Why Should Delaware Care?
Delaware is setting up its first legal recreational marijuana sales market, which will offer dozens of potentially lucrative production, processing and sales licenses. The public has the opportunity to help write the regulations that will monitor the market and establish who gets the licenses.
How To Get Involved
The draft regulations will be be published here. The public is encouraged to review the proposed language and offer feedback using the button below.
Adults looking to legally purchase marijuana for recreational use will have to wait a few months longer than first thought, as the underlying regulations and licensing needed for the system have been delayed until at least March 2025, officials reported.
The Office of the Marijuana Commissioner, a new state agency under the Delaware Department of Homeland Security that is overseeing the recreational sales industry, has begun publishing its first draft portions of the state code that will regulate the system. The OMC is tentatively targeting publication of its final regulations by July 11 and opening license applications by Sept. 1. As of now, that timeline would allow retail sales licenses to be issued by March 1, 2025.
Approved last year under House Bill 2 despite the objections of Gov. John Carney, Delaware will join neighboring states of New Jersey and Maryland in allowing recreational marijuana sales after only allowing medical marijuana sales for more than a decade.
Recreational marijuana sales will be subject to a 15% sales tax, of which 7% will be invested into a Justice Reinvestment Fund that will provide grants, contracts and services that respond to the legacy impact of the drug’s prohibition.
Industry experts have estimated that Delaware could see up to $281 million in annual sales of recreational marijuana from some 85,000 customers, creating $42 million in new state tax revenue.
Importantly, the OMC is proposing to preapprove six existing medical marijuana operators to the recreational system by offering license conversions for their 23 locations. They currently serve about 17,000 registered patients, who would continue to have access to a medical marijuana program that is exempt from taxes.
Social equity to be watched
The law creates 60 cultivation licenses, 30 manufacturing licenses, five testing licenses and 30 retail licenses to facilitate the creation of the new industry. Of those licenses, 47 have been earmarked for social equity applicants, which include areas that have been disproportionately impacted by the drug war on marijuana as well as those who have been incarcerated for low-level marijuana offenses or who have a family member who has been.
State Marijuana Commissioner Robert Coupe told the legislature’s Joint Finance Committee this month that social equity licenses will be a key focus of the early system.
“The concept is that during prohibition, these individuals engaged in an activity that was illegal on that day – or a relative did or they lived in a community where it was occurring, – but today it is legal to possess and to use. So [these licenses] give those individuals or that community an opportunity to engage in this business on the legal side of it instead of the illegal market,” he said.
In talking with other state regulators, Coupe noted that Delaware would be wary of outside investors who would take advantage of such social equity license holders. He plans to hold informational workshops or hire legal counsel to assist those applicants.
Draft regulations propose license lottery
The biggest change in approach to the industry launch in the draft regulations outlined by the OMC is the decision to leave the ultimate selection of who receives a license up to a random lottery. While other states, notably including Maryland, have used a scoring-based metric for applicants seeking a potentially lucrative license, they have ultimately been hamstrung by lawsuits.
New York only recently won such a lawsuit against applicants who felt they were discriminated against in the scoring process, but Coupe noted that such legal intervention have slowed the roll-out of licensing programs in those states.
He is proposing that applicants, divided into separate social equity and open admission pools, prove some basic qualifications and pay an application fee. Those cleared applicants will be entered into a random lottery for access to a license.
Are you considering applying for a social equity license under the recreational marijuana system? We want to follow your experience. Reach out to jowens@spotlightdelaware.org to connect.
