Delaware’s Proposed Cannabis Regulations: What To Do Now
Delaware Releases a New Batch of Cannabis Regulations
Delaware is fast becoming one of the top states on our mind as it ramps up towards the launch of its adult-use cannabis program. It’s the little state that could, but that doesn’t mean there aren’t big cannabis business opportunities to be found here. And with the nearing of July when regulations are meant to be finalized, we received a fresh batch of proposed regulations covering everything from license application requirements to safety and testing protocols for cultivators, manufacturers, and retailers.
License Application Requirements for Delaware Cannabis Businesses
Overall, there were few drastic changes to be found in these regulations as compared to all the information we had received from either the statute language or additional information and regulations from the Office of the Marijuana Commissioner. This holds true with all the necessary steps a prospective cannabis business will need to take in order to apply and meet the qualifying criteria to be entered into the lottery.
Business Property, Plans, and Pro Forma
As has been known for some time, a cannabis business applicant does not need to have a property in order to apply and documentation for qualifications of one’s social equity status, if applying as such, is required. For the minimum requirements outlined in these regulations, an applicant must provide a comprehensive business plan, including:
- Annual budget and pro forma financial statements
- Experience, training, and expertise of the applicant and managing officers
- Plans for safety, security, and the prevention of diversion
- Plans for operations, training, and staffing
- Financial plan for compliance with the Bank Secrecy Act,
- Entity and individual ownership attestations
- All applicable fees
Cannabis cultivators also need to have a quality assurance plan with written policies and procedures for a quality assurance program.
So, while this is a qualifying lottery, Delaware has made it clear that individuals applying will need to take time and be thoughtful and methodical in their license application submission.
Updates and Clarifications From Previous Regulations
In addition, we received some clarity and updates related to operations, packaging, labeling, and marketing.
Cannabis THC Limits
A specific point of clarification is that while single-serve cannabis edibles and beverages may contain up to 10 milligrams of THC, the package, can only hold up to 50 milligrams of THC.
This is a departure from what we usually see in most states which allow upwards of 100 milligrams of THC. Now this is only applicable for edibles and beverages; tinctures, for example, may contain up to 300 milligrams of THC per package.
Cannabis Packaging and Design Restrictions
We also received new information on cannabis packaging and design restrictions. As is almost universally the case in, cannabis product packaging cannot look appealing to children so no candy or cartoon characters, neon colors, or imitations or resemblances to existing brands. Depicting cannabis being consumed along with a realistic depiction of a marijuana leaf is also prohibited in signage.
Other Product, Marketing, and Financial Updates
Some additional restrictions include a ban on product samples, advertising through billboards, and delivery to retail customers. However “deli-style” shopping for cannabis flower in a retailer is allowable. There is also a requirement that all cannabis businesses must undergo and annual financial audit and submit documentation of such to the OMC with their annual report.
Next/Best Steps For Prospective Delaware Cannabis Businesses
These are still just proposed regulations and we do expect changes to be made prior to the final adoption, which right now is scheduled for sometime in July. Individuals will have until June 3 to issue public comments on these regulations and can do so at OMC@delaware.gov.
Meanwhile, we think this is the opportune time to begin working on some of the necessary information any Delaware cannabis business will need to succeed. This includes financial modeling and business planning, both of which have current requirements in the regulations and may not only be mandatory for submissions, but will at least help with the viability of the business and potentially appeal to investors.
Our proven consultants at Canna Advisors would be more than happy to assist with this and address any of your Delaware-specific cannabis needs. Contact us directly or book a Delaware cannabis consultation to get started today.