At the XO Lounge in downtown Washington one January night, people who paid a $10 cover charge were greeted with samples of caramel popcorn, brownies and crisped-rice treats – all infused with marijuana.

Customers could browse three floors with tables featuring all manner of cannabis: edible candies, smokable flower, wax, oils and more. All were available only after a suitable “donation” was given for a sticker, or a football card, for which the cannabis was billed as simply an added “gift”. The top floor featured a full-service bar, and music thumped throughout as a steady flow of customers entered the restaurant and nightclub.

The next night, it was DC police and alcoholic beverage regulators who poured in. They arrested 22 of the vendors, charging them with misdemeanour drug possession with intent to distribute.

Weeks later, though, DC prosecutors dropped charges against those defendants, raising questions about how the US attorney’s office ultimately will handle such cases.

These marijuana pop-up events have emerged in the bizarre twilight zone of DC marijuana law, where it is legal to possess small amounts of cannabis – but it is not legal to sell it. The events occur nightly in the nation’s capital, advertised openly on social media.

Some vendors believe they have found a workaround to the law, saying that they are only selling trinkets and that the cannabis is included. Police call it illegal drug dealing.

Lisa Scott, who operates the edible cannabis company Bud Appetit in the District, says the pop-up scene was small after I-71 passed (Washington Post)

“It’s plainly obvious they’re negotiating for marijuana sales,” says Lt Andy Struhar of the DC police narcotics unit. He says police don’t actively seek out the marijuana markets, but they do respond if they get complaints.

Police have raided such events at the Mason Inn sports bar (where two Montgomery County educators were busted) and a restaurant in the Adams Morgan neighbourhood. Officers often are accompanied by the city’s Alcoholic Beverage Regulation Administration (ABRA) when establishments with liquor licenses are involved.

How those cases play out in court – and the ramifications for the establishments – remains to be seen. In the case of the XO Lounge, defence attorney Paul Zukerberg says prosecutors dismissed charges against his client and the 21 other defendants, and gave no explanation. The US attorney’s office declined to comment.

In Zukerberg’s view, lab testing of vast amounts of edible evidence, having to examine hundreds of hours of police bodycam videos and questions over using a regulatory agency to conduct a warrantless search may add to the legal grey areas engulfing cannabis sales in the city.

In 2014, DC voters approved “Initiative 71,” a referendum that legalised the possession of up to two ounces of marijuana for recreational use. But attempts by advocates to create a system that would regulate and tax marijuana transactions were shot down by Congress.

Into that void, various entrepreneurs have tried to quietly supply recreational users, and medical patients who use the plant to alleviate their pain, while tiptoeing around the law.

The events occur in a variety of places: Private residences, public restaurants, vacant office spaces. Even the first floor of the office building on K Street that is home to The Washington Post hosted recent cannabis events, in an empty commercial space formerly used by a nightclub. (The Post is not the building landlord, only a tenant.)

At the outset, some vendors say, police and the ABRA seemed to tolerate the pop-up markets without intervention. But recently, the number of such markets has mushroomed, complaints from neighbours and anonymous tipsters have risen, and the authorities were obliged to get involved.

Struhar noted that the markets are easy to find on Google or Instagram, and says that when police are notified of possible illegal activity, they often team up with the ABRA or the District’s business licensing agency to investigate both for legal and administrative violations.

Customers at XO Lounge could browse three floors with tables of edible candies, smokable flower, wax, oils and more (Bloomberg via Getty) (Bloomberg via Getty Images)

Zukerberg questioned whether that approach, pairing police and the ABRA, was a violation of the Fourth Amendment, which prohibits unreasonable search and seizure. “You can’t use a regulatory search as a pretext to search for criminal wrongdoing,” Zukerberg says.

He says prosecutors have other hurdles, saying that “each of the edibles would have to be tested individually,” creating a huge burden on the city’s crime lab, and that “the XO Lounge case also generated over 300 hours of body-cam video footage. That becomes an enormous burden on both defense counsel and the prosecution, and the courts to sift through such evidence for a misdemeanour case.”

Lisa Scott, who operates the edible cannabis company Bud Appetit in the District, says the pop-up scene was small after Initiative 71 passed. But growing interest from consumers and other entrepreneurs led to an expansion.

