Entrepreneurs in Delaware are growing increasingly frustrated with the state’s slow rollout of recreational cannabis sales. Although Delaware legalized recreational marijuana in 2023 and was expected to launch sales this spring, several obstacles have put the launch on hold.
Zoning issues and fingerprint check delays are just a few of the issues that have held back the launch of adult-use cannabis sales and left many Delaware entrepreneurs risking massive losses and even bankruptcy. Delaware Cannabis Industry Association president James Brobyn says cannabis retailers are ‘sitting on their hands’ and waiting for recreational cannabis sales to begin.
According to activists, Delaware state leaders should set a date for the official launch of adult-use cannabis sales and compel local governments to loosen the strict zoning restrictions that have delayed recreational cannabis sales. According to license holders, state leaders still haven’t issued an updated timeline even though the recreational marijuana market’s Spring launch was delayed.
In total, 125 entrepreneurs received adult-use cannabis sales licenses through a lottery system, and the state has limited the number of retail cannabis stores to 30. Regulators also issued conversion licenses to 7 medical dispensaries to allow them to sell both recreational and medical marijuana at their premises. Costing between $100,000 to $200,000, these conversion licenses didn’t come cheap.
The main barrier to launching adult-use sales in Delaware is at the federal level, Office of the Marijuana Commissioner (OMC) Community Relations Officer Keila Montalvo says. The OMC is currently waiting for the Federal Bureau of Investigations (FBI) to approve its fingerprinting authorization application, resulting in the delay in officially launching recreational marijuana sales.
The Office will issue conditional licenses once a background review is conducted successfully, Montalvo said. These conditional licenses haven’t been activated yet. In the meantime, businesses that received licenses through the lottery or conversion system have spent hundreds of thousands of dollars and more setting up their retail operations.
But with the state delaying the launch of adult-use sales, the odds of these businesses recouping their investments in time aren’t the best. Jen Stark co-owns and is the CEO of a medical marijuana dispensary called The Farm. She spent nearly $1 million converting her dispensary to also sell adult-use cannabis and is currently waiting for the Office of the Marijuana Commissioner.
Stark argues that the delay in launching recreational marijuana sales is essentially supporting the black market and incentivizing people to sell cannabis illegally rather than through the regulated market. She says adult-use cannabis has been legal for two years in Delaware and residents have already grown accustomed to buying marijuana from illegal smoke shops or illicit sellers on the street.
Cannabis firms like Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) sympathize with the entrepreneurs that have been in limbo waiting for recreational marijuana sales to be flagged off. These delays cost money and time, and no business should be made to go through such avoidable hurdles.
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