Cannabis Business License in Delaware


How to Get a Cannabis Business License in Delaware

The cannabis industry is booming across the United States, and Delaware is no exception. If you’re looking to start a cannabis business in the First State, obtaining a business license is a crucial first step. This guide will walk you through the process, ensuring you’re well-prepared to navigate the regulatory landscape. 

Important Dates 

The Office of the Marijuana Commissioner (OMC) is the agency responsible for regulating the recreational marijuana industry in Delaware, pursuant to the Delaware Marijuana Control Act, which became effective on July 5, 2023. 

July 2024 will see the adoption of regulations to administer the licensing of recreational marijuana businesses in the state. 

The OMC will begin accepting license applications on September 1, 2024. 

Up to 60 Cultivation Facility Licenses will be issued starting November 1, 2024.  

Starting December 1, 2024, up to 30 Product Manufacturing Licenses will be issued. 

Finally, the Commissioner will begin issuing up to 30 Retail Licenses, and up to 5 Testing Facility Licenses, from March 1, 2025. 

Types of Licenses 

Primarily, there will be 3 types of licenses that can be applied for in Delaware. They are: 

Open License

This category encompasses various license types tailored for individuals and entities from any state eager to participate in Delaware’s cannabis market.  

Open licenses include Cultivation Facility Licenses, Product Manufacturing Licenses, Retail Marijuana Store Licenses, and Testing Facility Licenses. 

Microbusiness License

To qualify for a microbusiness cultivation or product manufacturing license in Delaware, applicants must fulfill all specific conditions, including: 

  • Ownership of 51% or more by individuals who have resided in Delaware for a minimum of 5 out of the preceding 10 years. 
  • Employing a maximum of 10 personnel. 
  • Operating a facility with a size not exceeding 2,500 square feet. 
  • Possessing no more than 1,000 plants per month. 

Social Equity License

To be eligible for a social equity cannabis license in Delaware, applicants must meet one of the following specific criteria: 

  • Ownership of 51% or more by individuals who have resided in a disproportionately impacted area for at least 5 of the preceding 10 years. These areas are not defined, as of yet.  
  • Was convicted of any cannabis offense in any state, except for the following:
    • Having a prior Tier 3 cannabis offense conviction, or  
    • Delivery to a minor related to a cannabis offense.

The different types of licenses, according to the cannabis facilities’ operations, are explained below in brief: 

Cultivation Facility License 

Holders of a marijuana cultivation license can sell and distribute harvested cannabis, kief, and trimmings to other licensed cultivation facilities, manufacturing facilities, and dispensaries within Delaware. They also have the option to store the cannabis and cannabis byproducts at their own cultivation facility. 

The following tiers for cultivation facilities have been proposed by the OMC: 

Tier Indoor Capacity Outdoor Capacity 
Canopy ≤ 2,500 sq. ft. Canopy ≤ 1 Acre 
Canopy between 2,501 and 7,500 sq. ft. Canopy between 1.1 and 2.5 Acres 
Canopy between 7,501 and 10,000 sq. ft. Canopy between 2.6 and 5 Acres 
Canopy between 10,001 and 12,500 sq. ft. Canopy between 5.1 and 7.5 Acres 

Cannabis Manufacturing Facility License 

Cannabis Manufacturing Facility License holders are authorized to purchase marijuana from cultivation facilities, manufacture and store cannabis products, and distribute cannabis, cannabis concentrates, and cannabis products to other manufacturing facilities and retail stores. They will also need to provide samples for compliance testing, as required by the Commissioner. 

Retail Marijuana Store License 

Retail store licenses will authorize the opening and operation of a cannabis dispensary in Delaware. All sales must be made to individuals that are 21 years-of-age or older, or a valid medical marijuana program card holder. The retail marijuana store license permits licensees to purchase prepackaged cannabis and cannabis products from cultivation and manufacturing facilities. 

Marijuana Testing Facility License 

The marijuana testing facility license permits businesses to receive cannabis and cannabis product samples for compliance testing using specialized equipment. Testing facilities can accept samples from cultivators, retail stores, manufacturing facilities, and authorized individuals. 

