Delaware Marijuana Sales Could Launch This Year Under New Bill To Allow Dual Licenses For Medical Cannabis Operators

As Delaware prepares to launch its adult-use marijuana market, bicameral lawmakers have introduced a new bill that would allow existing medical cannabis businesses to convert to dual licensees that could serve both patients and recreational consumers starting this year—months earlier than the current sales timeline.

The legislation is being sponsored by Rep. Ed Osienski (D) and Sen. Trey Paradee (D), who championed the legalization law that’s being implemented and have taken a number of steps to build upon the reform this session.

HB 408 would 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 would have to demonstrate that they can continue to meet demand among patients, show plans to support the state’s social equity program and enter into a labor peace agreement with a “legitimate” union, for example.

“As Delaware moves closer to the launch of recreational marijuana sales, it’s important that we continue exploring and implementing policies that will bolster the program’s success and support both new and existing retailers,” Osienski said in a press release on Friday.

“Our experienced compassion centers are well-equipped to navigate this transition, and the funds generated from their conversion license fees will serve as a vital funding source for social equity applicants, empowering them to kickstart their ventures,” he said.

Under the legislation, the Delaware Office of the Marijuana Commissioner (OMC) would need to open applications for conversion licenses by August 1, 2024. The application window would close on November 1, 2024.

Conversion licensees could start selling cannabis upon approval. The licenses would expire after four years, but businesses could apply for general licenses prior to that expiration. There would be a $100,000 license fee, and revenue would be used to provide financial assistance to social equity applicants seeking conditional licenses.

“For us, passing the Marijuana Control Act was always about our desire to replace an illegal market that has overwhelmed our court system and damaged lives with a legal, regulated and responsible industry that will create thousands of good-paying jobs in Delaware,” Paradee, the Senate sponsor of the legislation, said.

“We also need to protect the jobs created by our compassion centers, who have already put in the hard work of standing up an industry and have the capacity and infrastructure to meet demand on Day 1,” he said.

“House Bill 408 will give Delaware’s existing marijuana-related business an avenue to enter Delaware’s new recreational market in a way that will also help the communities most harmed by the war on drugs take advantage of the startup opportunities created by Delaware’s new recreational marijuana law,” Paradee added.

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The bill has been referred to the House Economic Development/Banking/Insurance and Commerce Committee.

The measure’s introduction comes about two months after the legislature approved a separate bill, which was also sponsored by Osienski, that would significantly expand Delaware’s medical marijuana program. It’s currently pending action by Gov. John Carney (D), who allowed the underlying legalization law to take effect without his signature last year.

The legislation would remove limitations for patient eligibility based on a specific set of qualifying health conditions. Instead, doctors could issue marijuana recommendations for any condition they see fit.

It would also allow patients over the age of 65 to self-certify for medical cannabis access without the need for a doctor’s recommendation.

A Delaware Senate committee separately passed a House-approved bill last month that would enact state-level protections for banks that provide services to licensed marijuana 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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