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DC Council Pursues Legalization of Marijuana

  • Jan 12, 2015 | Gail Cole

 DC: A 2010 show of support for legalization.

Four District of Columbia Council members have introduced The Marijuana Legalization and Regulation Act of 2015, which seeks to “legalize the possession, consumption, display, purchasing, or transporting of marijuana and marijuana-infused products for personal use, not in public, for persons over the age of 21.”

Councilmember David Grosso, who co-sponsored the Act, shared the news on twitter, where he succinctly summed up the history of the legalization movement with the following announcements:

  • “The Marijuana Legalization and Regulation Act of 2015 is a logical next step in our criminal justice reform efforts to end the War on Drugs.
  • The Council took an important step last year to decriminalize possession of small amounts of marijuana.
  • The DC voters showed their desire to stop locking people up for non-violent marijuana possession & use by passing Initiative 71.
  • … It’s time to tax & regulate pot.
  • And no, we won’t let Congress stand in our way….”


District voters overwhelming approved Initiative 71 on November 4, 2014. Then, in December, Congress added a special provision to the spending bill that “prohibits both federal and local funds from being used to implement a referendum legalizing recreational marijuana use in the District.” That provision makes it challenging for DC to implement Initiative 71--although Grosso’s tweet suggests the District will move forward with implementation anyway.

The Marijuana Legalization and Regulation Act of 2015 would:

  • Establish a dedicated marijuana fund of all retail marijuana sales and excise tax revenue.
  • Direct all retail marijuana license fees, penalties, forfeitures, and all other monies, income, or revenue… from retail-marijuana-related activities.
  • Establish a tax on the gross receipts of retail marijuana sales and on the first sale or transfer of unprocessed retail marijuana in the District of Columbia.

Fiscal impact of recreational marijuana

  • The rate of tax would be 10% of the gross receipts from the sale of, or charges for, retail marijuana or retail marijuana products. (p 31ff)
  • In addition to the District sales tax, there would be a “tax on the first sale or transfer of unprocessed retail marijuana by a retail marijuana cultivation facility, at the rate of 15% of the average market rate of unprocessed retail marijuana.”

The first $350,000 will fund the “Youth Court of the District of Columbia to operate a unique pre-petition diversion program for first-time, non-violent juvenile offenders.”

The next $500,000 will be distributed to the DC Department of Behavioral Health for programs directed toward preventing substance use, abuse and dependence among middle school and high school age students.

Additional information is available in the text of the Act.

Sales tax laws have to adapt to new products—and newly legalized products. Automated sales tax software as a service (SaaS) helps businesses in all states respond to those changes.

photo credit: Travis S. via photopin cc

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.