What Are the Cannabis Licensing Requirements in Delaware? (May 2024)

In May 2011, Delaware enacted legislation endorsing the medicinal use of cannabis. In contrast to certain states like Kansas, which mandate a 0% tetrahydrocannabinol (THC) concentration in cannabidiol products, Delaware defines “cannabidiol oil” as having a minimum of 15% cannabidiol and no more than 7% THC.

Despite having only six licensed Compassion Centers (medical cannabis dispensaries), Delaware offers extensive protections for qualified users. Registered qualifying patients and caregivers are immune to arrest, prosecution, or the denial of any right or privilege related to medical marijuana use, provided the patient possesses no more than six ounces of usable marijuana. Furthermore, schools and landlords cannot discriminate against individuals solely based on their status as registered qualifying patients or designated caregivers, unless such non-discrimination would result in the loss of a monetary or licensing-related benefit under federal law or regulations.

Governor John Carney strongly opposed the legalization of adult-use cannabis, citing concerns about marijuana as a “gateway drug. In 2021, State lawmakers introduced House Bill 150, which, if passed, would permit adults aged 21 and older to possess up to one ounce of cannabis and expand expungement eligibility for individuals with prior marijuana convictions. Subsequently, in March 2022, lawmakers introduced House Bill 317, seeking to eliminate penalties for possession of one ounce or less of cannabis, except for individuals under the age of 21. Minors found in possession of one ounce or less of cannabis and engaging in public consumption would face charges of unclassified misdemeanors.

Delaware's path to legalizing recreational cannabis reached its pinnacle with the endorsement of House Bill 2, also recognized as the Delaware Marijuana Control Act. As the “First State” and the home state of President Joe Biden, Delaware proudly stands as the 22nd state to legalize recreational cannabis. The Division of Alcohol and Tobacco Enforcement, operating under the Department of Safety and Homeland Security, assumes the responsibility for regulating and enforcing this legislation.

Marijuana License Types in Delaware

Open Licenses

Encompassing Cultivation Facility Licenses, Product Manufacturing Licenses, Retail Marijuana Store License, and Testing Facility License.

Microbusiness Licenses

Covering Cultivation Facility and Product Manufacturing Licenses.

Social Equity Licenses

Similar to open licenses, this category includes Cultivation Facility Licenses, Product Manufacturing Licenses, Retail Marijuana Store License, and Testing Facility License.

Delaware’s Microbusiness Cannabis Licenses

To venture into a microbusiness in Delaware's cannabis sector, certain prerequisites are necessary:

• Ownership of 51% by one or more individuals residing in Delaware for a minimum of 5 out of the past 10 years.
• A team not exceeding 10 employees.
• Operation within a facility with a canopy size less than 2,500 square feet.
• Possession restricted to a maximum of 1,000 plants monthly.

Delaware’s Social Equity Cannabis Licenses

For a social equity cannabis license

• The entity must have 51% ownership by individuals with a 5-year residence in a disproportionately impacted area within the last decade.
• Qualification additionally requires either a prior conviction for a cannabis-related offense or a direct relationship (spouse or offspring) to someone with such a conviction.

Licensing Costs in Delaware

• All establishments must pay a non-refundable fee of $5,000 ($1,000 for social equity and $3,000 for microbusinesses).
• Retail License: Biennial fee of $10,000.
• Cultivation License: Biennial fees ranging from $2,500 to $10,000 based on canopy size.
• Testing License and Product Manufacturing License: Biennial fee of $10,000 each.

The Licensing Procedure

In addition to application fees, Delaware will employ a competitive scoring system for cannabis business license issuance. The evaluation will consider:

• Detailed business plans.
• Track record and proficiency of management personnel.
• Robust safety and security protocols.
• Comprehensive operational, training, and staffing schemes, including social responsibility and diversity initiatives.

License Allocation

• Cultivation Facility: Distributed evenly among 20 general applicants, 20 social equity applicants, and 20 microbusinesses.
• Product Manufacturing: Shared between 10 general applicants, 10 social equity applicants, and 10 microbusinesses.
• Retail Store: 15 licenses each for general and social equity applicants.
• Testing Facility: 3 general applicants and 2 for social equity.

Conclusion

Delaware Legalization of recreational cannabis, marked by the passage of House Bill 2, signifies a significant milestone for the state as it proudly becomes the 22nd to embrace this transformative shift. With regulation and enforcement entrusted to the Division of Alcohol and Tobacco Enforcement, the landscape is delineated into open, microbusiness, and social equity license categories. Aspiring microbusiness owners must meet specific criteria, emphasizing local ties and limited scale, while social equity licenses prioritize individuals with historical ties to disproportionately impacted areas or past cannabis-related convictions. The licensing process, complemented by a competitive scoring system, prioritizes thorough business plans, managerial proficiency, robust safety protocols, and commitment to social responsibility. The allocated licenses, carefully distributed among cultivation, product manufacturing, retail, and testing facilities, reflect a balanced approach to fostering a diverse and inclusive cannabis industry in the First State. With these measures in place, Delaware emerges as a trailblazer, navigating the complexities of cannabis legalization with a commitment to equity, responsibility, and innovation.