Open Air Marijuana Market Flourishes On H Street

Residents Say Marijuana “Gray Market” Brings Safety Concerns

1550
Street dealers often hand passers-by business cards promoting their wares. Photo: E. O’Gorek

A year ago, George Franklin, an alias, was working in his living room when he heard the clatter of footsteps outside the house. The noise was quickly followed by sirens. Franklin was disconcerted, but unsurprised; the sounds were not unfamiliar to him, given the proximately of his home to H Street NE.

However, he was surprised by what he found in his backyard a few hours later. Backpacks, thrown over his fence from the alley, littered the yard. They contained guns, cash and marijuana. According to Metropolitan Police Department (MPD), the source of the abandoned items was a raid on a nearby marijuana pop-up.

“When we’ve got people piling over our fences with backpacks full of product and guns, it’s kind of unsettling,” said Franklin.

In the District, it is legal to possess up to two ounces of marijuana. One can also “gift” up to an ounce to another person. However, retail sales outside of the District’s medical cannabis stores are illegal.

Some entrepreneurs have gotten around the prohibition by including a “gift” of a cannabis product in return for the purchase of other items such as artwork and tee shirts. Many of these “gray market” establishments, some of whose gleaming white, trendy interiors resemble the Apple Store, are geared towards upscale consumers.

According to neighbors, at least five gray market cannabis retailers are located between the 300 and 800 blocks of H Street NE. The concentration has attracted the notice of Virginia and Maryland residents, whose states also do not allow recreational cannabis sales.

The market created by these establishments draws individual street dealers, hoping to lure customers with better deals before they enter these stores. Taking a stroll down these blocks, this reporter was solicited multiple times by itinerant weed merchants. 

The combination of an unregulated gray market, a concentration of retail weed purveyors, street dealers and out-of-state consumers has created a “New Amsterdam,” the first open drug market in the area since the dark days of the early 90’s drug wars when over 80 open-air drug markets proliferated in DC.

Due to its semi-legal nature, this market runs completely on cash transactions, which makes its patrons, entrepreneurs and retail establishments ripe targets for robberies. Cognizant of the risk, some retailers allegedly employ armed guards while those on the street often pocket “protection.”

An Open-Air Cannabis Market

Advisory Neighborhood Commissioner (ANC) Joel Kelty (6C-05) said he isn’t against marijuana. “I’m against the chaos that comes from an unregulated market,” he states. 

Kelty’s constituents complain about businesses “gifting” marijuana. Some of those establishments, they say, have security personnel wearing body armor, and may be carrying guns. “It’s been described to me as ‘paramilitary,’” Kelty said, “and it makes people nervous.”

One of the biggest problems is the sheer number of such establishments in the area, Neighbors worry that this is making their residential commercial zone into the marijuana market of choice for the region. H Street Main Street Executive Director Anwar Salem said he is aware of five legal businesses selling cannabis-related products, but said there could be many more operating illegally as pop-ups. 

COVID has helped create a “whack a mole” of empty storefronts selling marijuana, neighbors add; as soon as a pop-up is shut down at one location, another pops up. Cannabis entrepreneurs are even known to operate from sidewalk card tables.

All business is done on a cash basis because cannabis remains a Schedule 1 illegal substance. With marijuana sales still a federal crime, banks and credit card companies are often reluctant to do business even with legal dispensaries, unwilling to risk being charged with aiding and abetting a federal crime.

The concentration of cannabis establishments, according to Kelty, attracts large numbers of outsiders to the neighborhood. The congestion caused by these cannabis shoppers creates headaches for residents such as limited street parking. More importantly, pedestrians face harassment from groups loitering to smoke on street corners. 

“I don’t think this is what voters were voting for when they passed Initiative 71,” Kelty said. “We as a community need to collectively agree what the parameters are and go with the parameters.”

Litter on a residential street north of H. Funnel is tobacco mixed with marijuana and rolled into a joint. Photo: E. O’Gorek

Congress Stalls Legal Retail Cannabis

“The gifting probably isn’t legal, and we’re probably not doing anything about it because the current situation really is irrational,” said DC Council Chairman Phil Mendelson (D), “and that’s because of the Congressional rider.” 

In 2018, Rep. Andy Harris (R-MD) tacked a Congressional rider onto a budget spending bill that forbid the District from spending any local tax revenues for the regulation of retail cannabis sales.

Lifting the rider, according to Congresswoman Eleanor Holmes Norton (D), is important because regulation of marijuana is key to public safety. “If marijuana sales were legal in DC, we would not be having these problems in our neighborhoods,” she said. 

“Essentially what we are doing is inviting illegal activity with all its concerns about public safety,” Norton said. “Marijuana is going to be used, and it’s going to be sold in the streets with people fighting among one another about those sales.” The open market for cannabis on H Street is a direct result of the lack of DC Statehood, Ward 6 Councilmember Charles Allen (D) concurs.

