A First Look At Delaware’s New Cannabis Market
Key Insights For Delaware’s Cannabis Regulations
In April 2023, Delaware governor John Carney allowed HB1 and HB2 to be enacted into Delaware law without his signature. The two bills legalized adult-use cannabis in Delaware and developed framework for how the state will roll out its cannabis program. While it may be over a year until we see adult-use sales commence in Delaware, now is the time to start business development activities and building your competitive application and get prepared to win.
Anticipated Required Plans for Competitive Licenses in Delaware
Until we see a complete application developed and released by the Commissioner, we can’t say exactly what will be expected. But after 10 years of helping cannabis businesses win licenses, our experts have a pretty good idea of what the regulations will require at this early stage.
According to the regulations, the appointed Commissioner will be tasked with adopting and implementing procedures for issuing new licenses, which will include a competitive scoring process if more of the allotted 60 cultivation, 30 manufacturing, and 30 retail applicants apply. The criteria for the competitive scoring process must include:
- Business Plan – A comprehensive breakdown which includes pro forma and financial statements
- Safety and Security plan – In addition to plans to prevent diversion
- Operational Plan – A multi-section plan that addressing the following:
- Training and staffing
- Social responsibility outlining diversity goals
- Proof of a safe, healthy, and economically beneficial working environment
- Background checks
- Suitability of the proposed location for the facilities
Additional Plan Requirements for Delaware
In addition to these plans, the regulations also outline some requirements that the Commissioner will have to develop before officially commencing cannabis sales. These include labeling and packaging requirements, seed to sale tracking procedures, transportation and storage requirements, health and safety regulations, and testing requirements, among other things. Typically, license applications can require extensive written plans for all of these requirements to be sure you know exactly how you will run your facility and keep your employees and patrons safe.
Delaware Cannabis Application Fees and Capital
Except in the case of social equity applicants, the application fee for all cannabis license types will be a non-refundable $5,000. While this is a relatively low fee, the real chunk of cash will come the capital you’ll need to open your cannabis business. We typically recommend raising a few million to get started to ensure you will have the best chance of not only opening but staying open in a maturing market. However, there is currently no mention of requiring proof of capital in the current Delaware regulations.
Social Equity Application Provisions
As we’ve covered in a previous Delaware cannabis update and across our Delaware blog posts already, social equity will play a huge role in the Delaware cannabis business licensing process. In addition to social equity licenses making up over one third of the total licenses available, applicants that qualify can also anticipate a discounted application fee of $1,000 and support from the Commissioner in finding capital and application resources. To qualify, 51% of the ownership of the business must be held by one or more people who satisfy at least one of these criteria:
- Current Residency – Resident in Delaware for at least five of the last ten years in a disproportionately impacted area
- Previous Offender – Convicted of or adjudicated delinquent of a cannabis-related offense
- Family of Offender – Spouse or child of a person convicted of the qualifying cannabis-related offense
Start Building Your Delaware Cannabis Business with Canna Advisors
Whether you’re preparing to apply as a social equity applicant or apply for the other half of available licenses, Canna Advisors can help you navigate any type of license application you plan to pursue. With deadlines for the Commissioner to issue licenses less than a year away, it’s time to prepare a winning application.
Contact Canna Advisors to speak to our Delaware cannabis consultants now.