The Next Hot Cannabis Market? Head to the Coast (of Delaware)
Delaware Becomes the Next Coastal Cannabis Destination
In April 2023, Delaware became the 22nd state to approve legislation for legalizing adult-use (recreational) cannabis. Applications for licenses are anticipated to be released in May 2024. Famously business-friendly, The First State may be under the radar as far as being cannabis business-friendly.
Passing adult-use legislation is a strategic move by the local government, as Delaware is surrounded by Maryland and New Jersey; two states along the I-95 corridor with adult-use cannabis programs in place. What can a Delaware cannabis business owner expect? These states enjoy population density, rich history, and ocean coastlines. There are people to see, things to do, and places to visit, especially in the months during and surrounding summer.
What Delaware Can Learn From its Neighboring Adult-Use States
Delaware is expected to follow the growth curve of most states when legislation evolves from medical-use only to adult-use. Often there is a 5-10x increase in retail revenue potential (by way of addressable market). But there’s more here for coastal states, beyond residents. In the last year, Maryland reported a 97% return to 2019 (pre-pandemic) tourism averages (visitors, spending, etc.) and New Jersey reported 99%. Colonial tourism is back!
What’s more, in its first 9 months (in 2022, including through the summer), New Jersey reported over $500 million in cannabis sales. Maryland reported almost $100 million in its recent first month (summer 2023). The kicker: Delaware has enjoyed an almost 20% increase in tourism since the pandemic (i.e. almost 120% of 2019 averages)! And adult-use cannabis is around the corner. If you’ve ever considered opening a cannabis business, and if you’ve ever considered operating in Delaware, now is your time.
Seasonal Cannabis Tourism: When to make hay, when to squirrel away?
Understanding your local industry’s macrotrends (like seasonal tourism) and microtrends (like adult-use adoption curves) makes you a savvier ‘cannapreneur’. Prior to applying and operating, it can help you attract investment, gain local support and approval, and codify your vision of running your business (especially if it’s not your first/only business). Later on, your projections and forecasts can help you plan for team staffing, inventory control, product mix, and marketing efforts.
When approaching a coastal, tourist-friendly state like Delaware, you’ll want to plan for better summer than winter months, in terms of sales. Delaware is one of the least year-round populated states in the US, but as mentioned, has one of the fastest-growing tourism populations. (Rehoboth Beach has been nicknamed “The Nation’s Summer Capital” by Washington, D.C.-area families.)
Another Highly Competitive East Coast Licensing Process
Delaware is limiting the number of cannabis licenses (e.g. a cap of 60 cultivation, 30 processor, and 30 retail licenses) while utilizing a merit-based application process. This means the cannabis licenses themselves (let alone eventual operating businesses) will be highly valued and the application process will be extremely competitive.
How Our Delaware Cannabis Consultants Can Help
Canna Advisors has worked with hundreds of clients across the country for over a decade, with one of (if not the) longest-running and best-performing teams in competitive processes. Our East Coast expertise is unparalleled.
Now is the time to start preparing for the license applications in Delaware by educating your network and local leaders, identifying potential teammates and properties, and understanding your finances and vision via financial modeling, business planning, brand building, and more.
Don’t be left in the cold for the next hot market. Don’t be Last in the First state!