While April 15 is Tax Day, this year it’s also the start of an extended tax break for medical marijuana users who shop at dispensaries in DC.
On April 2, 2024, the Council of the District of Columbia passed the Medical Cannabis Patient Card Extension and 4/20 Medical Cannabis Sales Tax Holiday Week Emergency Amendment Act of 2024. The act increased the valid period of patient and caregiver registration identification cards from two to six years. The legislation also added four more days to the medical cannabis tax holiday that first went into effect in 2023; during this period, sales taxes are temporarily eliminated for medical cannabis users at registered medical marijuana dispensaries. This year’s tax exemption lasts two full weeks, through April 28.
It’s welcome news to many dispensary owners and cannabis professionals in the area, including Bethany Frick, the CEO of District Cannabis, a cultivator opening a flagship store in Union Market on April 17. Frick believes the tax-free holiday will help drive more patients into the legal market.
“We believe cannabis should always be tax free,” Frick says. “Many patients rely on cannabis for help with pain, anxiety, sleep, among other ailments. In other states, such as Maryland, medical patients do not pay a sales tax.”
Along with Maryland, other states—including New Jersey, Delaware, Massachusetts, and Connecticut—do not apply sales tax to medical cannabis sales, according to the Marijuana Policy Project. Meanwhile, other states have higher taxes than in DC. California, for example, imposes a 15 percent retail excise tax on medical cannabis sales, more than double the 6 percent medical cannabis sales tax rate in DC. That 6 percent tax means that in DC, an ounce of, say, Acapulco Gold, priced at $300, would come to $318 with tax.
Sales at licensed DC retailers have been shown to increase statistically during the month of April because of the sales tax holiday, according to Jared Powell, the chief of staff for the Alcoholic Beverage and Cannabis Administration.
“The sales tax holiday attracts DC resident and non-DC resident patients to licensed retailers,” Powell says. “The latter can purchase medical cannabis products by registering for non-DC resident patient registration with a valid period of up to 365 days or through our state reciprocity program.”
Cannabis hasn’t been immune from the effects of inflation. The U.S. Cannabis Spot Index increased from $1,005 a pound on April 7, 2023 to $1,020 a pound on April 5, 2024.
On top of the tax holiday, some local dispensaries may offer specials on April 20, an unofficial high holiday for weed. “4/20 is a great time to check out your local cannabis dispensary,” says Hannah Clarke, executive director of the I-71 Committee, a nonprofit dedicated to socially conscious cannabis legislation. “Each dispensary has a creative way of celebrating the holiday and the tax break is a great way for consumers to save at the counter.”
