DC adult-use stores file lawsuit against city, mayor

The Alliance for Recreational Cannabis Entities filed a lawsuit against several regulatory and government entities to stop enforcement action against their stores in the District of Columbia.

The group, which has seven members, filed the suit against the District of Columbia, Mayor Muriel Bowser, the Alcoholic Beverage and Cannabis Administration, the Department of Licensing and Consumer and the Metropolitan Police Department Chief Pamela A. Smith

Five of the Alliance’s member companies are owned by District of Columbia residents, one is owned by a Virginia resident, and one company is partially owned by a Maryland resident.

DC’s legalization

The District of Columbia approved the “Legalization of Possession of Minimal Amounts of Marijuana for Personal Use Act of 2014” (commonly known as I-71), to allow the use of and possession of adult-use cannabis. However, due to the inclusion of a congressional budget rider, which is commonly known as the “Harris Rider,” D.C. has been prohibited from using funding to carry out any rules or regulations associated with the possession, use or distribution of cannabis.

The District also worked against legalized cannabis and set about bolstering the medical marijuana program.

The retailers in the lawsuit employed a workaround by gifting cannabis to shoppers. They might sell an item, like a T-shirt, and include a gift of cannabis with the purchase. They said their businesses were profitable, whereas the medical program was beset with major problems.

I-71 gets a redo

Realizing the problems with I-71, Washington, D.C., sought to transition those retailers to a regulated adult-use market. However, applicants in the I-71 transitional licensing round were required to complete an affidavit attesting that the applicant conducted illegal cannabis sales in the city even if the applicant felt that this was an inaccurate portrayal of their business activity.

“Every applicant was required to sign and submit this attestation form, and failing to sign the attestation form resulted in denial of the application,” the complaint read. “Later after consulting with counsel on or about September 4, 2024, Plaintiff members that applied in the ‘I-71’ transitional round realized that, by signing the affidavit, they involuntarily and unknowingly waived their Fifth Amendment right against self-incrimination.”

The complaint further said that after the conclusion of all the medical cannabis licensing rounds, the District of Columbia increased enforcement by issuing cease-and-desist orders and summarily closing business without pre-deprivation hearings, even though these cease-and-desist orders and summary closures deprive store owners of significant property and liberty interests.

“Multiple members of the Alliance have received cease-and-desist orders, requested hearings, attended hearings, and lost in these hearings,” the lawsuit read.

The Alliance wants the enforcement to stop and claims their cannabis should not be seized because they can lawfully possess it. They also claim the gifting is lawful under the code as it is written.