The number of licenses that will be allocated are: 

Type of facility Open licenses Microbusiness licenses  Social equity licenses  
Cultivation Facility (Tier 1) – 20 10 
Cultivation Facility (Tiers 2, 3 and 4) 20 – 10 
Product Manufacturing 10 10 10 
Retail Store 15 – 15 
Testing Facility – 

Financial Requirements 

Along with a non-refundable application fee to be submitted during license application, a renewal fee must be paid to the OMC every 2 years. The fees for different types of licenses are listed below:  

Type of License Application Fee 
Open License $5,000 
Microbusiness $3,000 
Social Equity $1,000 

Type of License  Type of Facility  Renewal Fee 
Open License   Retail marijuana store  $10,000 
Marijuana testing facility  $10,000 
Cultivation facility (Tier 1) $2,500 
Cultivation facility (Tier 2) $5,000 
Cultivation facility (Tier 3) $7,500 
Cultivation facility (Tier 4) $10,000 
Marijuana product manufacturing facility $10,000 
Microbusiness License Retail marijuana store $4,000 
Marijuana testing facility $4,000 
Cultivation facility (Tier 1) $1,000 
Marijuana product manufacturing facility $4,000 
Social Equity License Retail marijuana store $4,000 
Marijuana testing facility $4,000 
Cultivation facility (Tier 1) $1,000 
Cultivation facility (Tier 2) $2,000 
Cultivation facility (Tier 3) $3,000 
Cultivation facility (Tier 4) $4,000 
Marijuana product manufacturing facility $4,000 

Requirements for Delaware Cannabis License Applications 

The following are some general requirements that applicants will need to adhere to, when applying for a cannabis business license in Delaware: 

  • Applicants, including owners, officers, and directors, must be at least 21 years of age, or older. 
  • Criminal history and fingerprints of all owners, officers, and directors are to be submitted for background verification. The costs will be borne by the applicants. 
  • Applicants cannot own more than one business entity of the same license type in the same county. 

Complete Application Process in a Nutshell 

The complete process of application for a Delaware cannabis license can be summed up in short, in the following steps: 

Understanding the Legal Framework 

Before diving into the application process, it’s essential to understand Delaware’s cannabis laws. The state’s Office of Marijuana Commissioner (OMC) oversees the licensing process and ensures compliance with all regulations. 

Determine Your Business Type 

Identify which type of license suits your business model and goals, according to the information provided above. 

Develop a Comprehensive Business Plan 

A well-thought-out business plan is essential. It should include a budget, financial statements, likelihood of success, experience, training, expertise, plans for security, safety, and operational plans like staffing details, and a social responsibility plan. 

Secure a Suitable Location 

Finding a compliant location is critical. Ensure your chosen location meets all local zoning laws and is a suitable distance from schools, parks, and other sensitive areas. 

Prepare Your Application 

Applications are to be completed on forms distributed by the OMC. Be prepared to provide detailed information, as per regulations set by the OMC. 

Background Checks and Fingerprinting 

All applicants and key stakeholders must undergo background checks that includes submission of fingerprints of all concerned parties. This step ensures that individuals with certain criminal backgrounds are not involved in the cannabis industry. 

Submit the Application and Pay Fees 

Submit your completed application to the OMC along with the required fees, as per details above. 

Lottery Process after Submission of Application 

Applications that meet the basic criteria for qualification will be entered into a lottery managed by the OMC. Within 10 days after the lottery, the selected applicants will be notified. 

Selected applicants might need to provide extra details or documents for further confirmation, which is again subject to qualification checks. 

Unselected applicants can request the OMC to retain their application for resubmission in the next applicable license lottery. 

Wrap Up 

Obtaining a cannabis business license in Delaware is a complex but manageable process. By understanding the legal framework, preparing a detailed application, and staying compliant with regulations, you can successfully launch your cannabis business in the state. You can find a list of the best cannabis consultants in Delaware on our blog post here, who can help you navigate the license application process, and help your chances in winning a license to open your own cannabis business in the state of Delaware. 

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