Allen regularly speaks with Kelty and other H Street neighbors and has partnered with MPD and DCRA to investigate gray market cannabis retailers. “I share my neighbor’s frustrations that we haven’t seen more progress,” Allen said, “but I am hopeful we’re getting closer to creating a legal structure for regulation of marijuana sales that can address many of these ongoing issues.”

Regulation is queued up. In March, Mendelson, Allen and Councilmember Kenyan McDuffie (Ward 5-D) co-introduced comprehensive legislation to regulate recreational cannabis sales in the District, a few weeks after Mayor Muriel Bowser presented a slightly different bill. 

Under both these bills, the regulatory regime would be overseen by the Alcoholic Beverage Regulation Administration (ABRA) which currently oversees medical dispensaries. The agency would be renamed the Alcoholic Beverage and Cannabis Administration. Both bills specifically outlaw “gifting” and limit the total daily amount purchased by consumers. They also restrict cannabis businesses from locating in most residential areas or within 400 feet of schools or recreation centers. They also tax cannabis sales and direct revenues to benefit those communities most impacted by drugs.

But the DC Council is unlikely to consider any cannabis legalization until the Harris rider is lifted. Residents are looking for solutions before then.

Enforcing Existing Laws

MPD officers, according to neighbors, express frustration with the nebulous nature of marijuana legalization. It is not illegal to possess or gift marijuana. As a result, it is often difficult to discern when an actual sale has taken place, especially in the absence of extremely large amounts. However, brick and mortar retailers are subject to civil regulation.

In the District, DCRA issues business licenses and Certificates of Occupancy. Gray market cannabis sales are not a legal use of private commercial property. According to DC Code, DCRA can revoke a business’s license or its certificate for possession or sale of restricted substances or operating outside of the approved commercial use of the property. According to its spokesperson, DCRA has issued seven such notices on the H Street corridor over the last six months. 

But if there is alleged criminal activity, MPD needs to be involved. Officers say investigations of brick and mortar businesses are complicated. ”Operationally, it’s not something you just launch into,” said MPD First District Commander Morgan Kane. “It requires coordination, and planning.” Still, MPD regularly conducts raids on criminal businesses, the latest on the 1200 block of H Street NE on
May 19.

Capturing street sales is also difficult because in order to secure evidence for a conviction, officers need to see and hear elements of the transaction. Even when necessary evidence has been collected, those efforts do not always result in attempts to prosecute. 

“Is there the appetite for the prosecution when it comes to the lower level street marijuana dealings? I don’t think there is,” said Kane. She points out that an individual can legally possess up to two ounces of marijuana—enough for 100-120 joints, by most estimates. “If they’re within the confines of the law, there’s not much we can do,” she said.

The US Attorney’s Office, which prosecutes these cases, did not reply to multiple requests for comment.

But it’s not the pot that alarms neighbors. It’s the potential for violence attracted by the large amounts of cash held by both street dealers and gray market retailers. 

In August 2019, a shootout between would-be robbers and an alleged marijuana dealer took place at this H Street NE transit stop.

Street Violence

On Aug. 20, 2019, two men tried to rob a man seated in a bus shelter at Fifth and H Streets NE in broad daylight. The man was frequent local presence. According to neighbors, he moved his retail cannabis business to the bus shelter after his landlord evicted him from the second floor of a nearby commercial building. Officers confirmed the eviction, and said while the man was of interest, he had not been charged with a cannabis-related offense.

According to the MPD, the seated cannabis entrepreneur pulled out a handgun and fired multiple rounds at the robbers, shooting one in the leg. Bullets also struck the windows of several neighboring businesses. 

According to MPD Firearm Recovery Reports, every week since the beginning of this year, police have charged at least one person for both possession of a firearm and marijuana with the intent to distribute. While few of these individuals were arrested on H Street NE itself, there seems to be a link between cannabis street dealing and firearms.

While crime is generally down along the H Street NE corridor, Kane confirmed that there have been instances of robberies and carjackings associated with marijuana dealing.

“There’s a perception that there is no violence around marijuana,” Kane said. “I disagree with that. But H Street is a very diverse corridor. Is it something I’m concerned about? Absolutely. But is it to the level where it’s reflected in our stats as one of our driving sources? It’s not. But there is violent crime associated with, and guns associated with the sales of marijuana.”

Living With The “Market”

Resident Mike Handel doesn’t want to push these issues out to another part of the city. He wants to figure out how to make the situation work. “I think that the difficulty is figuring out what to do,” said Handel. “Absent anything changing with statehood, we have to figure something out. This is “the place” to go; the sheer density of these shops right here is also concerning—what’s going to happen? I don’t know how well they get along, and if there’s going to be some violence associated with trying to control the area.” 

Kelty, the ANC Commissioner, says that one way around the problem would be to reduce the concentration of these types of businesses in any single area.

Someone needs to take ownership of the situation, Handel said. “I think everybody’s just kind of hoping it will all work out, or that we’ll somehow magically become a state sometime soon, and that will solve everything, and I think we can’t wait for any of that stuff to work out.”