How Entrepreneurs in D.C. Are Using a Loophole to Move Marijuana

By A. Hutchinson
Meet "High Speed" and "Kush Gods", two Washington D.C. startups that operate within the legally grey realm to make big cash off cannabis.

 

It’s 4/20 and watching a delivery with “High Speed”, Washington D.C.’s premier fresh-pressed juice and cannabis company.

 

“I’m gonna need to see your license if you could grab it, please.”

 

The middle-aged man who just walked out of a yoga studio to pick up his holiday goods looks perplexed, but Raheem, the delivery driver, insists. According to the District’s recreational cannabis laws, only those 21 years and older can legally receive a gift of cannabis, so it’s not until after the man walks back inside and returns with his driver's license that we can give him the $55 bottled apple-cucumber juice he paid for online, and the free bag of weed that comes with it. This is what canna-business looks like in DC.

 

Washington D.C. is not a state. That may seem like common sense for anyone who’s passed grade school geography, but it’s important to remember when diving into the District’s cannabis community. While voters in Colorado, Oregon, and the like were able to pass legal weed legislation and jump right into a regulated market, D.C. is instead subject to the will of Congress’s federal budget — and the counterproductive, city-specific riders that come with it.

 

Since D.C. voters passed Initiative 71 to legalize adult use, possession, and the personal cultivation of cannabis in 2014, Congress has passed budget add-ons, or “riders,” each year to block the District from spending money to craft retail cannabis regulations or “enact any law, rule, or regulation to legalize or otherwise reduce penalties associated with the possession, use, or distribution of any Schedule I substance under the Controlled Substances Act.”

 

Without retail stores, D.C. residents and tourists are forced to grow their own cannabis, rely on the kindness of others, or find one of Washington’s “gift economy” providers — companies willing to serve marijuana as a gift in exchange for donations, delivery, and packaging fees, or alongside legally taxed (although highly-priced) non-cannabis items. This is exactly the legal grey area in which High Speed does business.

 

In Massachusetts and Maine, gift economies have sprung up while state lawmakers bicker over regulations and retail start dates. In fully regulated states like Oregon and Colorado, the same structure can be found on Craigslist, where unlicensed dealers push buds for donation as a way to skirt local laws. 

 

In the District of Columbia, though, the gift economy has become an industry. By crafting businesses around the rules of Initiative 71, D.C. cannabis companies have been able to forego the expensive regulatory roadblocks found in other states, while testing the boundaries of local law enforcement and their own ability to adapt. 

 

So as venture capitalists and big tobacco make their way into the West Coast’s exploding cannabis industry, independent entrepreneurs willing to risk a little and gain a lot are making a name for themselves in D.C.. But with a Republican-controlled federal government willing to upend popular policies right at their doorstep and no change in sight for D.C.’s local regulations, will these companies be locked up, forced out, and made to pursue the cannabis green rush in a state with full regulations, or will they be able to keep thriving in Washington’s legally-grey loophole?

 

“There was nobody branding donation-based cannabis in D.C. before us, but since then it’s blown up,” said Nicholas Cunningham, one of D.C.’s most seasoned gift economy vets. In 2015 Cunningham decided that Initiative 71, and the loophole it opened, were ripe for the taking. He had saved up money working in L.A.’s medical marijuana industry, and without the pricey regulatory costs found in established markets, the then 31-year-old entrepreneur jumped into the East Coast’s green rush head first. “I think when the police did what they did to me, they thought that people would be too afraid to try it themselves — but I think it motivated more people to start their own gift economy businesses.”

 

So Cunningham ditched his life in the Southland, drove east, and started Kush Gods, a donation-based cannabis company putting their brand (and bud) front and center. With a fleet of vinyl-wrapped luxury vehicles emblazoned with the Kush Gods logo and imagery of dank nugs, Cunningham and his team started driving around the city, offering infused edibles in exchange for donations. On any given Friday night in the summer of 2016, it was common to see the Kush Gods’ Mercedes parked on U Street — the main drag uniting several of Northwest D.C.’s hippest neighborhoods — hawking magic brownies in exchange for a $10 donation on the spot.

 

High Speed launched in the District in January 2016, and the company immediately parlayed itself into D.C.’s cannabis community, while also capitalizing on the nation’s widespread fresh-pressed juice trend. High Speed and team crafted a website where gifts of cannabis — or “Love,” as High Speed calls it — can be added to juice orders. And while gift weights aren’t specified online, juices with added “Love” translates to about an eighth of flower, while juices with “Lots of Love” come with decidedly larger gifts.

 

All payments are made online so there’s no cash transaction at the delivery drop off, and the slick, branded bags that conceal the cannabis gift make High Speed feel like just another app-based delivery company — a GrubHub or Seamless, but with a much smaller menu. The company sends out a weekly newsletter with strain selections, info about local community events and an inspirational quote like, “Nothing will bring you peace, you must bring yourself to it.” It’s not hard to tell that High Speed’s Bay Area influences stretch down to Silicon Valley.

 

So while the Kush Gods have no qualms with putting cannabis front and center, High Speed takes a more low-key approach, putting the juices on display and letting the cannabis play the background. Like Cunningham and Kush Gods though, it didn’t take long for the media to latch onto High Speed’s unique form of branding.

 

As more states push to legalize cannabis in the coming years, delayed regulations will no doubt create similar gift economies around the country as a new set of risk-taking entrepreneurs try and stake out their own corner of America’s multi-billion dollar cannabis industry.

 

In Washington D.C., the gift economy businesses have become the city’s most active cannabis providers, and unless a large-scale crackdown occurs, or by some miracle Congress rescinds their moratorium on regulated retail shops, companies like the Kush Gods and High Speed see no need to change their business model. If anything, they will continue to serve the growing market and push the limits of the country’s burgeoning legal weed landscape.

 

“We’ll be in D.C. until they completely shut everything down,” Cunningham said of the Kush Gods’ future. “We’re sticking around.”

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About the author: A. Hutchinson

Hutchinson is a qualified researcher and writer who is a fan of politics, history and counter-culture.