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How to Open a Dispensary in Delaware

Opening a Dispensary

The cannabis landscape in Delaware is undergoing a big transformation. The state legalized medical marijuana in 2011 and took a bold step forward by approving adult-use cannabis in April 2023. The authorities solidified regulations by July 2024 and retail sales are expected to begin in March 2025. Without a doubt, a golden opportunity awaits aspiring dispensary owners.

Delaware has an existing network of 13 licensed medical marijuana dispensaries, thus demonstrating a strong foundation for the adult-use market. This provides a unique chance for entrepreneurs who want to leverage their experience or aim to be early movers in the recreational space.

This blog will serve as your guide to navigating the complex cannabis landscape in Delaware.

Current Cannabis Market in Delaware

Delaware’s medical marijuana program serves around 17,000 patients. In contrast, the projected adult user base for the recreational market is estimated to be much larger, at 85,000.

Sales from the recreational market could surpass $52.5 million. The medical marijuana program’s net revenue has shown an increase, reaching $656,477 in the last fiscal year compared to $543,111 in fiscal year 2022.

With Delaware ready to open its application window in July, they expect to bring in $754,000 from application fees, assuming two applicants apply for each available license. This number could surpass $758,000 if all 125 licenses are issued by fiscal year 2025.

How Many Cannabis Licenses Will Be Issued?

License Type	Number Of Licenses To Issue
Indoor & Outdoor Growing Operations	60
Manufacturer (gummies, candies, oils, etc.)	30
Retailers	30
Testing Facilities	5

The program sets aside a share of retail (15%) and cultivation (10 out of 30) licenses for those who qualify under social equity guidelines.

License Application Fees

Type of License	Non Refundable Application Fee
All Open Licenses	$5000
Social Equity Licenses	$1000

Social Equity Applicants To Be Given Priority

A lottery will determine who receives cannabis licenses, therefore, a business plan is not required. However, there will be additional licensing steps and fees. A minimum of 47 licenses will be awarded to social equity applicants.

Social Equity Applicant Criteria in Delaware

To qualify as a social equity applicant in Delaware you must meet one of the listed criteria:

Residents of areas that have been unfairly affected by past cannabis laws can now apply for any type of cannabis business license. However, to qualify, at least half (51%) of the business must be owned and controlled by these residents.

An applicant with at least 51% ownership and control by one or more individuals must meet one of the following criteria:

Was found guilty of any marijuana-related offense or found to be delinquent, except the following:
- Delivery to a minor.
- Any marijuana-related offence that involves a Tier 3 quantity of marijuana.

Is married to or child of an individual who has been convicted of or delinquent for any cannabis-related offense.

Cannabis Taxes in Delaware

There is a 15% tax on retail sales. Sales of medical cannabis are exempt from this.

Revenue generated by the cannabis tax and fees will be deposited into the Marijuana Regulation Fund.

The Justice Reinvestment Fund shall get 7% of the tax income. The legislature would determine how to distribute the remaining funds in the Marijuana Regulation Fund after paying for administrative expenses.

Have Any Municipalities in Delaware Banned Marijuana Businesses?

Yes. Here is the list of municipalities that have already banned cannabis businesses include:

Rehoboth Beach
Bethany Beach
Dewey Beach
Seaford
Dagsboro
Millsboro in Sussex County

Towns can ban all marijuana businesses (stores, growers, processors, and testers), however, businesses can see the light in the outskirts. Unlike towns, counties cannot choose to keep these businesses out.

How Much Cannabis Can You Possess in Delaware

The new legislation allows people 21 and over to have up to a specific quantity of marijuana products. This includes 1 ounce of marijuana flower, 12 grams of concentrated marijuana, and marijuana-infused products with a THC content below 750 milligrams. It’s important to note that exceeding these limits or consuming marijuana in public places is still considered a misdemeanor offense. Additionally, growing marijuana for personal use is not permitted under this bill.

Timeline for Implementation Of Cannabis Licenses

The relevant dates for the issuance of licenses are as follows:

September 1, 2024: Cannabis application window opens.
October 1, 2024: The commissioner may begin to issue licenses.
November 1, 2024: Cultivation licenses can be issued.
December 1, 2024: Manufacturing licenses can be issued.
March 1, 2025: Retail and testing licenses can be issued.

Delaware Cannabis Application Prerequisites

As long as each license is for a different type, an applicant may apply for, be granted, or have several licenses renewed in a single county.
Before granting a conditional license, the Commissioner does not need an applicant to own or own any real estate or facilities to operate a marijuana business.
Under the Bank Secrecy Act, applicants must describe how they intend to abide by cannabis-related guidelines issued by the Financial Crimes Enforcement Network.
Only applicants seeking licences to cultivate marijuana and manufacture marijuana products should submit a quality assurance plan with defined policies and procedures for an extensive quality assurance programme.
If chosen, the candidate needs to fill out an additional license application using the format the Commissioner prescribes.
If an applicant is awarded a conditional licence, they have to choose a physical site for the licensed premises and open for business within 18 months of the conditional license’s issuance date. The Commissioner must give his or her approval to the proposed licensed establishment.

What Documents Do You Need To Apply for A Cannabis Dispensary In Delaware?

