Delaware Cannabis Licensing Update

Delaware Cannabis Licensing Update

Sabrina
MAY 11TH, 2024

Cannabis operators, other stakeholders and the general public in Delaware have until June 3 to weigh in on a litany of proposed business rules and regulations related to the rollout of adult-use sales next year.

The regulations, issued last week, cover a variety of topics, including retail, cultivation, processing and testing protocols, applications requirements, and security and safety measures.

Source: https://mjbizdaily.com/delaware-releases-proposed-regulations-for-adult-use-marijuana-sales/

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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