Delaware Bill Proposes Temporary Conversion Licenses for Medical Cannabis Retailers

NEW YORK- Sponsored by State Representative Ed Osienski and Senator Trey Paradee, House Bill 408 aims to create a pathway for medical cannabis retailers in Delaware to obtain temporary conversion licenses, enabling them to legally sell adult-use recreational cannabis while maintaining their medical operations.

“As Delaware moves closer to the launch of recreational cannabis sales, it’s important that we continue exploring and implementing policies that will bolster the program’s success and support both new and existing retailers,” said Rep. Osienski. “Our experienced compassion centers are well-equipped to navigate this transition, and the funds generated from their conversion license fees will serve as a vital funding source for social equity applicants, empowering them to kickstart their ventures.”

The Marijuana Control Act established four different license types but did not provide a means for compassion centers to obtain a license for the recreational market. HB 408 addresses this gap by allowing existing medical cannabis compassion centers to apply for conversion licenses under specific conditions:

• Eligibility for renewal in the Delaware Medical Marijuana Program.
• Documentation of the ability to meet medical market demands, continued service plans, and support for the social equity program.
• A signed labor peace agreement with a legitimate labor organization.
• Submission of facility dimensions for cultivation facilities, if applicable.
• Payment of a $100,000 conversion license fee.

The conversion license fee proceeds will be allocated to provide financial assistance to social equity applicants holding a conditional license.

“For us, passing the Marijuana Control Act was always about our desire to replace an illegal market that has overwhelmed our court system and damaged lives with a legal, regulated, and responsible industry that will create thousands of good-paying jobs in Delaware,” said Sen. Paradee. “We also need to protect the jobs created by our compassion centers, who have already put in the hard work of standing up an industry and have the capacity and infrastructure to meet demand on Day 1.”

He added, “House Bill 408 will give Delaware’s existing cannabis-related businesses an avenue to enter Delaware’s new recreational market in a way that will also help the communities most harmed by the war on drugs take advantage of the startup opportunities created by Delaware’s new recreational marijuana law.”

The application period for conversion licenses will run from August to November 2024. Retail facilities holding this license must receive approval from the commissioner before starting recreational cannabis operations. Conversion licenses will expire after four years, at which point they may be renewed as open licenses.