With Delaware’s adult-use cannabis market officially open for business, the race to secure a license is on! Our Delaware cannabis consultants have a proven track record, taking second place in the last medical cannabis license round. Now, we’re here to guide you through the complex process of securing one of the limited licenses in this new adult-use market.
In this article, our Delaware cannabis consulting firm summarizes all of the essential elements you need to apply for and win a license.
Delaware Cannabis Consultants
Timelines
The Delaware Marijuana Control Act became law on July 5, 2023. Here are the key dates to keep in mind for the licensing process:
- August 6, 2024: The Commissioner began accepting applications for all licenses.
- September 30, 2024: Deadline for submitting applications.
- October 1, 2024: Cultivation Facility Licenses issued.
- November 1, 2024: Product Manufacturing Licenses issued.
- February 1, 2025: Retail and Testing Licenses issued.
Regulatory Agency
The Office of the Marijuana Commissioner (OMC) oversees the regulation of Delaware’s recreational cannabis industry under the Delaware Marijuana Control Act. The OMC is responsible for ensuring compliance, issuing licenses, and regulating the market to ensure fair and safe practices.
Laws & Regulations
Delaware’s adult-use cannabis industry is governed by the Delaware Marijuana Control Act. The law outlines everything from operational requirements to taxation and the license application process. Key points include strict regulations on safety, security, and social equity requirements to ensure a fair and inclusive market.
For more information about the Delaware Marijuana Control Act, refer to:
- 2023 152nd General Assembly Delaware Marijuana Control Act, HB 1
- 2023 152nd General Assembly Delaware Marijuana Control Act, HB 2
- Delaware Code Delaware Marijuana Control Act
Types and Number of Licenses
Delaware offers four types of cannabis business licenses with a total of 125 licenses available in the initial round:
- Cultivation Facility License: 60 licenses (20 Open, 20 Social Equity, 20 Microbusiness)
- Product Manufacturing Facility License: 30 licenses (10 Open, 10 Social Equity, 10 Microbusiness)
- Testing Facility License: 5 licenses (3 Open, 2 Social Equity)
- Retail Marijuana Store License: 30 licenses (15 Open, 15 Social Equity)
A total of 125 licenses are available in the initial round, distributed among Open, Social Equity, and Microbusiness applicants.
- Open Licenses: These licenses have no specific eligibility restrictions, making them accessible to a broad range of applicants. A non-refundable application fee of $5,000 is required upon submission.
- Microbusiness Licenses: These licenses are designed for smaller operations. To qualify, applicants must meet specific criteria, including:
- 51% ownership by individuals who have resided in Delaware for at least 5 of the last 10 years.
- Employing no more than 10 employees.
- Operating with a cannabis plant grow canopy area of no more than 2,500 square feet.
- Possessing no more than 1,000 marijuana plants per month.
- Social Equity Licenses: These licenses are intended to promote inclusivity and fairness in the cannabis industry. To qualify, applicants must meet one of the following criteria:
- At least 51% ownership by individuals from disproportionately impacted areas or those who have a history of cannabis-related offenses (with some exceptions).
- Social equity applicants benefit from additional support and resources, making these licenses particularly valuable for those meeting the criteria.
This structured approach ensures that Delaware’s cannabis industry is inclusive while maintaining a level playing field for all applicants.
Delaware Cannabis License Application Requirements
Below, our Delaware cannabis consultants summarize the license application process, including the required documents you must submit.
Application Process summary from Delaware Cannabis Consultants
Delaware’s cannabis license application process is designed with fairness and transparency at its core, utilizing a pass/fail scoring system followed by a lottery for eligible applicants. Here’s a breakdown of how this process works from our cannabis consulting team in Delaware:
- Eligibility Check: Before submitting an application, applicants must ensure they meet the eligibility criteria for the specific license type—whether it’s an Open, Microbusiness, or Social Equity license.
- Application Submission: Once eligibility is confirmed, the next step is to submit a comprehensive application. This submission includes all required documentation (more on this below), such as business plans, security measures, and financial statements, along with a non-refundable application fee.
- Pass/Fail Scoring: Applications are evaluated on a pass/fail basis. This means that each application must meet all the necessary requirements to pass. If any part of the application is incomplete, or if any of the mandatory criteria are not met, the application will fail and will not proceed further in the process.
- Lottery Entry: For applications that pass the initial scoring, the next step is a lottery. All applications that meet the pass criteria are entered into a randomized lottery. This lottery is used to select the applicants who will receive a cannabis business license. The use of a lottery ensures that every qualified applicant has an equal chance of being awarded a license, adding an additional layer of fairness to the process.
