Delaware Gives Marijuana Licensees $6.2 Million for Social Equity Purposes

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For 15 months, Bill Rohrer has been eager to start growing marijuana to supply Delaware’s future recreational market.

Rohrer is a partner in The Farm, a medical cannabis company with two cultivation sites, a facility that makes edibles and other products and retail stores in Felton and New Castle.

But when lawmakers legalized weed in April 2023, they didn’t follow the lead of New Jersey, Maryland and some other states in allowing medical companies to launch recreational sales.

“It fuels the illicit market, that’s what it does,” Rohrer told WHYY News a year ago, as legal users continued to engage in illegal activities — buying weed from local dealers or transporting it across state lines from legal stores in neighboring states.

This is about to change.

A bill passed by lawmakers in June and expected to be signed by Gov. John Carney in the coming weeks allows Delaware’s six medical marijuana licensees to apply for so-called conversion licenses to cultivate, manufacture, test and sell retail cannabis.

Those licenses will be issued starting in November, allowing Rohrer to begin growing weed that he can sell to The Farm’s retail stores, possibly as early as April 2025, and to others who will receive retail licenses.

Without the bill’s passage, Marijuana Commissioner Rob Coupe said, the start of retail sales would have been delayed until 2026. Applicants who receive the new cultivation licenses will take up to a year longer to start operations and then grow crops for retail sale, he said.

Delaware’s new policy “creates a much faster path to get the adult-use market up and running…to make marijuana legally available for purchase to the average citizen,” Coupe told WHYY News.

Beyond speeding up what Coupe acknowledges is a slow and laborious process of creating regulations and a licensing process, granting conversion licenses could inject up to $4.2 million into a new fund to help so-called social equity applicants, who are expected to receive 47 of the 125 licenses. The $4.2 million would come from application fees for conversion licenses.

Lawmakers also allocated an additional $2 million to the fund for aspiring cannabis entrepreneurs seeking social equity. To qualify, they must own at least 51% of the company and meet one of the following criteria:

• Was convicted of a marijuana-related offense, provided it was not a sale of more than 11 pounds or trafficking to a minor
• Had or has a parent, legal guardian, child, spouse or dependent who has been convicted of a marijuana-related crime
• Have lived for at least five of the last 10 years in a “disproportionately impacted area.” Essentially, this is a defined census tract where marijuana-related arrests have been high over the past decade. Applicants can see if their address is eligible on the state’s website

The conversion licenses that Roher and other medical licensees have asked to be allowed to apply for will not come cheap.

Cultivation licenses cost $200,000 each. Manufacturing, testing or retail licenses cost $100,000.

Rohrer said he appreciates that lawmakers accepted the logic of medical licensees this year and plans to spend up to $800,000 on conversion licenses: two for cultivation, one for manufacturing, two for existing retail stores and possibly one for a new store in Sussex County.

But he says it won’t be an easy task in a retail market facing stiff competition from border states. Medical marijuana sales in Delaware dropped significantly last year when Maryland opened its retail stores.

“We’re in a bit of a confusing situation,” Rohrer said. “We’re excited about growth, but it’s a very daunting expansion and a need for capital investment. So that’s kind of the dilemma we’re in.”