After weeks of pushback from operators and advocates, a proposed 70% tax increase on D.C.’s medical cannabis industry has reportedly been removed from the budget package the Council is expected to vote on today.

Just days after business owners warned that a proposed cannabis tax increase could further destabilize Washington, D.C.’s struggling regulated market, industry advocates are claiming a significant victory.

According to multiple industry sources, a proposal to increase the District’s medical cannabis sales tax has been removed from the final budget package that the D.C. Council is scheduled to vote on June 9. The reported change follows an intensive lobbying effort by cannabis operators, trade groups, and advocates who spent Monday meeting directly with councilmembers and staff to explain how the increase could impact businesses already facing significant financial pressure.

Mayor Muriel Bowser’s budget proposal sought to raise the tax on medical cannabis sales from 6% to approximately 10.25%, a more than 70% increase that operators argued would drive consumers back to the illicit market while squeezing already thin margins. The administration projected the tax hike would generate additional revenue as the District works to address a substantial budget shortfall.

The proposal sparked widespread opposition throughout the cannabis industry. Dispensary owners, cultivators, and ancillary businesses warned that the regulated market remains fragile despite recent expansion efforts. Many operators pointed to ongoing competition from Maryland’s adult-use market, high operating costs, and continued pressure from unlicensed sellers as reasons the industry could not absorb another significant tax burden.

On Monday, industry representatives organized a lobbying day at the Wilson Building, holding meetings with multiple council offices ahead of the final budget vote. Participants said they emphasized that medical cannabis businesses are still working to establish sustainable operations following the District’s recent market transition and warned that higher taxes could undermine efforts to bring consumers into the regulated system.

While the Council had not yet cast its final vote as of publication, multiple sources familiar with budget negotiations said the cannabis tax increase was no longer included in the package expected to move forward.

If confirmed, the decision would mark a notable win for D.C.’s cannabis industry, which has increasingly turned to direct advocacy as policymakers debate how to balance the District’s budget while supporting emerging regulated markets.

The Council’s vote on the budget is expected later Tuesday. Industry stakeholders will be watching closely to confirm whether the tax proposal remains off the table.

For now, operators say the outcome demonstrates that lawmakers heard the industry’s concerns and recognized the potential consequences of raising taxes on a market that many believe is still finding its footing.