With Delaware’s adult-use cannabis market officially open for business, the race to secure a license is on! In the following Delaware cannabis license application guide, we summarize all of the essential elements you need to apply for and win a license.
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.
Delaware Cannabis License Application Guide
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.
- November 1, 2024: Cultivation Facility Licenses issued.
- December 1, 2024: Product Manufacturing Licenses issued.
- March 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
Our Delaware cannabis license application guide is here to walk you through the complex and exciting process of applying for a cannabis license. The process involves several stages, from meeting minimum qualifications to eventually obtaining an active license. Below is an updated overview of the entire application process, reflecting the latest regulations from the Delaware Office of the Marijuana Commissioner (OMC).
Application Process Overview
1. Eligibility Check
Applicants must first ensure that they meet the eligibility criteria for their desired license type, whether it’s for cultivation, manufacturing, testing, or retail.
Additionally, no individual or entity may own or operate more than one marijuana establishment of the same license type in a single county.
2. Application Submission
Applicants will submit their application through the OMC’s official form, which must include all required documents (detailed below). Applicants are not required to secure property or facilities before obtaining a conditional license.
For social equity applicants, the Commissioner may request supporting documentation for verification before entry into the lottery. Applications must be submitted during the 30-day window designated by the OMC.
3. Pass/Fail Qualification Review
Once applications are submitted, they are reviewed by the OMC to determine if they meet minimum qualifications. These qualifications include submitting a comprehensive application that details business plans, security measures, financial viability, and compliance with banking laws.
If an application is incomplete or does not meet the requirements, it will not move forward. Applicants who meet the qualifications will enter the lottery phase.
4. Lottery Process
All applicants who pass the qualification review are entered into a random lottery, ensuring fairness and impartiality. The lottery process is conducted by county and license type. Selected applicants will be notified by email within 10 business days following the lottery.
Selected applicants will move on to the next stage, while non-selected applicants may reapply in future rounds.
5. Conditional License
Applicants selected in the lottery must submit a supplemental application, undergo background checks, provide financial history, and pay the required fees within 30 days. Upon successful completion of this process, the applicant is issued a conditional license.
At this point, the conditional licensee has 18 months to secure a physical location, meet zoning requirements, and become operational. If a business cannot meet these requirements within 18 months, the conditional license may be rescinded unless an extension is granted.
You can find our Delaware conditional cannabis license guide here.
6. Active License
Once all conditions are met, including site inspections, compliance with local zoning laws, and securing a labor peace agreement, the OMC will issue an active license.
This allows the licensee to begin operations, including the cultivation, manufacturing, or sale of cannabis. Failure to convert the conditional license to an active license within the given timeframe may result in license termination.
Required Documents
- Business Plan: Must include a budget, pro forma financial statements, and operational details.
- Safety and Security Plan: A comprehensive plan outlining measures to prevent theft, diversion, and ensure overall safety.
- Operations and Staffing Plans: Should include operational procedures, employee well-being plans, and a social responsibility plan.
- Regulatory History: Information about past civil, criminal, or regulatory actions.
- Capitalization Table: Outlining ownership interests and corporate structure.
For Delaware cannabis cultivation and manufacturing licenses, additional documents include:
- Environmental and Sustainability Plan: Addressing efforts to minimize environmental impact.
- Quality Assurance Plan: Ensuring product quality, safety, and consistency.
Timeline of the Licensing Process
- Application Period: The OMC will announce the application period 10 business days in advance. The application window is open for 30 days.
- Lottery Notification: Selected applicants will be notified within 10 business days following the lottery.
- Conditional License Issuance: Selected applicants must complete a supplemental application within 30 days of notification.
- Operational Deadline: Conditional licensees have 18 months to become operational, with potential for extensions if necessary.
Conditional License Limitations
Until a conditional license is converted to an active license, licensees may not:
- Purchase, cultivate, or sell cannabis.
- Transfer ownership interests.
- Make changes to ownership that affect the social equity status of the licensee.
Fees
As part of our Delaware cannabis license application guide, we summarize the fees required to start and operate a cannabis business.
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 on our Delaware Marijuana License Application Guide
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 for Delaware Cannabis License Applications
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.
Additional Resources
Below are additional valuable resources from our cannabis consultants in Delaware:
