Why Should Delaware Care?
Delaware’s marijuana commissioner expects the legal marijuana industry to be up and running this spring, even though many municipalities across the state have implemented restrictions on where retail stores can open.The two top leaders spoke at Spotlight Delaware’s Legislative Summit event, highlighting the need for a legal market to strengthen economic activity and enable safer consumption.
Despite recent hurdles by municipalities, Delaware’s outgoing marijuana commissioner still believes the state’s legal recreational sales market will launch between April and June.
Robert Coupe, who announced earlier this month that he is resigning as marijuana commissioner amid a changeover in administrations, made that prediction at Spotlight Delaware’s Legislative Summit, held Jan. 8 at Delaware State University.
Coupe has overseen Delaware’s issuance of recreational marijuana business licenses for growers, processors, testers and retail sale shops in the last year, even as many municipalities have established restrictions on where such stores can open.
Coupe and Paul Hyland, the deputy commissioner, believe some of the restrictions are too rigid, and said there are discussions with legislators to go back and limit the ability of counties and municipalities to limit the now-legal industry. They pointed particularly toward Sussex County, where a 3-mile buffer was established around schools, churches, treatment centers and other establishments — significantly limiting the area where someone could open a marijuana retail store.
These restrictions can lead to access inequity, especially in cities that are disproportionately affected by these laws, they said.
That message was conveyed to more than 200 community members and advocates who attended the Legislative Summit. During a panel discussion, Spotlight Delaware reporter Brianna Hill sat down with Coupe and Hyland to discuss Delaware’s readiness to begin adult-use sales this spring.
In 2021, then-State Auditor Kathy McGuiness said the legal marijuana industry could generate $215 million in economic activity and $43 million annually in tax revenue for the state.
Coupe and Hyland expect to generate about $42 million annually in tax revenue from a 15% sales tax, which will be the first sales tax in the state, but reiterated that these numbers are an estimate.
The state’s system has also been designed to ensure equitable access for Delawareans to open their own retail locations by appropriating $2 million through the annual bond bill to support a social equity grant program.
The social equity grant program will be mirrored after the Division of Small Business’ EDGE grant program. Coupe said the department will be developing the program in January and February, giving potential business owners assistance — but it won’t be a loan they need to pay back.
Delawareans have expressed mixed reactions to the legal marijuana industry, with some stating that it tarnishes a community’s reputation. The two commissioners explained that many of those concerns are linked to the illegal market.
“Some folks will say to me, ‘I don’t like the smell of it, Coupe. It should have never been legalized.’ So that’s their position. And then through ordinances or regulations, they kind of hope to ban it because they’re against it,” Coupe said. “I said, ‘OK, that’s not the regulated market. That’s the illegal market.’ That market is going to continue to thrive because of the theory… that if you have a robust, legitimate, regulated market, that is the best way to impact an illegal market.”
Coupe and Hyland added that the marijuana retail locations will not be similar to alcohol stores because unlike liquor stores, marijuana dispensaries are limited in number by only a handful of available licenses. The marijuana retail stores will also be supervised differently.
All of the legal marijuana retail stores operate with armed security because they’re a cash-only business, and patrons are asked for identification once they enter to ensure they’re at least 21 years old. Even if an order is made online, the purchaser still has to enter the store and pay with cash to receive their order.
Coupe added that the state is using its regulations to keep out foreign substances like pesticides and molds, which is something the illegal industry isn’t worried about.
But both Coupe and Hyland emphasized the importance of safe products and messaging. Hyland has experience in the medical marijuana industry and said the same health and safety messages were brought to the adult-use market.
“There’s problems throughout the country where someone will have accidental overconsumption, or some people call it an overdose, and you want to be able to prevent that through education and smart rollout of products that make sense for consumers,” he said.
Delaware currently has 13 marijuana dispensaries throughout the state and could have a total of 45 dispensaries once the retail locations are open.
Hyland said that when the retail industry starts, there will be shortages because of the excess demand, but eventually “the novelty wears off, and it just becomes another consumer product.”
The session ended with Coupe adding that this industry has the potential to bring “hundreds of jobs” to Delaware, yet it is often demonized rather than embraced.
“These folks are being told, ‘Don’t bring your business here, don’t open here, don’t bring that employment opportunity here.’ And a lot of them are focusing on the store, and they’re missing out on the cultivation, the manufacturing, the lab testing,” Coupe said.
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