Comprehensive business plan, that includes pro forma financial statements and a yearly budget.
The applicant’s and the managing officers’ experience, training, and expertise.
The applicant’s plans for security, safety, and avoiding diversions.

*How to Open A Dispensary in Delaware

Applicants must submit a comprehensive business plan that includes the following details:

Outline your commitment to diversity and inclusion. This should include strategies for the recruitment and hiring of people of color, women, and veterans. Additionally, detail your plan to support their ownership opportunities and career advancement within the organization. Specify the percentage of employees you plan to hire locally (from the city or region).
Describe your plan to create a safe, healthy, and economically beneficial work environment. This should encompass fair scheduling practices, family-supporting wages, and a comprehensive benefits package for employees.
Disclose any criminal, civil, or regulatory history associated with other entities previously controlled or managed by the applicant and managing officers.
Justify the suitability of your proposed location for the facilities you intend to operate.
Be prepared to address any additional criteria deemed relevant by the Commissioner.

Delaware Operational Plans Requirements

The final safety, security, and operations plans must also be submitted to and approved by the Commissioner.

Therefore, Delaware cannabis dispensary applicants need to have a functional operations plan ready; when they are applying for a license. Here are the guidelines:

Video Surveillance Regulations

Video surveillance systems must meet the following specifications:

All cameras must have a minimum resolution of 720p.
All cameras must be motion-activated and recorded continuously at a minimum of 15 frames per second.
All recorded images must accurately display the time and date. According to the National Institute of Standards and Technology Standards in the United States, time is to be tracked.
All marijuana establishments must securely store video footage on an electronic hard drive or comparable device on-site, a secure third-party server, or through an approved alternative method. This ensures protection from tampering or theft.
Video footage must be recorded digitally. Routine footage must be retained for at least 90 days. Footage containing significant information must be securely stored for up to 36 months.
Marijuana establishments are required to provide the Commissioner with secure, round-the-clock access to video footage via a secure internet connection.

Cannabis Facility Record-Keeping

All marijuana establishments must maintain a current and accurate operating manual outlining the following key areas:

Document the reporting structure and management chain of command within the establishment.
Define protocols for the secure handling of marijuana plants, marijuana itself, and all marijuana products.
Establish procedures to ensure accurate record-keeping of all transactions. This includes protocols to verify that purchased quantities of marijuana and products don’t suggest illegal redistribution.

Personnel Security Policies

The operating manual must detail safety and security procedures. This includes a disaster plan with clear steps to follow in case of fires or other emergencies.
The manual should outline strategies for personal safety and techniques to prevent criminal activity within the establishment.
Job descriptions or employment contracts for all employees, and volunteer agreements, should be included in the manual. These documents should clearly define duties, responsibilities, authority levels, qualifications, and supervision for all personnel.
The establishment’s policies regarding a drug- and alcohol-free workplace must be clearly outlined in the operating manual.
The manual should also address additional operating procedures specific to the marijuana establishment’s license type.

Personnel Training

All marijuana establishments must develop and implement an on-site training program, or partner with qualified external resources, to provide essential training for all personnel before they begin work. This training will cover:

Proper use of the security measures and controls implemented by your marijuana establishment.
Specific procedures for responding to emergencies like robberies or violent accidents.
The prohibition of marijuana or marijuana product consumption on the premises of the retail marijuana store.

Retail Marijuana Store Operating Plan

All retail marijuana stores must maintain a current and accurate operating plan outlining the following essential procedures:

Procedures for staff to identify valid ID cards, including clear duties and responsibilities when presented with a suspected fraudulent ID from someone under 21.
Defined protocols for the safe handling of all marijuana and marijuana products available for sale.
A record-keeping and disposal of marijuana and marijuana products plan once they have been removed from their original packaging.
Procedures for conducting a monthly inventory review of all marijuana and marijuana products for sale.

Deli-Style Dispensing System

Retail marijuana stores may petition the Commissioner for approval to implement a deli-style dispensing system for marijuana flowers.

The Commissioner’s decision will be based on the health and public safety of consumers. The petition must demonstrate compliance and include:

A detailed plan outlining methods to prevent exposure of unpackaged marijuana flowers to airborne contaminants is required.
A detailed plan for security and inventory control.
A wholesale agreement with a licensed marijuana establishment providing marijuana flowers.

The Commissioner will evaluate petitions for deli-style marijuana flower sales based on potential risks to consumer health and public safety. To be approved, petitions must comply include detailed plans for:

This plan should outline measures to prevent marijuana flowers from being exposed to airborne contaminants, protecting consumer health.
A detailed plan for robust security measures and effective inventory control procedures is required.
A valid wholesale agreement with a licensed marijuana establishment to supply the marijuana flowers must be included in the petition.

Waiting Area

All retail marijuana stores must have a designated waiting area that meets these criteria:

This waiting area must be physically distinct from the retail area where marijuana products are sold.
Customers should enter the waiting area first upon arrival at the store.
A reception area within the waiting area must be staffed by an employee who verifies each customer’s government-issued photo ID to ensure they are 21 years of age or older.
A retail marijuana store employee must be present in the waiting area throughout operating hours.