PR 25-0625 — Medical Cannabis Clarification Supplemental Emergency Declaration Resolution of 2024

ENROLLED ORIGINAL A RESOLUTION 25-428 IN THE COUNCIL OF THE DISTRICT OF COLUMBIA February 6, 2024 To declare the existence of an emergency with respect to the need to amend the Legalization of Marijuana for Medical Treatment Initiative of 1999 to provide a deadline date by which existing cultivation centers and dispensaries must file their applications with ABCA for additional medical cannabis facility licenses, to not allow a cultivation center to also hold an internet retailer license, to provide that the 2 ______________________________cultivation Councilmembercenter Kenyanregistration R.applicants that tied for second and received the same total score after submitting a medical cannabis facility registration application to the Alcoholic Beverage Control Board between November 29, 2021 and March 28, 2022, be awarded a cultivation center registration, to provide that other cultivation center and dispensary registration applicants that scored points or more after submitting a medical cannabis facility registration application to the Alcoholic Beverage Control Board during the same open application period be considered for a cultivation center or retailer registration, and to allow a cultivation center and dispensary registration applicant that scored 150 points or more to change the location of its facility without otherwise affecting the status of its application.

McDuffieRESOLVED, 5BY 7 A PROPOSED RESOLUTION _________ IN THE COUNCIL OF THE DISTRICT OF COLUMBIACOLUMBIA, __________________That Tothis declareresolution themay existencebe ofcited anas emergency with respect to the need“Medical toCannabis amendClarification theSupplemental LegalizationEmergency ofDeclaration MarijuanaResolution for Medical Treatment Initiative of 19992024”. to clarify which Advisory Neighborhood Commissions have standing to file a protest and allow the Alcoholic Beverage and Cannabis Board to extend the public comment period for up to 30-calendar days, to establish the requirement that all retailers be located more than 400 feet from each other, to clarify that cultivation center, retailer, and internet retailer licenses issued to unlicensed establishments count toward the overall 50% set aside requirement for social equity applicants, and to clarify the process for unlicensed establishments being issued a medical cannabis cultivation center, retailer, or internet retailer license.

RESOLVED, BY THE COUNCIL OF THE DISTRICT OF COLUMBIA, That this resolution may be cited as the “Medical Cannabis License Clarification Emergency Declaration Resolution of 2024”.

(a) TheThere Medicalexisted Cannabisan Programimmediate Enforcementneed Emergencyto Amendmentprovide Acta ofdeadline 2024,date effectiveby Januarywhich 25,existing 2024cultivation (D.C.centers and dispensaries must file their applications with ABCA for additional medical cannabis facility licenses, increase medical cannabis product availability to prohibit a cultivation center from also holding an internet retailer license, provide that the 2 cultivation center registration applicants that submitted a medical cannabis facility registration application to the Alcoholic Beverage Control Board (“ABC Board”) between November 29, 2021 and March 28, 2022 (“open application period”) that tied for second and received the same score be awarded a cultivation center registration, and provide that other cultivation center and dispensary registration applicants that scored 150 points or more after submitting a cultivation center or dispensary application to the ABC Board during the same open application period to be considered for a cultivation center or retailer registration.

ActENROLLED 25-371)ORIGINAL (“Act(b) 25-371”),In clarifiedApril that2023, Advisory Neighborhood Commissions within 600 feet of where the establishmentCouncil isenacted orlegislation willto beaddress located can file a protest of an application filed by an unlicensed establishment during the statutoryabove-mentioned 90-issues. calendar day open application period.

ActThe 25-371temporary, also allowed the AlcoholicMedical Beverage and Cannabis BoardClarification (“Board”)Supplemental toTemporary extendAmendment theAct unlicensedof establishment2023, publiceffective commentJuly period20, by2023 an(D.C. additional 30-calendar days.

WithLaw the25-31; next open application period for retailer and internet retailer social equity applicants beginning on March 1, 2024, it is necessary to apply this same protest standard and provide the Board the authority to extend the protest deadline to all cultivation center, manufacturer, retailer, and internet retailer applications.

(b)70 TheDCR Medical7924) Cannabis(“temporary Amendmentact”), Actexpires ofon 2022, effective March 22,1, 20232024. (D.C.

Law(c) 24-332;Comprehensive permanent legislation addressing these issues has been introduced but must complete the legislative process.

70(d) DCRIt 4303)is (“Act”)of prohibitsvital retailerimportance applicants that apply during the unlicensedprovisions establishmentof 90-calendarthe daytemporary openact applicationcontinue periodin fromeffect beinguntil locatedthe withinpermanent 400legislation feethas ofbecome eachlaw. other.

However, District law does not currently apply this 400-foot prohibition to retailer applications that are filed with the Alcoholic Beverage and Cannabis Administration (“ABCA”) during open application periods other than 90 calendar-day period for unlicensed establishments.

To avoid issues of overconcentration in specific blocks or areas of the District it is imperative that all medical cannabis retailers be required to locate more than 400 feet from each other.

(c) The Act requires that at least 50% of all new cultivation center, retailer, internet retailer, manufacturer, and courier licenses be set aside for social equity applicants.

The emergency legislation clarifies that cultivation center, retailer, and internet retailer licenses issued to unlicensed establishments during the statutory 90 calendar-day open application period count toward the 50% set aside requirement for social equity applicants.

(d) As noted above, the Act established a 90 calendar-day open application period for unlicensed establishments (“establishments”) to apply for cultivation center, retailer, and internet retailer licenses.

(e) The open application period for unlicensed establishments began on November 1, 2023, and ended on January 29, 2024.

ABCA received 76 applications from unlicensed establishments, with 26 placarded thus far.

(f) The Act requires the Board to notify successful establishments of license approval at least 15 days prior to the issuance of the license and to cease unlicensed activity immediately.

(g) However, these cessations would impede the good faith and legitimate pathway to licensure that the Council intended with the unanimous passage of the Act if establishments are afforded no opportunity to transition into the regulated market.

(h) Emergency legislation is necessary to allow ABCA to issue licenses by the later date of either September 30, 2024, or within 180 days of Board approval and require unlicensed activity to cease once an establishment’s license is issued by ABCA.

This procedure would stagger the demand for supply at cultivation centers and set these establishments up for success.

These changes would solely assist the establishments approved for licensure, while all other unlicensed activity would remain on track for enforcement.

(i) Emergency legislation is also necessary to allow those establishments that choose to discontinue operations after Board approval and are not involved in unlicensed activity to request one additional 180-day period extension to allow the applicant to take steps to resume business operations at the applicant’s proposed location.

This extension would only be granted if the applicant can demonstrate to the Alcoholic Beverage and Cannabis Board that it is making reasonable progress to resume business operations at the proposed location.

(j) The Committee on Business and Economic Development is currently considering legislation to enact these changes on a permanent basis.

The Council determines that the circumstances enumerated in section 2 constitute emergency circumstances making it necessary that the Medical Cannabis License Clarification Supplemental Emergency Amendment Act of 2024 be adopted after a single reading.