"Gifting" shops hurt D.C. patient count as legal transition begins
Patient enrollment and renewal counts have dwindled after "gifting" shops proliferated.
The medical cannabis industry in Washington D.C. is grappling with a deepening downturn as patient count dwindles and quasi-legal “gifting” shops begin to go legit.
According to the latest data from the Alcoholic Beverage Control Authority, revenue from growing and making cannabis products in D.C. is lower than last year but is slightly improving after reaching its lowest point in the fall. Despite this, the money made from selling cannabis in stores has dropped to the lowest level seen in four years due to lower sales and patient engagement.
Comparing this January to last January, there was $1 million less in sales. A big drop in the number of patients buying medical cannabis was also noted, with 1,500 fewer patients served.
Sales at dispensaries have fallen sharply, marking the worst performance in four years. The number of patients registered to buy medical cannabis has decreased by about 700 (an 11% drop), and nearly 1,900 patients are at risk of losing their access because their certifications are expiring soon.
The number of patients from other states, particularly Maryland, Virginia, and Florida, who use D.C.’s medical cannabis program has also decreased significantly.
While there were small increases in the sales of certain lower-priced cannabis products like shake, trim, and prerolls, these did not make up for the large decrease in overall sales. The total amount of cannabis sold dropped significantly, by over 100 pounds from the previous month.
The report also highlights that straight cannabis bud sales have been decreasing for five months in a row, with a significant drop this month. However, inspections of dispensaries and cultivation centers found no violations, showing that the issues are not related to compliance but to market demand and patient registrations.
I-71 gifting circuit is over
The findings come at a time when D.C. is moving some businesses from the loosely regulated cannabis “gifting” market to a legal, medical dispensary system.
Out of the many gifting stores in the city, only 76 applied to become legal dispensaries, and so far, 26 of them have taken the first step towards legalization by getting a placard, according to Outlaw Report. The placard is important because it starts the process of becoming a legal business, but they still have to pass a period where local community groups can object to their application.
Half of the businesses that got the first approval are part of the social equity program, and the other half are regular applicants. They might be able to officially open by late April.
However, most applicants haven’t been approved yet, and some had issues with their applications that need fixing. Only three have been outright rejected, showing that the ABCA is trying to work with businesses rather than just denying them.
Many well-known gifting shops didn’t apply, including some that have been historically involved in the community and industry efforts. One shop, Monko, tried for a different type of license but hasn’t been approved yet. Another, Smoke & Tingz, might get denied because it’s too close to another dispensary, Cloud 9, which applied earlier.
Businesses not on the list to become legal now face the risk of getting warnings, fines, or being shut down. The ABCA wants to balance the market between social equity and non-social equity businesses, which might delay some applications if not enough social equity applicants qualify.
The next chance for businesses to apply starts on March 1, focusing on these social equity and online retail applicants.
