The End of a Weed Paradise

Diana Alvarez’s son always wanted to go to college. After seeing how expensive it was to send him to college, she started working in a smoke shop to support her family. A month later, she bought the store and began offering cannabis to her clients to help pay for her son’s tuition. The Lit City Smoke Shop was then born.

Based in the Columbia Heights neighborhood of Washington, D.C., 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.

“Four years later, my son did graduate from Clark University in Worcester, Massachusetts,” Diana happily points out.

Any store can get into the business of gifting weed—no license required— making D.C. home to one of the most vibrant cannabis markets in the country. Gifting shops also happen to be majority black- and Latino-owned.

Since Congress has authority over D.C.’s local affairs, gifting is a way for the 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 on the black market because prices are so high.

So w