First legal cannabis sales in Washington Show all 10 1 /10 First legal cannabis sales in Washington First legal cannabis sales in Washington Washington's cannabis stores Kevin Nelson, of Bellingham, Wash., holds a sign that reads "Drug War Ends Here," outside Top Shelf Cannabis, Tuesday, July 8, 2014, in Bellingham, Wash. on the first day of legal pot sales in the state. Nelson says he is a long-time activist opposing drug laws, particularly those targeting marijuana users, and he he feels the legalization of marijuana will lead to less crowded jails and be less of a burden on the court system. AP Photo/Ted S. Warren First legal cannabis sales in Washington Washington's cannabis stores A pamphlet titled "Marijuana Use in Washington State," is displayed at the Cannabis City recreational marijuana shop in Seattle. The store will be the first and only store in Seattle to initially sell recreational marijuana when legal sales begin on Tuesday, 8 July, 2014. AP Photo/Ted S. Warren First legal cannabis sales in Washington Washington's cannabis stores Customers shop for marijuana at Top Shelf Cannabis, a retail marijuana store. Top Shelf Cannabis was the first retail marijuana store to open today in Washington state, nearly a year and a half after the state's voters chose to legalize marijuana. David Ryder/Getty Images First legal cannabis sales in Washington Washington's cannabis stores Cale Holdsworth, in town from Kansas to visit family, celebrates after purchasing two grams of marijuana strain "OG's Pearl" for $26.50 at Top Shelf Cannabis, a retail marijuana store David Ryder/Getty Images First legal cannabis sales in Washington Washington's cannabis stores A sign noting the Washington state law that prohibits opening packages that contain marijuana or marijuana-infused products in public rests on a glass case displaying bongs for sale at the recreational marijuana store Cannabis City AP Photo/Ted S. Warren First legal cannabis sales in Washington Washington's cannabis stores Brian Travino, a student at Western Washington University wears a Washington state flag, as he waits with other customers to purchase recreational marijuana at Top Shelf Cannabis in Bellingham, Wash., in the first half-hour of legal sales in the state. AP Photo/Ted S. Warren First legal cannabis sales in Washington Washington's cannabis stores Amber McGowan, left, and Krystal Klacsan, right, work at the recreational marijuana store Cannabis City in Seattle to apply a state-mandated frosted film to the front of a display case that will contain pot varieties when legal sales begin on Tuesday, July 8, 2014. The store will be the first and only store in Seattle to initially sell recreational marijuana on Tuesday. AP Photo/Ted S. Warren First legal cannabis sales in Washington Washington's cannabis stores A customer, who declined to give his name, sniffs a strain of recreational marijuana at Top Shelf Cannabis, Tuesday, July 8, 2014, in Bellingham, Wash., during the first half-hour of legal sales in the states. Customers cannot be given samples, but are allowed to use "sniff jars" to help make their purchasing decisions. AP Photo/Ted S. Warren First legal cannabis sales in Washington Washington's cannabis stores Julian Rodriguez, right, of Everson, Wash., holds his two-gram packet of recreational marijuana outside Top Shelf Cannabis, Tuesday, July 8, 2014, in Bellingham, Wash., on the first day of legal sales. At left is Tom Beckley, the owner of the store. AP Photo/Ted S. Warren First legal cannabis sales in Washington Washington's cannabis stores The price of two grams of a strain of marijuana named "Sweet Lafayette," is displayed at Top Shelf Cannabis, Tuesday, July 8, 2014, in Bellingham, Wash., on the first day of legal sales of recreational marijuana in the state AP Photo/Ted S. Warren

“Consumers make the demand happen,” Scott says, “and if hundreds and thousands of people come to DC because of the recreational law, the city should recognise that.”

Scott hopes to create a marijuana business association to help vendors pool resources to become legitimate businesses, if the District ever becomes a regulated recreational market.

One active vendor, who produces marijuana-infused edibles and who wished to remain anonymous because the issue could compromise her day job, noted how the growth of interest started to bring unwanted attention to the scene.

“It’s so many, and five different events every night. I feel like [organisers] don’t have any control over it.” Some event organisers post their addresses with their online ads, while others require customers to message them to receive the address.

Many of the events are advertised as “I-71 compliant,” by not directly selling cannabis. “During my first pop-up,” Scott says, “I say: ‘I have the solution. We’re going to sell merchandise and then gift.’ Technically, it’s against the law as well, but I don’t think it’s enforceable because who’s to say I can’t just give you something?

“I guess it’s the way you do it. I sell you socks for $20, then gift you something. How is that against the law? How is that enforceable? It didn’t seem to be a problem, so we kept doing it that way.”

Before it became legal to possess up to two ounces of marijuana in the District, DC police made about 4,000 pot arrests per year, crime statistics show. But after Initiative 71 passed in 2014, the number of arrests plunged to 276 in 2015, then 354 in 2016 and rising to 587 last year, according to the US attorney’s office.

Samples of cannabis seized by DC police during a raid on the XO Lounge (Metropolitan Police Department)

But the demand hasn’t abated, and so “even in today’s environment of MPD crackdowns,” attorney Joshua R Sanderlin says, “the hash bazaar market continues to thrive.

“Given the amount of money at stake for vendors and promoters, it’s unlikely that MPD’s increased enforcement will cause a significant change in vendor and promoter behaviour.”

Sanderlin, who specialises in cannabis law, predicted that if businesses and restaurants lose licenses, vendors will simply move their events to private residences, avoiding the alcohol and business regulators.

“The vast majority of operators or potential operators want to be legal and licensed,” says Morgan Fox of the Marijuana Policy Project, “and the vast majority of consumers prefer to patronise such businesses.”

Clarifying city laws would eliminate the “grey market” of marijuana pop-ups, “removing the threat of raids and arrests for legitimate actors,” Fox says, and the District would be able to collect taxes on regulated marijuana sales.

“Certainly things could get clarified,” says Struhar, the police narcotics lieutenant, “but I don’t know where they would want to start.”

“It’s just a lot of things going on [in a marijuana pop-up] for us to address,” Struhar says, such as the different types of marijuana seized and the various kinds of business licenses involved. He also says police are concerned about the security of the events, which have large amounts of cash as well as marijuana.

But the impact of city enforcement on the cannabis events is starting to show. On three occasions last year, police and alcohol regulators visited the Vita Restaurant and Lounge in North-west Washington and found marijuana events in progress, records provided to The Post show.

The city’s consumer regulatory affairs department moved to revoke Vita’s business license, and Vita’s owners then dissolved their corporation, department spokesman Tim Wilson says.

Later this month, advocates of legalisation say, they are planning a pop-up to make a point.

On Tuesday, the DC Cannabis Business Association and the group DCMJ say they will host a market in front of the District’s city hall. The demonstration, Scott says, is aimed to “make the point that [advocates] rather be able to legally sell cannabis and pay taxes than the current system of ‘pop-ups’. ”