The District of Columbia Alcoholic Beverage and Cannabis Board has imposed a 30-day suspension on KLM, LLC, operating as Doobie District, for dispensing medical cannabis to unqualified buyers and falsifying entries in the required tracking system. This action, detailed in Order No. 2026-211 issued February 11, 2026, stems from undercover operations revealing failures in patient verification at the U Street dispensary. The penalty underscores the board's commitment to safeguarding the integrity of D.C.'s medical cannabis program amid rising scrutiny of dispensary compliance.
Undercover Probe Uncovers Verification Failures
An investigation began on May 9, 2025, after the Alcoholic Beverage and Cannabis Administration received tips about unauthorized medical cannabis sales at 1526 U Street, NW. ABCA investigators conducted two controlled purchases, during which staff sold medical products without checking for patient registration cards or caregiver status. The products, sourced from licensed cultivators, bore labels with a Doobie District employee's name and ID number rather than the buyers', pointing to deliberate circumvention of rules.
Tracking System Manipulation and Overselling
Analysis of the METRC seed-to-sale system revealed the employee's account recorded purchases exceeding D.C.'s 8-ounce limit per patient over 30 days. Two other patient accounts showed similar overselling via the same credentials, violating 22-C DCMR § 5615.3, which mandates accurate, real-time entries. The board sustained charges under § 5709.5 for dispensing to non-qualified individuals, correcting an earlier citation error due to regulatory renumbering.
Licensee's Response and Board-Imposed Remedies
Principal owner Peter Murillo stipulated to the facts at a show cause hearing, attributing issues to terminated employees while detailing an internal probe, staff retraining, and new personal oversight of sales volumes. Despite these steps, the board held the licensee accountable for supervision lapses, opting against revocation but requiring ABCA-approved training within 60 days. Noncompliance risks reinstating the suspension; Doobie District did not respond to requests for comment.
Implications for Medical Cannabis Oversight
D.C.'s medical program relies on strict tracking to prevent diversion and ensure access for registered patients facing conditions like chronic pain or nausea. Such violations erode public trust and expose unqualified users to unverified products, potentially complicating health outcomes. The decision signals heightened enforcement, pressing dispensaries to prioritize verification amid the program's evolution alongside recreational markets.
