John SchroyerUnder a new plan adopted by policymakers, Delaware’s upcoming cannabis social equity program will be funded by $6.2 million in state money and “conversion” fees for its six medical marijuana companies that want to also sell recreational.
In the new program, 47 of 125 recreational marijuana licenses are reserved for eligible social equity candidates.
The pivot will allow the adult-use market to launch next year, instead of forcing businesses to wait until 2026 by putting non-operational social equity companies at the front of the licensing line, WHYY reported, as was the original plan when legalization was passed in 2023. A new bill approved by state lawmakers, which is expected to be signed by Gov. John Carney in the coming weeks, authorized the program change.
Under the new rules, Delaware cannabis regulators could begin awarding adult-use business permits as soon as November, and sales could start as soon as April next year, WHYY reported.
Without the bill, the recreational market would have been delayed until 2026, Delaware Marijuana Commissioner Rob Coupe said recently, due to the long startup times that new industry entrants would take to get crops planted, grown, harvested, processed, and ready for retail sales.
Letting the operational medical marijuana companies get the market launched while other companies obtain licenses “creates a much faster pathway to get the adult-use market operational … to make marijuana legally available for the average citizen to buy,” Coupe told WHYY.
Additionally, the pivot creates a new funding stream to bolster the state’s social equity program for entrepreneurs, with an anticipated $4.2 million in “conversion” fees from medical marijuana companies and another $2 million from state coffers. Fees for medical cultivators are $200,000, while those for retail, manufacturing, and testing are $100,000.
One of the six medical licensees, The Farm, plans to invest $800,000 in licenses for several facilities, owner Bill Roher told WHYY. But Roher also warned that the prospect of competing against other recreational marijuana companies from nearby states is “daunting,” given how scarce capital is these days for cannabis businesses hoping to expand.
Social equity permit candidates must have a cannabis-related criminal record, a direct relative with such a record, or have lived for five of the past 10 years in a “disproportionately impacted area,” per state rules.
Some stakeholders are unhappy with the procedural change, saying it flies in the face of the social justice intent behind the 2023 legalization law.
“It creates special unfair competitive advantages for six exclusive businesses by creating guaranteed vertically integrated licenses that are not offered to any other new business applicants,’’ Zoë Patchell of the Delaware Cannabis Advocacy Network told WHYY.
Patchell said the state could have made the licensing process simpler and faster for social equity entrepreneurs, but it chose an easier path of giving in to the wishes of the medical marijuana companies who are eager to get started.
