 When my son was in his junior year, he'd always expressed that he wanted to go to college, so I started touring colleges with him and seeing how expensive it was. And as a single mom, you know, I don't have a lot of options. A friend of mine said, you know, Diana, I have this store, I have a smoke shop, I need somebody to come help me put it together. So I said, sure, I'll come work for you part time. Within like a month, he changed his mind. He said, I want to sell the store. And I was like, well, you can't sell the store because I'm working here and I don't want to work for someone else. So can we talk about maybe possibly me buying the store? I emptied up my savings account. I received a small loan from my parents. You know, and customers would come in and they would always ask, do you guys give cannabis here? Do you have, you know, what do you have? Do you have any edibles? This, that. So I started to educate myself on what this beautiful plant did and Lit City was born. Based here in the Columbia Heights neighborhood of Washington, DC, Lit City is part of the district's thriving gifting industry. Nine years ago, the city passed initiative 71, making it legal to possess up to two ounces of marijuana for personal use. The law also created a loophole allowing stores to gift their customers small amounts of weed, as long as they also buy another item, often at an exorbitant price, such as an 11 word motivational speech for $60 or a $95 Spiderman sticker. We came up with a banging recipe for brownies. We named the brownies Ants College Fund Brownies. So you leave a donation, you take the brownie, and it became such a hit, because I was like, this is my son's college fund brownies, and this is what's going to put my son through college. Four years later, my son did graduate from Clark University and was the Massachusetts. Any store can get into the business of gifting weed, no license required, making DC home to one of the most vibrant cannabis markets in the country. Gifting shops also happen to be majority of black and Latino owned. Since Congress has authority over DC's local affairs, gifting is a way for this city to circumvent a federal rule that prevents it from legalizing the sale of recreational weed, as 21 states have done since 2012. Ironically, this system functions better than most regulated cannabis markets because, other than the gifting gimmick, weed is treated pretty much like any other good that consumers can just walk into a store and buy. Meanwhile, in states like California, recreational marijuana is so heavily regulated that sellers are struggling to turn a profit. And many consumers would rather buy in the black market because prices are so high. So what's the DC government doing with this successful model for recreational weed? Trying to shut it down. I'm Terrence Wright, owner-operator of Mako DC. I also serve as the chairman of the I-71 committee. We're a group of business owners who want to see the district do things right, from a compliant standpoint, from a safety standpoint, and from a product standpoint. Early 2000s, 2002, I started working for myself in the real estate field. 2008, I was indicted on a federal charge. I played guilty to male fraud, abiding in the bed. As I spent my 19 months, I became friends with other guys who played guilty or had cannabis charges. So it gave me motivation to actually be in the space because of the fact that black and brown people, basically it's okay for us to go to prison, but it's not okay to be business owners. And when I saw the opportunity here in DC, I went for it. Medical cannabis is legal in DC, but up until recently, the district had an onerous regulatory system that capped the number of dispensaries that were allowed to open. Purveyors also had to pay an $8,000 application fee, which had to be renewed annually at a cost of $16,000. Gifting shops make buying recreational weed so easy and convenient that dispensaries barely had any customers anyway. So the relationship with the police was always good from the start. What happened, unfortunately, was that a shop opened up next to mine. They didn't have their stuff in order. They weren't, I'm assuming, paying taxes. I pay taxes. I pay employee taxes. I have a business license, a certificate of occupancy. So this other business, because they got rated, I was also kind of caught in the crossfire as well. So here you just have to be 21 years old. Everything is done in a discrete manner and they leave and they're happy and they don't have to, you know, announce to the world what they're doing because, you know, it's a personal choice. I have been rated by the police three times. However, I was never prosecuted or reigned or any of that. So I was able to conduct business, you know, open up my shop like the next day or two days later. The U.S. Attorney's Office for the District of Columbia has declined to prosecute almost everyone arrested at gifting shops. But a new bill signed by the mayor in January will impose $10,000 fines on any store found gifting and $20,000 if they do it again. These stores can also have their business licenses revoked. The bill will also empower DC to find commercial landlords who rent space to gifting shops. Greg Wimsat and Damien West are the co-owners of Mr. Nice Guys, a gifting shop with four locations in DC. Their stores have been rated six times and they've been arrested and released without charges