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ANCs Consider Applications for Retail Medical Marijuana

The medical cannabis licensing race is on.

Advisory Neighborhood Commission (ANC) 6B protested an application from UpNSmoke LLC (427 Eighth St. SE, former location of Sole Wash) for a Medical Retail Cannabis License.

UpNSmoke currently operates as an I-71 cannabis seller and is taking advantage of emergency legislation allowing these businesses to apply to the Alcohol Beverage and Cannabis Administration (ABCA) for a license to sell medical marijuana.

The 90-day application period opened on November 1, 2023 and will close on January 29, 2024.

Applications are first-come, first-served, said representatives from ABCA. If an application is received for an address where an existing retailer –or even one that has been placarded– already exists within 400 feet, then ABCA would deem the application as ineligible and it would be denied.

But there’s a still an opportunity for some applicants to have a bit of a lead. The law says that half of all licenses issued to establishments have to be issued to social equity applicants. Those are defined as District residents who earn less than 150 percent of mean household income and/or either have themselves been convicted of —or have a family member who was convicted of— a cannabis or drug-related offense.

Social equity applicants are not merely privileged, however. ABCA said the total licenses awarded by the agency during the 90-day period is actually dependent upon the number of social equity licenses awarded. If eight social equity licenses are awarded in those 90 days, ABCA can grant up to 8 standard licenses, the agency clarified.

Those are not the only limits on potential licensee. In addition to privileging social equity applicants, District legislation limits licenses within specific distances. Medical cannabis retailers must be 300-feet from schools and recreation centers. Individual businesses also must be located at least 400 feet from an existing licensee. How long is that? About the length of the 300 block of Pennsylvania Avenue SE (where the Hawk ’n’ Dove is located).

It means that a successful application could effectively freeze out another on the same block, a real possibility on several blocks of H Street NE, for instance. ANC Commissioner Chander Jayaraman (6B06) described the application process as a “hunger games situation,” noting that a new operator without a storefront who submitted paperwork would be prioritized over a current operator who has not yet done so.

The so-called I-71 or gifting shops currently operate without health or safety oversight, Allen’s Chief of Staff Kate Mitchell told ANC 6B, meaning consumers are vulnerable to cannabis of unknown quality and origin. In some instances, the lack of regulation has also created serious public safety concerns. Commissioners have observed an enforcement gap in the new on-ramp process for unlicensed cannabis “gifting” shops to become licensed medical marijuana retailers. But until recently, there was nothing to compel I-71 shops to apply for the license.

But strategically, it makes sense for a business like UpNSmoke to initiate an application as soon as possible.

That’s because in January, DC Council passed emergency legislation introduced by Councilmember Charles Allen (Ward 6-D) designed to address that gap. The legislation gives ABCA the teeth to go after gifting shops, forbidding them from representing themselves as i-71 shops or as selling cannabis at all.

In a press release, Allen said as the application period opened it was clear that enforcement was necessary for shops that still choose to operate illegally. “The goal is to create an enforcement scheme for cannabis that more closely mirrors how we regulate the sale of alcohol for bars and liquor stores in the District and in doing so, create safer neighborhoods for everyone,” Allen said. 

Mitchell said enforcement won’t apply to people who have initiated or are already in the application process but have not yet secured a license.

Asked for details on enforcement, representatives for ABCA noted that Mayor Muriel Bowser had until Jan. 26, 2024, to take action on the emergency legislation. “ABCA will be prepared to enforce the legislation in the event that it becomes law,” said a representative.

At the January meeting, Jayaraman said that ANC 6B currently has three applicants for a medical retailer license before them. That includes UpNSmoke as well as No Kids Allowed (637 Pennsylvania Ave. SE) and DC Dash (727 Eighth St. SE, a bit more than 1000 feet from UpNSmoke). Meanwhile, ANC 6A considered applications from another UpNSmoke location ( 712 15th Street NE) and Za Partners (1383 H St. NE) while ANC 6C heard a December application from New Leaf (416 H St. NE)

Zack Learman, legal representative for UpNSmoke, said they are a social equity applicant, as the business is at least 50 percent owned by District resident Hassan Dib. As a social equity applicant, Learn said, Dib earns less than 150 percent of the median family income as set forth by US Housing and Urban Development and was previously convicted under a cannabis or drug-related offense.

Representatives said they would work with ANC 6B to move to full compliance. UpNSmoke Barracks row has two other locations; the Eighth Street site has been open for about a year. There are two other UpNSmoke locations. One is at 3289 M St NE in Georgetown. Another is located about .1 mile north of Miner Elementary, also applying for a medical license under consideration by ANC 6A.

Learman is an expert in cannabis legislation, but he lives in Michigan. Citing this, Jayaraman explained to him that the ANC is concerned about loitering as the establishment neighbors a 7-11.

Security is also a concern even with legal cannabis sales. The commissioner said he would be watching the security and monitoring on the front of the storefront, a concern echoed by other commissioners.

Operators said that they employ one of the only security services approved by ABCA. Security is always on site to verify identification and sales as well as behavior after purchase, they clarified. Hussein Dib added that they have 24/7 security cameras but that customers entering the storefront are tracked via identification, so they know who is on site and at one time.

The ANC is not opposed to medical cannabis sales, clarified Chair Edward Ryder (6B08). The protest was needed because there is no process for requesting an extension of the hearing deadline under current District legislation.

Right after speaking with UpNSmoke, the ANC voted 8-0-1 (Avery) to support the emergency legislation proposed by Allen. However, the letter asks DC Council to bring regulations for the distance from which a cannabis business can operate in proximity to a school or recreation center in alignment with requirements for alcohol licensing. It is 300 feet for cannabis and 400 for an alcohol license. It also requests future legislation include a process to request an extension of the protest deadline, currently absent from DC Code.

UpNSmoke representative Learman said he understood that the application is the point at which the ANC could impact their operations, and he understood why they needed to protest. But, he said, the business only wants to take the opportunity to operate in full compliance, Learn added. “We’re in the gray and we’re looking to move to the white,” he said.

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