Marijuana is fueling the future of retail in D.C., but it’s going to take time

From inflatables to shock tattoos, hashish to weed, Washingtonians are wild when it comes to bringing fun to the Cannabis Festival. The opening of the festival Tuesday at the National Mall was anything but…

Marijuana is fueling the future of retail in D.C., but it’s going to take time

From inflatables to shock tattoos, hashish to weed, Washingtonians are wild when it comes to bringing fun to the Cannabis Festival.

The opening of the festival Tuesday at the National Mall was anything but somber: live bands, geocaches, and more than a dozen vendors meant to keep revelers up and happy. But the festival itself is a small moment in a broader story of how marijuana is helping to transform D.C.’s local retail environment — and at the same time, it’s still a long way from being legalized.

That reality starts at the local level, where it’s easier to get a state license and dispensaries are relatively new.

A closer look shows that many of the 29 retail licenses issued by the city will remain empty for many years, meaning that the usual array of security cameras and retail perks could stay put, at least for the time being. The Food and Drug Administration is still drawing up rules for the recreational market, while the District government is setting its rules for medical dispensaries.

“Not everybody thinks this is what they’re going to do,” said Mark Tucker, who oversees medical marijuana dispensary operations for Green Prowl. “It’s going to take time to get after it, learn how to do it, find business partners.”

Prestige Herbal, which was gearing up to open its first location in West Baltimore this week, was seeking a national distributor before it was shut down by the city for selling medical marijuana, says CEO Clay Paz. Its investors had scrambled to find a distributor before city officials shut down the business, and its three-year plan to get eight locations on the ground is on hold, Paz said.

And, as was the case with Haumea Cultivation and Dispensary, a landlord didn’t want a dispensary in his building when dispensary owners proposed it.

“They’re doing this all in the fashion of how everybody’s survived for the last 80 or 90 years,” he said. “People said, ‘Hey, we’ve got all the money in the world and we’re just sitting on it and let the federal government take it from us. We’re not going to do anything to lose that.’”

His dispensary remains one of the smaller operators. Marijuana companies frequently take advantage of a tax loophole that gives them legal precedence over other developers, said Mark Lippitt, a local nonprofit licensing attorney.

“So the neighborhood can’t go against your legal business partner,” he said.

The two industry giants, established operators Hudson Industries and Bloom Remedies, did get a distributor and facility, respectively, in Maryland. They do so mostly for legal reasons — regulations changed in July so that they could not legally sell marijuana in Maryland while their D.C. licenses were pending — but also to establish a national brand for medical marijuana.

Each year, at least some of the operators with new licenses are about to close, according to a medical marijuana industry tax consultant.

“The capital required for it is pretty substantial,” said Troy Scott, who advises operators. “Maybe I don’t have the slightest clue when dispensaries are going to close. It’s hard to say.”

Over half of the cultivators have closed, licensed entities have closed as many as seven licenses, while regulatory service providers and affiliates have closed as many as 14, according to Martin Huggins, a regulatory service provider.

Geoff Everts, the owner of Haumea Cannabis, said he expected to hire 30 people this year to staff the dispensary. He blamed the waits for licenses on the slow implementation of federal policies that conflict with state marijuana laws.

“Everything has been nameless and faceless,” he said. “It’s very difficult to recruit a staff until they know when they’re going to open.”

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