In The Murky World Of D.C. Marijuana Law, Pop-Up Markets Thrive

Photo Credit: Metropolitan Police Department

At the XO Lounge in downtown Washington one January night, people who paid a $10 cover charge were greeted with samples of caramel popcorn, brownies and crisped-rice treats — all infused with marijuana.

Customers could browse three floors with tables featuring all manner of cannabis: edible candies, smokable flowers, wax, oils and more. All were available only after a suitable “donation” was given for a sticker, or a football card, for which the cannabis was billed as simply an added “gift.” The top floor featured a ­full-service bar, and music thumped throughout as a steady flow of customers entered the restaurant and nightclub.

The next night, it was D.C. police and alcoholic beverage regulators who poured in. They arrested 22 of the vendors, charging them with misdemeanor drug possession with intent to distribute. Weeks later, though, D.C. prosecutors dropped charges against those defendants, raising questions about how the U.S. attorney’s office will handle such cases.

These marijuana pop-up events have emerged in the bizarre twilight zone of D.C. marijuana law, where it is legal to possess small amounts of cannabis but not legal to sell it.

The events occur nightly in the nation’s capital, advertised openly on social media. Some vendors believe they have found a workaround to the law, saying that they are selling only trinkets and that the cannabis is included. Police call it illegal drug dealing.

“It’s plainly obvious they’re negotiating for marijuana sales,” said Lt. Andy Struhar of the D.C. police narcotics unit. He said police don’t actively seek out the marijuana markets, but they do respond if they get complaints.

Police have raided such events at the Mason Inn sports bar on Wisconsin Avenue NW (where two Montgomery County educators were busted) and a restaurant on 18th Street in Adams Morgan. Officers often are accompanied by the city’s Alcoholic Beverage Regulation Administration (ABRA) when establishments with liquor licenses are involved.

How those cases play out in court — and the ramifications for the establishments — remains to be seen. In the case of the XO Lounge, defense attorney Paul Zukerberg said prosecutors dismissed charges against his client and the 21 other defendants and gave no explanation. The U.S. attorney’s office declined to ­comment.

In Zukerberg’s view, lab testing of vast amounts of edible evidence, having to examine hundreds of hours of police body-cam videos and questions over using a regulatory agency to conduct a warrantless search may add to the legal gray areas engulfing cannabis sales in the city.

In 2014, D.C. voters approved Initiative 71 in a referendum that legalized the possession of up to two ounces of marijuana for recreational use. But attempts by advocates to create a system that would regulate and tax marijuana transactions were shot down by Congress. In that void, entrepreneurs have tried to quietly supply recreational users, and medical patients who use the plant to alleviate their pain, while tiptoeing around the law.

The events occur in a variety of places: private residences, public restaurants, vacant office spaces. Even the first floor of the office building on K Street that is home to The Washington Post hosted recent cannabis events, in an empty commercial space formerly used by a nightclub. (The Post is not the building landlord, only a tenant.)

At the outset, some vendors said, police and the ABRA seemed to tolerate the pop-up markets without intervention. But recently, the number of such markets has mushroomed, complaints from neighbors and anonymous tipsters have risen, and the authorities were obliged to get involved. Struhar noted that the markets are easy to find on Google or Instagram and said that when police are notified of possible illegal activity, they ­often team up with the ABRA or the District’s business licensing agency to investigate for legal and administrative violations.

Zukerberg questioned whether that approach, pairing police and the ABRA, was a violation of the Fourth Amendment, which prohibits unreasonable search and seizure. “You can’t use a regulatory search as a pretext to search for criminal wrongdoing,” Zukerberg said.

He said prosecutors have other hurdles, saying that “each of the edibles would have to be tested individually,” creating a huge burden on the city’s crime lab, and that “the XO Lounge case also generated over 300 hours of body-cam video footage. That becomes an enormous burden on both defense counsel and the prosecution, and the courts to sift through such evidence for a misdemeanor case.”

Lisa Scott, who operates the edible cannabis company Bud Appetit in the District, said the pop-up scene was small after Initiative 71 passed. But growing interest from consumers and other entrepreneurs led to an expansion. “Consumers make the demand happen,” Scott said, “and if hundreds and thousands of people come to D.C. because of the recreational law, the city should recognize that.” Scott hopes to create a marijuana business association to help vendors pool resources to operate businesses if the District ever becomes a regulated recreational market.

One active vendor, who produces marijuana-infused edibles and spoke on the condition of anonymity because the issue could compromise their day job, noted how the growth of interest started to bring unwanted attention to the scene. “It’s so many, and five different events every night. I feel like [organizers] don’t have any control over it.” Some event organizers post their addresses with their online ads, while others require customers to message them to receive the address.

Many of the events are advertised as “I-71 compliant,” by not directly selling cannabis. “During my first pop-up,” Scott said, “I said: ‘I have the solution. We’re going to sell merchandise and then gift.’ Technically, it’s against the law as well, but I don’t think it’s enforceable because who’s to say I can’t just give you something? I guess it’s the way you do it. I sell you socks for $20, then gift you something. How is that against the law? How is that enforceable? It didn’t seem to be a problem, so we kept doing it that way.”

Before it became legal to possess up to two ounces of marijuana in the District, D.C. police made about 4,000 pot arrests per year, crime statistics show. But after Initiative 71 passed in 2014, the number of arrests plunged: to 276 in 2015, then 354 in 2016 and rising to 587 last year, ­according to the U.S. attorney’s office.

But the demand hasn’t abated, and so “even in today’s environment of MPD crackdowns,” lawyer Joshua R. Sanderlin said, “the hash bazaar market continues to thrive. Given the amount of money at stake for vendors and promoters, it’s unlikely that MPD’s increased enforcement will cause a significant change in vendor and promoter behavior.”

Sanderlin, who specializes in cannabis law, predicted that if businesses and restaurants lose licenses, vendors will simply move their events to private residences, avoiding the alcohol and business regulators.

“The vast majority of operators or potential operators want to be legal and licensed,” said Morgan Fox of the Marijuana Policy Project, “and the vast majority of consumers prefer to patronize such businesses.”

Clarifying city laws would eliminate the “gray market” of marijuana pop-ups, “removing the threat of raids and arrests for legitimate actors,” Fox said, and the District would be able to collect taxes on regulated marijuana sales.

“Certainly things could get clarified,” said Struhar, the police narcotics lieutenant, “but I don’t know where they would want to start.”

“It’s just a lot of things going on [in a marijuana pop-up] for us to address,” Struhar said, such as the different types of marijuana seized and the various kinds of business licenses involved. He also said police are concerned about the security of the events, which have large amounts of cash as well as marijuana.

But the impact of city enforcement on the cannabis events is starting to show. On three occasions last year, police and alcohol regulators visited the Vita Restaurant and Lounge on Ninth Street in Northwest Washington and found marijuana events in progress, records provided to The Post show. The city’s consumer regulatory affairs department moved to revoke Vita’s business license, and Vita’s owners then dissolved their corporation, department spokesman Tim Wilson said.

Later this month, advocates of legalization said they are planning a pop-up to make a point.

On Tuesday, the D.C. Cannabis Business Association and the group DCMJ said they will host a market in front of the District’s city hall. The demonstration, Scott said, is aimed to “make the point that [advocates] would rather be able to legally sell cannabis and pay taxes than the current system of ‘pop-ups.’ ”