Delaware Governor Signs Marijuana Bills, Including One To Let Medical Dispensaries Begin Recreational Sales Early

The governor of Delaware has signed several marijuana bills into law, including measures that would allow existing medical cannabis businesses in the state to begin recreational sales on an expedited basis, transfer regulatory authority for the medical program and make technical changes to marijuana statutes.

All three pieces of legislation were sponsored by Rep. Ed Osienski (D) and Sen. Trey Paradee (D) and were given final approval by Gov. John Carney (D) on Wednesday.

The dual licensing legislation is meant to allow recreational sales to begin months earlier than planned, though critics say the legislation would give an unfair market advantage to larger, more dominant businesses already operating in multiple states.

It will let current medical marijuana providers convert to dual-use licensees that could serve both registered patients and adults over 21. Fees from the license conversions—which are estimated to bring in more than $4 million—will be used for financial assistance to social equity-owned cannabis businesses.

HB 408 will create a “conversion license” category, laying out requirements for medical cannabis businesses to apply and also stipulating that the applicants who are denied due to local bans can apply for general licenses for a new location, which must be approved as long as they meet the requirements.

Prospective conversion licensees will have to demonstrate that they can continue to meet demand among medical patients, show plans to support the state’s social equity program and enter into a labor peace agreement with a “legitimate” union, for example.

The bill “has the potential to raise up to $4.2 million in licensing fees, and that money will then be used to help launch and support the social equity licenses in the form of grants,” Paradee said on the floor last month. “The legislation will also allow the existing compassion centers to provide wholesale supply to new dispensary licensees. This is critically important to ensure the successful launch of the recreational cannabis program in 2025.”

Under the legislation, the Delaware Office of the Marijuana Commissioner (OMC) will need to open applications for conversion licenses by August 1 of this year. The application window will close on November 1.

Conversion licensees can start selling cannabis upon approval. Prior to the license expiring, businesses can apply for general licenses.

An amendment made in the House stipulates that all funds derived from conversion licensing fees from existing medical marijuana businesses “shall only be used as sources of financial assistance for social equity applicants issued a conditional license.”

Another amendment from Osienski made a number of other changes before House passage last month, including increasing the conversion licensing fee from $100,000 to $200,000, making it so the licenses will expire after 24 months instead of 48 months and requiring applicants to “provide an attestation” that they will continue to serve medical cannabis patients.

With the current lack of regulated adult-use access, there have been examples of unlicensed businesses selling cannabis, underscoring the “urgency” of enacting the bill, Osienski said at the time, adding that he agrees with colleagues that “we need to bolster the compassion centers also and make sure that they are not harmed.”

Meanwhile, the governor also signed a separate bill into law that will transition the state’s medical marijuana program from the Office of Medical Marijuana under the Department of Health and Social Services to the Office of the Marijuana Commissioner under the Department of Safety and Homeland Security.

Another measure Carney signed will make a series of “technical and logistical corrections” to the current cannabis code, including defining additional terms, decreasing the allowable hours of operations for retailers, amending license application requirements, allowing for conditional licenses and limiting the transfer of licenses from social equity businesses.

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Meanwhile, Delaware’s medical marijuana program is being significantly expanded under a new law that officially took effect at the beginning of the month.

The policy change removes limitations for patient eligibility based on a specific set of qualifying health conditions. Instead, doctors will be able to issue cannabis recommendations for any condition they see fit.

The new law alsos allow patients over the age of 65 to self-certify for medical cannabis access without the need for a doctor’s recommendation.

Also last month, state lawmakers sent a bill to the governor that would enact state-level protections for banks that provide services to licensed marijuana businesses.

That measure, also from Osienski and Paradee, is designed to clarify that banks, credit unions, armored car services and accounting services providers are not subject to state-level prosecution simply for working with cannabis businesses.

All of this comes as regulators are rolling out a series of proposed regulations to stand up the forthcoming adult-use cannabis market. The current timeline puts the launch of the market at March 2025, according to Delaware Marijuana Commissioner Robert Coupe.

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