Delaware Adult-Use Cannabis Business Opportunities

Draft Cannabis Regulations Have Been Released in Delaware

After the the Delaware legislature approved two bills, HB 1 and HB2, to legalize and regulate adult-use cannabis, Governor John Carney allowed the bills to make it into law without his signature. Now, we’re seeing the first glimpse of the program with a new release of draft regulations outlining everything from license types to social equity provisions. With applications scheduled to be accepted starting September 1, 2024, now is the time to begin preparing.

Delaware Cannabis License Application Planning Starts Now

With this new, exciting information, we now have an idea of what will be required on the application and how you can qualify for the anticipated lottery-style process. From working with clients in 39 states, our team of license application experts is uniquely positioned to point you in the right direct while others wait. Though this will be a lottery licensing process, it will require extensive business plans and financial pro forma to qualify, so start now to get a jump on the competition.

Contact our cannabis license consultants now to start developing your business and planning for a license win.

How to Apply for a Delaware Cannabis License

Although the new draft regulations are a mere 16 pages, they outline a great deal of information about the upcoming Delaware cannabis license lottery and what interested applicants will need to qualify. They've also laid out a comprehensive rollout timeline as well as social equity provisions and license application fees.

Cannabis License Lottery Application & Property Requirements

To qualify for the license lottery, applicants will need to submit the following plans:

Business Plan which includes a pro forma financial statements and an annual budget
Safety and Security Plan
Operational Plans
Social Responsibility Plan
Training, and Staffing Plans
Plans for a Safe Work Environment
Environmental and Sustainability Plan (cultivation & manufacturing only)

Each applicant, along with their owners, officers, and directors, will be required to undergo a thorough criminal background check, which will include fingerprinting and a review of their criminal history records. Additionally, property or facility ownership will not be required on the initial application prior to conditional licensing.

Delaware's Cannabis Licensing Types and Limits

Delaware seems to be doing something a little differently when it comes to licensing types. The state has broke down the categories into three (3) types:

1) Social Equity Licenses

To meet social equity eligibility in Delaware, an individual must hold at least 51% ownership and control over the business and be one of the following:

A resident for at least five (5) of the preceding ten (10) years in a disproportionately impacted area
Previously convicted of or adjudicated delinquent of a cannabis offense (with exceptions)
Married to or the child of someone with a cannabis offense

2) Micro Business Licenses

These license applicants must be residents of Delaware for 5 of the last 10 years, and:

Hold at least 51% ownership and control
Employ no more than 10 employees
Hold only a tier 1 cultivation facility license

3) Open licenses

These licenses are open for those who do not qualify for social equity provisions and will not be eligible for a microbusiness.

Each of these license types will be split between the conventional business types available for applicants.

Open License Types and Limits

Retail (up to 30 licenses)
- 15 social equity, 15 open
Cultivation (up to 60 licenses)
- Tier 1— less than or equal to 2,500 square feet of cannabis plant grow canopy for an indoor facility or less than or equal to 1 acre of cannabis plant grow canopy outdoors (20 reserved for microbusinesses, 10 reserved for social equity)
- Tier 2—2,501-7,500 square feet indoor, 1.1-2.5 acres outdoors
- Tier 3—7,501-10,000 square feet indoor, 2.6-5 acres outdoors
- Tier 4—10,001 or more square feet indoor, 5.1 acres or more outdoors
- 20 microbusinesses, 20 social equity, 20 open
Manufacturer (up to 30 licenses)
- 10 microbusinesses, 10 social equity, 10 open
Testing Laboratory (up to 5 licenses)
- 3 open, 2 social equity

Localities will be able to prohibit marijuana businesses from operating in their area through ordinance.

License Application Fees

All applicants will need to submit a nonrefundable application fee. All open licenses, regardless of license type, will have a $5,000 application fee while social equity qualifying applicants will only pay $1,000 and microbusinesses will pay $3,000.

What is the Cannabis License Timeline in Delaware?

Since releasing these regulations, the Delaware Office of Marijuana Commissioner (OMC) has also released a comprehensive timeline for when these licenses will be accepted, score, and awarded over the next year.

Key Dates and Milestones for License Applications

March 29, 2024 - Final day for public comment
July 2024 - Regulations adopted
September 1, 2024 - License applications accepted
November 1, 2024 - First cultivation facility licenses issued
December 1, 2024 - First manufacturing licenses issued
March 1, 2025 - First retail and testing licenses issued

Application Round Announcements

Application rounds will be announced at least ten days prior to accepting applications. This announcement will include the following.

Types of licenses during licensing round,
Number of licenses available, and
Beginning and closing date of application period (which will be for a period of 45 calendar days)

Changes and Additional Requirements

Given the narrow time frame, it's crucial for individuals to stay updated on state notifications, regulatory changes, and any additional application requirements to ensure they don't miss the opportunity to submit a comprehensive and qualifying application.