Delaware awards first adult-use cannabis licenses in state lottery drawing

Delaware began awarding its first adult-use cannabis manufacturing and cultivation licenses Thursday through a state-run lottery, as officials push ahead with rollout plans despite some local jurisdictions still scrambling to prepare.

The Office of the Marijuana Commission conducted the drawings during a Facebook Live broadcast, with 727 of more than 1,200 applicants qualifying for consideration. An accountant monitored the process, which used random-number generation software across 21 separate drawings for Delaware’s three counties.

The three-hour event covered all categories except open retail licenses, which will be awarded in a separate December lottery due to high demand, after more than 800 applications were submitted for just 30 available permits. That included 519 submissions for 15 open retailer permits and 325 applications for 15 social equity retailer licenses.

But winners may face challenges finding locations to operate, as local jurisdictions wrestle with regulations. Several beach towns have already banned cannabis businesses outright, while Wilmington officials continue debating restrictions despite having over a year to prepare.

“I’m not going to slow walk it because someone’s not prepared,” Marijuana Commissioner Rob Coupe told Wilmington City Council members Wednesday when asked to delay the lottery, according to the Delaware News Journal. He noted the timeline follows legislation passed in April 2023.

Wilmington is considering a 300-foot buffer between cannabis businesses and residential areas, which would restrict stores mainly to downtown, WHYY reported. The city must pass regulations by November to be ready when conditional licenses are awarded, according to the News Journal.

In Sussex County, advocates say new rules requiring stores to be three miles from any municipality, church, school or substance abuse treatment center amount to a “total ban” on retail operations in unincorporated areas, according to WHYY. The restrictions stand in contrast to New Castle County’s plans to allow stores in shopping malls with fewer limitations.

The state’s 13 existing medical dispensaries, which have already applied for adult-use permits, are expected to receive their licenses next month, according to the News Journal. Delaware structured its licensing to promote social equity, with half of the retail permits reserved for eligible candidates.

Some license categories saw less competition. Testing lab permits didn’t require a lottery as applications didn’t exceed available licenses. Social equity applicants for micro cultivation and manufacturing In Sussex County received automatic approval when application numbers matched available permits, the News Journal reported.

Under the state’s implementation schedule, cultivation facility licenses will begin being issued by Nov. 1, followed by manufacturing permits in December, according the office. Retail and testing facility licenses are slated for distribution by March 1, 2025.

Winners must complete additional licensing requirements before seeking local approval. Applications from businesses that weren’t selected will be saved for potential future lotteries, as Coupe has previously said that the state could expand licensing opportunities next year if market demand warrants.

Delaware is looking to fully launch recreational marijuana sales by next spring, joining most other northeastern states in legalizing adult use. Only New Hampshire and Pennsylvania have yet to approve recreational sales in the region.

Gov. John Carney recently signed legislation shielding financial institutions and service providers from state prosecution for working with licensed cannabis businesses.