounges.

Recreational marijuana products would be subject to a 13 percent tax, while medical cannabis would be taxed at six percent.

There are several social equity components such as requiring regulators to create “grant, equity, and loan programs for the purposes of providing financial assistance, loans, grants, equity, and technical  assistance to social equity applicants.”

A “Cannabis Equity and Opportunity Fund” would be established to support people who have been disproportionately impacted by criminalization with entering the industry and operating their business.

At least half of all license types would need to reserved for social equity businesses.

The “Reparations for Victims of the War on Cannabis Fund” would pay out people impacted by criminalization in amounts that are at least $5,000 and at most $80,000.

The bill also mandates the creation of a “Community Re-Investment Program Fund,” supported by 20 percent of marijuana tax revenue, to “address economic development, education, mental health treatment, substance use disorder treatment, non-law enforcement  violence prevention services, homeless prevention services, re-entry services, youth development, and civil legal aid.”

Regulators could set licensing caps, but they’d have to demonstrate that the result would not conflict with a goal to “significantly shrink the scale of the illicit cannabis market, and available evidence on the impacts of cannabis businesses on crime and property values.”

The Superior Court would be required to “automatically vacate, dismiss and expunge” any convictions for marijuana-related activity that’s been made legal.

The District would conduct an analysis on barriers to financial services like banking accounts for cannabis businesses and issue rules to resolve those issues.

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Again, the bill is effectively neutered under a congressional rider, with lawmakers limited to holding hearings without being able to vote on its enactment. But that preparatory work could help speed up regulatory implementation if the blockade is lifted as part of spending legislation later this year.

Both the House and Senate had omitted the rider in their respective versions before it was retained during bicameral and bipartisan negotiations. Rep. Eleanor Holmes Norton (D-DC) told Marijuana Moment last month that she’s “really disappointed” that Democratic House and Senate majorities failed to remove the rider.

After President Joe Biden issued a proclamation in October pardoning Americans who’ve committed federal marijuana possession offenses, as well as people who’ve violated the law in D.C., Norton called on the president to go further by federally legalizing cannabis and letting the District establish a commercial cannabis market and grant clemency on its own.

The congresswoman said the ongoing local ban, which was maintained in Biden’s first two budget proposals, represents a “shocking violation of D.C. home rule by a Democratic administration.”

A coalition of local, state and national advocacy organizations recently asked the U.S. attorney general to formally adopt a policy of non-enforcement to allow the District to legalize marijuana sales even in light of the ongoing congressional ban.

Meanwhile, D.C. Mayor Muriel Bowser (D) recently allowed a criminal justice reform bill to go into effect without her signature that contains an amendment to automatically expunge marijuana possession records for offenses that took place before the District enacted its limited cannabis legalization law in 2014.

Last month, the D.C. Council also unanimously passed a bill to make sweeping changes to the medical marijuana program in the nation’s capital. That includes eliminating cannabis business licensing caps, providing tax relief to operators, further promoting social equity and creating new regulated business categories such as on-site consumption facilities and cannabis cooking classes.

The Medical Cannabis Amendment Act would also codify that adults can self-certify as medical marijuana patients. The mayor’s deadline to act of the legislation is February 1.

Separately, the mayor signed a bill last year that bans most workplaces from firing or otherwise punishing employees for marijuana use.

The reform is designed to build upon on a previous measure lawmakers approved to protect local government employees against workplace discrimination due to their use of medical cannabis.

A poll released in September found that D.C. voters strongly support marijuana legalization and oppose a crackdown on the cannabis “gifting” market that’s emerged in the absence of regulated sales.

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