Congratulations! After spending months preparing and submitting your marijuana license application, you have been selected by the Delaware Office of Marijuana Commissioner (OMC) to receive a coveted adult-use marijuana license — now the real work starts.
Over the last eight years, I have helped individuals and companies obtain, and more importantly, maintain, cannabis licenses across several states, including Delaware. I’ve learned during that time that those new to the industry quickly confront a sharp and formidable learning curve for which they are unprepared. After all, this is a highly regulated business, subject to the whims of markets, and the caprice of capitalism. Meticulous plans, colorful charts, and fashionable swag adorned with bespoke logos can all end up in the woodchipper of reality before your first harvest or sale. Your lone objective is to open your doors on time and on budget (more on that later).
Operational Clock
Eighteen months or 548 days. Remember those numbers. This is the length of time each successful Delaware applicant is given to find suitable (and eligible) property, complete construction and/or remodeling, pass inspections, and start operations under the proposed OMC regulations published July 1, 2024. This leaves no time to dawdle.
Within the first 30 days, all lottery winners must complete and submit a supplemental license application and pay applicable licensing fees. So, if you don’t already have your licensing fees in an account ready to send to OMC on the day lottery winners are announced, you are already behind the ball. The supplemental application includes an investigation of each owner’s criminal history, financial background and tax status. Only upon approval of the supplemental license application and payment of all fees will OMC issue a conditional license. We are down to 518 days, if you are keeping count.
The Search for Eligible, Available and Desirable Property
Unlike cannabis license applications in many states, Delaware does not require
applicants to identify a specific property or demonstrate site control as part of their initial application. Securing qualifying property is typically one of the most time consuming and expensive parts of the licensing process. Omitting this requirement is a blessing to applicants and is sure to increase the overall number of applications received by OMC. This decision, however, only delays the inevitable by shifting the mad scramble for property from the application phase to the conditional licensing phase.
Under the Delaware Marijuana Control Act (the Act), a municipality may prohibit the operation of marijuana businesses. Several Delaware towns have already banned operations within their borders. As of this writing, the popular coastal towns of Rehoboth Beach, Dewey Beach, Fenwick Island, and Bethany Beach have passed ordinances that prohibit cannabis sales and manufacturing. Does this mean cannabis will be unavailable to the millions of tourists who flock to Delaware’s beaches from June to September? Of course not, it just means they will need to stock up on their way south from Pennsylvania, New Jersey or New York — or east from Baltimore and Washington, D.C. Competition for retail locations along these travel corridors will be fierce. The same factors that drive the placement of the next Wawa or Royal Farms will shape the cannabis retail landscape.
Read the full article, published in the Delaware State Bar Association Bar Journal, at the link below.
