Delaware Recreational Cannabis Legalization

The Delaware Senate has approved two laws that would make it legal to use marijuana for recreational purposes and allow dispensaries to grow and sell it in the state. These bills have been sent to Governor John Carney for his approval, but he has previously expressed his opposition to the legalization of recreational marijuana and vetoed a similar bill last year. Therefore, it is unclear whether he will approve the bills this time or not.

13 months from the Act’s effective date, the Commissioner will start receiving applications for all kinds of licenses, which include open, social equity, and microbusiness licenses and after 14 months the Commissioner will start issuing the licenses.

 

The types of licenses you can apply for include:

 Cannabis Cultvator- 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. A license issued is valid for 2 years.

-An indoor facility with a cannabis plant grow canopy area ≤ 2500 square feet or an outdoor facility with a cannabis plant grow canopy area ≤ 1 acre require:

20 microbusiness licenses and 10 social equity licenses.

• Application Fees: TBD
• Licensing Fees: $2,500

-Indoor facility with a cannabis plant grow canopy area >2500 square feet or an outdoor facility with a cannabis plant grow canopy area > 1 acre require:

20 open licenses and 10 social equity licenses.

• Application Fees: TBD
• Licensing fees:

-Indoor facility with a cannabis plant grow canopy area = or between 2501 sq. ft. – 7,500 sq. ft. or an outdoor facility with a cannabis plant grow canopy area = or between 1.1 acre – 2.5 acres require:

• Application fees: TBD
• Licensing Fees: $5,000

-Indoor facility with a cannabis plant grow canopy area between 7,501 – 10,000 sq. ft.  or for an outdoor facility with a cannabis plant grow canopy area equal to or between 2.6 – 5 acres require:

• Application Fee
• Licensing Fee: $7,500.

-Indoor facility with a cannabis plant grow canopy area equal to or greater than 10,001 square feet or for an outdoor facility with a cannabis plant grow canopy area equal to or greater than 5.1 acres require:

• Application Fee: TBD
• Licensing FEE: $10,000.

Cannabis Product Manufacturer– a person who is licensed to manufacture and distribute marijuana. A license issued under this section is valid for 2 years.

Beginning 16 months after the effective date of this Act, the Commissioner shall issue 10 open licenses, 10 social equity licenses and 10 microbusiness licenses.

• Application Fees: TBD
• Licensing Fees: $10,000 biennially

Cannabis Retailer- a person licensed to sell retail marijuana or retail marijuana products. A license issued under this section is valid for 2 years.

Any holder of a license for a retail marijuana store who wishes to sell marijuana or marijuana products on Sundays must pay a biennial license fee of $500.00 for the issuance of a special license to sell marijuana and marijuana products on Sundays, which is in addition to any other license fees which may be required of the holder.

Beginning 19 months after the effective date of this Act, the Commissioner shall issue the following licenses of 15 open licenses and 15 social equity licenses.

• Application fee: TBD
• Licensing Fees: $10,000 biennially

Testing Facility- a person who performs testing and research on retail marijuana. License issued is valid for 2 years.

Beginning 19 months after the effective date of this Act, the Commissioner shall issue 3 open licenses and 2 social equity licenses.

• Application fee: TBD
• Licensing fees: $10,000 biennially

Microbusiness license- is an applicant for a marijuana cultivation facility license or a marijuana product manufacturing license who meets criteria(s):

• 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

Application fee: $3,000

Licensing Fees: Discounted rate of 40% of the applicable open license

Social Equity license- means a person that is issued a license for retail marijuana store license, marijuana testing facility license, marijuana cultivation facility license, and marijuana product manufacturing license.

• Licensing Fee: Discounted rate of 40% of the applicable open license.
• Application Fee: $1,000

Ownership Limitations:

If there is a change in ownership or financial interest more than 10%, a fee of $5,000 or 15% of the value of the transaction, whichever is higher, is required. If a retail marijuana store license is transferred, the purchaser or transferee shall be liable to the State for the amount of all taxes, penalties, and interest under this chapter, accrued against any retail marijuana store licensee selling or transferring a business, on the date of such sale or transfer, but only to the extent of the value of the property and business thereby acquired from such distributor or retailer.

Social Equity Qualifiers:

A social equity applicant is a Delaware resident that meets one of the following criteria:

• An applicant for any type of license with 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.
• An applicant for any type of license with 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

 

Local Municipality Participation:

A municipality may prohibit the operation of marijuana cultivation facilities, marijuana product manufacturing facilities, marijuana testing facilities, or retail marijuana stores through the enactment of an ordinance or through an initiated or referred measure. A municipality or county may enact ordinances or regulations that are not in conflict with this Act itself or in conflict with regulations enacted by the Commissioner, governing the time, place, manner, and number of marijuana establishment operations. A municipality or county may establish civil penalties for violation of an ordinance or regulations governing the time, place, and manner that a marijuana establishment may operate in such municipality or county.

 

Want to learn more?

Visit our state page and schedule a consultation today!

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Contact us by phone at 602-290-9424 or via email at info@thecannabisbusinessadvisors.com for more information on how to get started.