The Delaware House of Representatives has approved a bill to launch recreational marijuana sales early through existing medical cannabis dispensaries, while adopting amendments that appear partially responsive to equity-related concerns from advocates.
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About a month after the legislation from Rep. Ed Osienski (D) moved through committee, the full chamber passed the amended measure in a 29-11 vote on Tuesday, sending it to the Senate.
The bill would let current medical providers convert to dual licensees that could serve both patients and adult-use consumers months earlier than the current sales timeline.
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HB 408 would create a “conversion license” category, laying out requirements for medical cannabis businesses to apply and also stipulating that the applicants who are denied due to local bans can apply for general licenses for a new location, which must be approved as long as they meet the requirements.
Prospective conversion licensees would have to demonstrate that they can continue to meet demand among medical patients, show plans to support the state’s social equity program and enter into a labor peace agreement with a “legitimate” union, for example.
As the bill advanced, some advocates raised concerns about the prospects of giving the state’s few existing medical cannabis dispensaries such an advantage over other prospective licensees, particularly equity applicants.
To that end, the House adopted an amendment to the legislation on Tuesday codifying that all funds derived from conversion licensing fees that the existing businesses would have to pay in order to serve the recreational market “shall only be used as sources of financial assistance for social equity applicants issued a conditional license.”
Osienski said during Tuesday’s floor discussion that the bill “will allow those that are coming in that were disproportionately affected by the prohibition on marijuana to have financial assistance, just like many of our companies and corporations throughout Delaware when they apply to expand here or move here. So this will provide that resource for them and also allow them to get up.”
The chamber also approved an amendment from the bill sponsor that makes a series of changes, including increasing the conversion licensing fee from $100,000 to $200,000, making it so the licenses expire after 24 months instead of 48 months, requiring applicants to “provide an attestation” that they will continue to serve medical cannabis patients and other revisions.
With the current lack of regulated adult-use access, there have been examples of unlicensed businesses selling cannabis, underscoring the “urgency” of enacting the bill, Osienski said, adding that he agrees with colleagues that “we need to bolster the compassion centers also and make sure that they are not harmed.”
Under the legislation, the Delaware Office of the Marijuana Commissioner (OMC) would need to open applications for conversion licenses by August 1 of this year. The application window would close on November 1.
Conversion licensees could start selling cannabis upon approval. Prior to the license expiring, businesses could apply for general licenses.
Meanwhile, last month Delaware’s governor signed into law separate legislation to significantly expand the state’s medical cannabis program as regulators take steps to launch the recreational marijuana market.
The new law approved by Gov. John Carney (D) removes limitations for patient eligibility based on a specific set of qualifying health conditions. Instead, doctors will be able to issue marijuana recommendations for any condition they see fit.
The measure will also allow patients over the age of 65 to self-certify for medical cannabis access without the need for a doctor’s recommendation.
Also, a Delaware Senate committee separately passed a House-approved bill in April that would enact state-level protections for banks that provide services to licensed marijuana businesses.
All of this comes as regulators are rolling out a series of proposed regulations to stand up the forthcoming adult-use cannabis market. The current timeline puts the launch of the market at March 2025, according to Delaware Marijuana Commissioner Robert Coupe
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