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Washington, D.C.’s illicit cannabis operators are being targeted in a new legal challenge brought by a collective of legitimate businesses frustrated at the state’s lack of enforcement.
On September 27, the Alliance of Legal Cannabis Entities (ACLE) filed a suit in the US District Court of Columbia targeting 24 individuals they claim are involved running illicit cannabis businesses in D.C.
In August, Business of Cannabis reported that the state’s failure to tackle the flourishing illicit cannabis market is killing the state’s legitimate operators, who are increasingly struggling with rising crime rates and threats from criminal operators.
In 2017, voters in D.C. (officially known as the District of Columbia) approved the legalization of cannabis for adult use.
However, because D.C. is considered a ‘federal district’, directly governed by the federal government rather than having full self-governance like the 50 states.
As cannabis remains federally illegal, Congress soon stepped in to block the implementation of the adult-use program, leading to a grey market in which businesses exploited a provision allowing the gifting of up to two ounces to a friend without payment.
Over time, this loophole has been stretched, with entire brick-and-mortar stores now operating under the guise of gifting.
Despite being granted enhanced powers to crack down on these illegal operators, the state has failed to effectively enforce the law, seeing legitimate businesses come under pressure not just financially, but from the crime that these operations have brought to the area.
In an effort to take matters into their own hand, the ACLE, organized by DC Holistic Wellness Group and Herbal Alternatives, has named 10 unlicensed shops that have openly flaunted state rules, alongside 12 landlords and property managers who have allowed them to operate on their estate.
Additionally, the lawsuit addresses concerns over public safety, citing that the products sold in these unlicensed shops lack regulation, testing, and traceability.
ACLE members argue that this illegal competition undercuts the licensed market, which faces strict regulations and significant operational costs. The suit seeks triple damages, equal to three times the profits earned by these illegal businesses over the past three years.
Meanwhile, there appears to be some positive movement on behalf of state enforcers, seeing around four stores padlocked over the last few weeks after new powers were granted to the Alcoholic Beverage and Cannabis Administration (ABCA) enabling them to shut down unlicensed cannabis shops.
However, this is a drop in the ocean compared to the hundreds of illegal operators estimated to be ‘gifting’ cannabis in D.C.
“}]] Washington, D.C.’s illicit cannabis operators are being targeted in a new legal challenge brought by a collective of legitimate businesses frustrated at the state’s lack of enforcement. On September 27, Read More