- Notification and Licensing: Applicants who are selected in the lottery will be notified by the Office of the Marijuana Commissioner (OMC) and will be issued their licenses upon final approval. Those who are not selected may have the opportunity to reapply in future application rounds.
This process ensures that all applicants who meet the required standards have an equal opportunity to participate in Delaware’s cannabis market.
Required Documents
- Business Plan: Including an annual budget and pro forma financial statements.
- Safety and Security Plan: Detailing measures for preventing diversion and ensuring safety.
- Operations, Training, and Staffing Plans: Including a social responsibility plan and an employee well-being plan.
- Regulatory History: A discussion of any past criminal, civil, or regulatory issues.
- Capitalization Table: Detailing ownership interests and control.
For Delaware cannabis cultivation and manufacturing licenses, you’ll also need:
- Environmental and Sustainability Plan: Outlining efforts to minimize environmental impact.
- Quality Assurance Plan: Ensuring product safety and consistency.
While facility designs do not seem to be required for the initial application, make sure you work our Delaware cannabis architects for compliant designs.
Fees
Each application requires a non-refundable application fee. These licenses are valid for 2 years.
Our cannabis consultants summarize the fees in the table below.
Marijuana Cultivation Facility
Below are the fees for the cannabis cultivation facility license in Delaware.
| License Type | Business Type | Application Fee | License Cost |
|---|---|---|---|
| Cultivation | Open | $5,000 | See Cultivation Size Tiers |
| Cultivation | Social Equity | $1,000 | 40% of open license* |
| Cultivation | Microbusiness | $3,000 | 40% of open license* |
Cultivation Size Tiers
| License Type | Indoor Facility | Outdoor Facility | License Cost |
|---|---|---|---|
| Cultivation Size Tier 1 | ≤ 2,500 sf | ≤ 1 Acre | $2,500 |
| Cultivation Size Tier 2 | 2,501 to 7,500 sf | 1.1 to 2.5 Acres | $5,000 |
| Cultivation Size Tier 3 | 7,501 to 10,000 sf | 2.6 to 5 Acres | $7,500 |
| Cultivation Size Tier 4 | 10,001 to 12,500 sf | 5.1 to 7.5 Acres | $10,000 |
Marijuana Testing Facility
Below are the fees for the Delaware cannabis testing facility license.
| License Type | Business Type | Application Fee | License Cost |
|---|---|---|---|
| Testing Facility | Open | $5,000 | $10,000 |
| Testing Facility | Social Equity | $1,000 | $4,000 |
Marijuana Product Manufacturing Facility
Below are the fees for the marijuana product manufacturing facility license in Delaware.
| License Type | Business Type | Application Fee | License Cost |
|---|---|---|---|
| Manufacturing | Open | $5,000 | $10,000 |
| Manufacturing | Social Equity | $1,000 | $4,000 |
| Manufacturing | Microbusiness | $3,000 | $4,000 |
Retail Marijuana Store
Below are the fees for the retail marijuana store license in Delaware.
| License Type | Business Type | Application Fee | License Cost |
|---|---|---|---|
| Retail | Open | $5,000 | $10,000 |
| Retail | Social Equity | $1,000 | $4,000 |
These tables clearly outline the costs associated with each type of license under Delaware’s cannabis program, ensuring that applicants understand the financial commitments required for each type of license.
Conclusions from our Delaware Marijuana Consultants
Securing a cannabis license in Delaware is a competitive and detailed process, but it offers a significant opportunity to enter a burgeoning market. Whether you’re aiming for a cultivation, product manufacturing, testing, or retail license, careful preparation and adherence to the application requirements are crucial.
For expert guidance throughout the application process, contact Quantum 9. Our Delaware cannabis consultants are here to help you navigate this complex landscape and increase your chances of winning a license.
APPENDIX | Additional Information from Delaware Cannabis Business Consultants
Transferring Licenses – Can you sell your cannabis license?
In short, yes, you can transfer (i.e., buy and sell) Delaware cannabis business licenses. However, the Commissioner must approve the transfer, and you must pay a fee.
In the case of microbusiness and social equity licenses, you can only transfer these licenses to individuals who meet the microbusiness or social equity criteria.
The fee you must pay to transfer a license is $5,000 or 15% of the transaction, whichever is greater. If you want to buy or sell a cannabis business license, speak with one of our cannabis M&A advisors. Additionally, check out our cannabis businesses for sale.
