Upcoming Delaware Cannabis Licensing Opportunity

Upcoming Delaware Cannabis Licensing Opportunity

Sabrina
FEBRUARY 9TH, 2024

A bill to expand Delaware’s medical cannabis program has been passed by the state’s House of Representatives. Sponsored by Rep. Ed Osienski (D), House Bill 285 passed in a 26-10 vote and has been sent to the Senate for consideration.

“This legislation will make the Medical Cannabis Program in the state more successful by making it easier and less expensive for patients to access medical marijuana,” said Rep. Osienski.

Delaware cannabis license applications are anticipated to become available in the next four to six months.

Delaware legalized adult-use cannabis in April 2023 through the passing of  HB 1 and HB2, which legalized recreational cannabis for individuals 21 years or older, and allows for access through licensed businesses.

There are four types of cannabis businesses: Cultivation, Manufacturing, Retail and Testing, with 3 types of licenses within each business type, as further described below:

  • Open license is a regular/standard license.
  • Social equity license is a special license based on ownership qualifications. A social equity applicant is a Delaware resident that meets one of the following criteria:
    • At least 51% ownership and control by 1 or more individuals who have resided for at least 5 of the preceding 10 years in a disproportionately impacted area.
    • At least 51% ownership and control by 1 or more individuals who meets one of the following criteria:
      • Was convicted of or adjudicated delinquent for any marijuana-related offense except any of the following:
        • Delivery to a minor.
        • Any marijuana offense with a Tier 3 quantity of marijuana as defined in § 4751(c) of Title 16.
        • The functional equivalent of the offenses described above
      • Is married to or the child of a person who was convicted of or adjudicated delinquent for any marijuana related offense.
    • Microbusiness license is a special license based on ownership qualifications and limitations to business operations. A microbusiness applicant is an applicant for a license who meets ALL the following criteria:
      • 51% ownership and control by 1 or more individuals who have resided in Delaware for at least 5 of the preceding 10 years.
      • Intends to employ no more than 10 employees.
      • Will not operate a facility with a cannabis plant grow canopy area greater than 2500 square feet
      • Will not possess more than 1,000 marijuana plants each month.

DELAWARE CANNABIS LICENSE TYPES & NUMBER OF LICENSES TO BE ISSUED

  • Marijuana Cultivation Facility – an entity licensed to cultivate, prepare, and package marijuana and sell marijuana to retail marijuana stores, to marijuana product manufacturing facilities, and to other marijuana cultivation facilities, but not to consumers. A marijuana cultivation facility may not produce marijuana concentrates, tinctures, extracts, or other marijuana products. The state plans to issue 60 Cultivators as outlined below:
    • Small Cultivator:
      • Indoor facility with a cannabis plant grow canopy area less than or equal to 2500 square feet; or
      • Outdoor facility with a cannabis plant grow canopy area less than or equal to 1 acre
      • Between both indoor and outdoor, the state shall issue:
        • 20 Microbusiness Cultivator Licenses; and
        • 10 Social Equity Cultivator Licenses.

NOTE: No “Open/Standard” licenses for small cultivators, meaning you will have to fit the qualifications of microbusiness or social equity to obtain a small cultivator license

  • Standard (Big) Cultivator:
    • Indoor facility with a cannabis plant grow canopy area greater than 2500 square feet; or
    • Outdoor facility with a cannabis plant grow canopy area greater than 1 acre
    • Between both indoor and outdoor, the state shall issue:
      • 20 Open (Standard) Cultivator Licenses
      • 10 Social Equity Cultivator Licenses

NOTE: No marijuana cultivation facility license may be issued for an indoor facility with a cannabis plant grow canopy area exceeding 12,500 square feet or for an outdoor facility with a cannabis plant grow canopy area exceeding 7.5 acres

  • To Recap, the state will only be issuing:
    • 20 Big Standard/Open Cultivation Licenses
    • 10 Big “Social Equity” Cultivation Licenses
    • 20 Smaller Microbusiness Cultivation Licenses
    • 10 Smaller Social Equity Cultivation Licenses
  • Marijuana Manufacturing Facility – means an entity licensed to purchase marijuana; manufacture, prepare, and package marijuana products; and sell marijuana and marijuana products to other marijuana product manufacturing facilities and retail marijuana stores, but not to consumers. The state plans to issue 30 Manufacturers as outlined below:
    • 10 Open/Standard Manufacturing Licenses.
    • 10 Social Equity Manufacturing Licenses
    • 10 Microbusiness Manufacturing Licenses
  • Retail Marijuana Store – means an entity licensed to purchase marijuana from marijuana cultivation facilities; to purchase marijuana and marijuana products from marijuana product manufacturing facilities; and to sell marijuana and marijuana products to consumers. The state plans to issue 30 Retailers as outlined below:
    • 15 Open/Standard Retail licenses.
    • 15 Social Equity Retail licenses.
  • Marijuana Testing Facility – means an entity licensed to test marijuana for potency and contaminants. The state plans to issue 5 Testing Facilities as outlined below:
    • 3 Open/Standard Testing Facility licenses.
    • 2 social equity Testing Facility licenses.

 

APPLICATION & LICENSING FEES

*Licenses are renewed every 2 years

Business Type App Fee Licensing Fee*
Indoor Grow (<2500sqft) $5,000 $2,500
Outdoor Grow (< 1 acre) $5,000 $2,500
Indoor Grow (2,501 – 7,500 sqft) $5,000 $5,000
Outdoor Grow (1.1 – 2.5 acres) $5,000 $5,000
Indoor Grow (7,501 – 10,000 sqft) $5,000 $7,500
Outdoor Grow (2.6 – 5 acres) $5,000 $7,500
Indoor Grow (> 10,001 sqft) $5,000 $10,000
Outdoor Grow (> 5.1 acres) $5,000 $10,000
Manufacturing Facility $5,000 $10,000
Retail Store $5,000 $10,000

 

NOTE: Social Equity Applicants will only pay a nonrefundable application fee of $1,000 for all business types and 40% off the applicable license fee. Microbusiness Applicants will only pay a nonrefundable application fee of $3,000 for all business types and 40% off the applicable license fee.

 

APPLICATION DETAILS

Competitive Scored Application that will require, at the minimum, the submission of the following information/materials:

  • Comprehensive Business Plan & Financial Proforma
  • The experience, training, and expertise of the applicant and managing officers.
  • Safety, security, and the prevention of diversion Plan
  • Social Responsibility & Diversity Plan
  • Employee Manual
  • An environment and sustainability plan
  • Any criminal, civil, or regulatory history encountered by other entities the applicant and managing officers have previously controlled or managed.
  • Suitability of Proposed Location
  • Attestation signed by a bona fide labor organization stating that the Applicant has entered into a labor peace agreement

 

 

Interested in a Delaware Cannabis License? Contact us at 602.290.9424 or email info@thecannabisbusinessadvisors.com

Looking for a more DIY solution? Browse our Templates!

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