Authorities in Washington, D.C., have ramped up enforcement against unlicensed marijuana retailers, shutting down 25 stores over the past six months. With new regulatory powers in place, officials aim to bring the city’s cannabis market under stricter oversight. But with the legal landscape still murky, the battle between regulators and underground sellers is far from over.
Tighter Grip on the Cannabis Market
Since early 2024, Washington’s Alcoholic Beverage and Cannabis Authority (ABCA) has been targeting unlicensed marijuana “gifting” shops—businesses that exploit legal loopholes by selling non-cannabis products and “gifting” marijuana to customers. These stores have thrived in a gray market, operating outside the city’s medical marijuana program.
Officials say the crackdown is working. In just the first two months of 2025, 38 businesses either secured licenses to sell medical marijuana legally or closed their doors. District Attorney General Brian Schwalb confirmed in a statement that 25 unlicensed shops were either shut down entirely or came into compliance with the law.
Illegal Shops Face Legal Consequences
Authorities aren’t stopping with store closures. They’ve also launched legal action against 13 additional businesses. Though officials didn’t specify which shops closed and which obtained licenses, the message is clear—operate legally or face consequences.
D.C. has struggled with cannabis regulation for years. While adult-use possession is legal, Congress has blocked the city from allowing recreational sales, creating a demand that illicit operators eagerly fill. As a result, these gifting stores have become widespread, with some openly advertising their offerings.
Officials say enforcement efforts are not just about licensing but also about public safety. Authorities found some cannabis products laced with amphetamines and psilocybin, raising health concerns.
Warnings, Raids, and the Fight to Control Illegal Sales
The ABCA’s enforcement push isn’t new. By mid-2024, officials had issued warnings to 60 illegal cannabis sellers, with 24 of them receiving formal cease-and-desist letters. Some businesses shut down voluntarily, while others ignored the warnings until authorities took action.
Regulators are now leaning on their 2024-granted powers to intensify enforcement, targeting non-compliant businesses with inspections, fines, and forced closures. While this has led to more legal dispensaries entering the market, the crackdown has also triggered criticism from advocates who argue that Congress is to blame for limiting legal access.
A Limited Legal Market Leaves Room for Illicit Sales
Despite the city’s efforts, the number of legal medical marijuana dispensaries remains small. As of January 2025, only 12 licensed MMJ dispensaries were operating in Washington, D.C.—a fraction of the demand. This shortage leaves many consumers with few legal purchasing options, fueling the unlicensed market.
Table: Legal vs. Illegal Cannabis Sales in Washington, D.C. (2025)
| Category | Legal Dispensaries | Illegal Gifting Shops (Pre-Crackdown) | Illegal Gifting Shops (Post-Crackdown) |
|---|---|---|---|
| Number of Locations | 12 | Estimated 100+ | 25 shut down, 13 facing action |
| Regulatory Oversight | ABCA & Health Dept. | None | Ongoing enforcement |
| Product Safety | Lab-tested & regulated | No guarantees | Some found laced with narcotics |
With such a small legal market, it’s unlikely that enforcement alone will eliminate unlicensed sales. Many experts argue that until Congress allows D.C. to regulate and tax recreational cannabis sales, the illicit market will continue thriving.
What’s Next for D.C.’s Cannabis Industry?
For now, authorities are signaling that unlicensed sellers will no longer be tolerated. The ABCA and local officials have made it clear they intend to bring cannabis sales fully under the medical framework—at least until federal restrictions change.
But questions remain. Will consumers shift to licensed dispensaries despite limited options? Can D.C. sustain its enforcement efforts, or will gifting stores find new ways to operate?
Until Congress lifts its restrictions, the city’s cannabis market will remain a battleground, with regulators trying to outmaneuver underground sellers while consumers navigate an uneven landscape.