three times. The trouble often starts with a burglary attempt. The reason why we have bars on these windows, we've actually had it where we get robbed, our security system calls the police. Not only we have broken our store front, we have to deal with the police. Instead of helping us, they agonize us. They'll get a search warrant and take everything. And I'm just coming down here to secure a location. So I opened the door. It was already a cop inside. They dragged me in, tell him, you know, beat it and locked me up. They came in early one morning and they took all of the days worth of merchandise. They took all my CBD products, which was very disheartening because CBD is very expensive. They took cannabis, destroyed the door. Obviously they had to come in. I wasn't going to go ask for my stuff back. I mean, I understood what was going on and I also understood that I am doing business in a gray area. So it was like, you know, just know my place. They, oh, we're preventing a gray market business or you're a gray market business. I'm like, technically every marijuana entity in the United States is a gray market business because it's federally illegal. You have to do all these little, play these little games with them to be able to operate business. So the police say it's a gray market business, but I'm just as much as a gray market business as the medical business that has a license. If the gifting shops get shut down, will DC residents still be able to get their weed legally or will they go back to buying on the black market? Although the mayor's recently passed law will lift the cap on the number of dispensaries allowed in the district to obtain a medical license, store owners will still face significant red tape. For one thing, applicants will have to prove to the newly created alcoholic beverage and cannabis administration that there's enough consumer demand for marijuana in a particular neighborhood before they can open their doors. The bill also grants the agency the discretion to reinstate a cap after one year. Gifting shops may apply for one of the new licenses, but doing so means taking a big risk. According to the new bill, if their applications are denied, they'll be ordered to shut down within 30 days. Medical dispensaries work really hard to ensure that we are shut down. Grace Reader is the former executive director of the I-71 committee. She says that many DC area residents would never consider patronizing a dispensary. Essentially, they claim the reason they're not doing well is because of these gifting stores. Instead of addressing the root causes of the issue, which is a city like DC with so many federal employees, don't want to register for a government database that says they need medical cannabis, especially when it impacts a security clearance or other things. Unlike gifting shops, anyone who wants to buy from a medical dispensary has to register in a government database, which could create problems for the DC area's 200,000 federal employees. That's really where the gifting stores come in is, you know, there's a lot of people who don't want to say, I use medical cannabis. Federal law technically prohibits medical marijuana users from buying a gun or living in federally assisted public housing. Though, since the passage of I-71, the DC Housing Authority hasn't evicted anyone on these grounds. I fight back for those who don't have a voice. A lot of returning citizens feel like we don't have a voice. Seventy-some percent, the same numbers that reflect from 2014 are in favor of us staying open. So why would you rate us? The fact that council continues to try to write legislation to shut our doors or to enforce is crazy. Imagine that Georgetown student who indulges in cannabis, now she has to go to the 7-11 or a street dealer and she doesn't know what she's getting. Those are the things that I fear. This is the reason I try to keep our doors open. There's a danger that DC will become more like California, where the illicit market for weed is now twice as large as the legal one. Licensing regimes can also be discriminatory, whether intentionally or not. Washington state has granted 558 recreational cannabis licenses and 4% went to black applicants. And when people come into the I-71 stores and they get whether it's Monco or Lit City or whomever, they get their experience. They get what they pay for and that's what you want. You want people to say, hey man, this is dope. This is hot. I feel the energy and when people leave reviews, they talk about the customer service, but they talk about the experience. That gifting experience was great and I think as a whole and as I continue to advocate, that's things I advocate for. Let's take the stigma and stench. It doesn't have to be sterile because it's the culture, it's the earth, it's the apparel, it's music. It's the culture of cannabis. The last thing I want is to close my doors. You know, I don't want to have to submit an application and wait to see what happens and are they going to approve me? You know, and if I do get approved, what does that mean for my store, for my customers? Does that mean that I'm going to have to take people with a medical license to come in here? You know, I have employees that have families to feed. You know, I have to pay rent. I don't want to have to go through all of that. I want to be able to still serve the entire community as I've been serving them till now.