SAFE CANNABIS SALES ACT OF 2021
On February 26, 2021, Mayor Muriel Browser of the District of Columbia introduced the Safe Cannabis Sales Act of 2021 (“Act”), which if passed by the end of 2021, could allow for the retail sale of cannabis and cannabis products to adults 21 and older beginning October 1, 2022.
LICENSING
The Act establishes and entrusts the Alcoholic Beverage and Cannabis Administration (“ABCA”) and Alcoholic Beverage and Cannabis Board (“Board”) to create categories of cannabis licenses, issue licenses, and regulate the retail sale and distribution of cannabis and cannabis products.
The Act also establishes the following classes of licensed operators:
(1) Cultivation
- There are three classes of licensees which determine the number of cannabis plants that a licensee can grow and produce at any one time in the District:
- Class A—2,000 plants
- Class B—6,000 plants
- Class C—10,000 plants
(2) Manufacturer
- A manufacturer's license allows the licensee to process, package, and label cannabis products, purchased from a cultivation licensee, for sale and delivery to licensed distributors and retailers, or for transfer to licensed testing facilities.
(3) Distributor
- A distributor's license allows the licensee to sell and deliver cannabis and cannabis products directly to a licensed retailer, or transfer cannabis or cannabis products to a licensed testing facility.
(4) Off-Premises Retailer
- An off-premises retailer's license allows the licensee to sell cannabis products from a licensed cultivator, manufacturer, or distributor directly to retail customers for off-premise consumption, or to transfer cannabis products to a licensed testing facility.
(5) Microbusiness
- A microbusiness license allows the licensee to cultivate, manufacture, package, label, and sell cannabis and cannabis products to consumers for off-premise consumption, or to transfer cannabis or cannabis products to a licensed testing facility, and to sell cannabis and cannabis products to licensed distributors for resale to off-premises retailers.
- Except that a microbusiness licensee may not cultivate more than 300 plants at any one time.
(6) On-premises Retailer
- An on-premises retailer's license would permit on-premises consumption of cannabis and cannabis products, subject to certain restrictions, exceptions, and limitations.
(7) Testing Facility
- A testing facility license allows the licensee to test plants and manufactured products for contamination and potency. It also allows for the transportation of samples to and from another licensee.
(8) Cannabis Third Party Social Equity Delivery
- A cannabis third party social equity delivery license allows the licensee to deliver cannabis and cannabis products from a licensed microbusiness or an off-premises retailer directly to consumers at residential and commercial buildings within the District, subject to certain restrictions, exceptions, and limitations.
(9) Worker
- A person volunteering or working at a cultivation, manufacturer, distributor, microbusiness, or off-premises retailer or cannabis third party social equity deliverer is required to obtain a worker's license.
(10) Manager
- Authorizes the licensee to manage a licensed cultivator, manufacturer, distributor, microbusiness, or off-premises retailer.
SOCIAL INITIATIVES
Cannabis sales tax revenue will be reinvested into programs that benefit individuals and communities that have been historically, disproportionately harmed by the criminalization of cannabis. DC's cannabis licensing scheme supports reentry by allowing returning citizens and DC residents with criminal backgrounds to obtain a worker's or manager's license to work at cannabis businesses and allowing returning citizens and DC residents with cannabis convictions to own cannabis businesses. Licensure creates jobs and business opportunities for DC residents by requiring at least 60% of licensed employees and business owners to be local residents.
APPLICATION PROCESS & EFFECTIVE DATES
Licensing applications are not being accepted at this time. The Board is required to propose regulations setting forth specific licensing application requirements within 180 days of the effective date of the Act. The Board will provide at least 30 days' notice before accepting applications regarding the number of licenses available for each class and further information on the licensing process. The Board will also propose regulations setting forth license renewal application requirements.
***PLEASE KEEP CHECKING BACK FOR UPDATES***
Or navigate to our licensing page to find states where licensing is currently open.
APPLICATION & LICENSING FEES
The initial application fee for:
- Cultivation, manufacturer, off-premises retailer, testing facility or distributor license — $1,000
- Cannabis third party social equity delivery license — $50
- Microbusiness license — $500
The initial application fee is non-refundable and is paid at the time of application to the D.C. Treasurer. Additionally, the annual license fee for the first year is due within ten (10) business days of the Board's approval of the applicant's license.
The minimum annual license fees are set as follows:
- Cultivation—Class A $ 5,000
- Cultivation—Class B $ 7,000
- Cultivation—Class C $10,000
- Manufacturer's license $ 6,000
- Off-Premises retailer $ 6,000
- Testing facility $ 5,000
- Distributor $ 3,000
- Microbusiness $ 3,000
- Manager $130
- Worker $50
PREPARE NOW FOR YOUR UPCOMING APPLICATION
The legal cannabis industry is growing, evolving, and highly-regulated. To succeed, it is a must for businesses to obtain licenses and insurance necessary to operate legally and position themselves to expand if desired. Leaf Legal, P.C. is fully equipped to guide your company as it obtains licenses, identifies and recruits our industry's top talent, executes its business plan, and navigates DC's ever-evolving regulatory scheme. Contact the attorneys at Leaf Legal, P.C. to schedule a consultation.