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Delaware House Democrats

Budget-Writing Committee Approves Funding for Marijuana Regulation

May 23, 2023

DOVER – The budget-writing Joint Finance Committee has approved funding for the regulatory component of Delaware’s legal marijuana industry.

Last month, legislation making Delaware the latest state to legalize and regulate adult recreational marijuana became law. Included in that two-bill package was a measure that will regulate and tax marijuana in the same manner as alcohol.

Sponsored by Rep. Ed Osienski, House Bill 2 would allow adults 21 and older to purchase a personal use quantity of marijuana from a licensed retail marijuana store. Under the law, the Division of Alcohol and Tobacco Enforcement (DATE) will absorb marijuana enforcement and create a separate, administrative Office of Marijuana Control Commissioner within the Department of Safety and Homeland Security.

Tuesday, the Joint Finance Committee, a 12-member panel of representatives and senators from both parties charged with drafting the state’s operating budget, approved $4.1 million in funding to stand up this operation. Of that, $2.2 million is expected to be ongoing, recurring funding, with $1.9 million in one-time costs.

“Our years-long journey to legalize adult recreational marijuana did not end with HB 1 and HB 2 becoming law. Now, the real work begins with getting this new industry off the ground, and that starts by providing the funds to establish the regulatory infrastructure within state government,” said Rep. Osienski, D-Brookside. “I’m grateful to JFC for fulfilling its pledge and moving our effort forward. These funds will come back to Delaware several times over in new, good-paying jobs and tax revenue, while also ending the prohibition against marijuana.”

House Bill 2 creates a legal framework to regulate the cultivation, sale and possession of marijuana, provide opportunities for small businesses to be licensed, and ensure people living in areas disproportionately affected by the prohibition of marijuana have equal access to this new market. The bill also contains a new framework for directing some of the state proceeds from sales and licensing to justice reform efforts.

A companion bill, House Bill 1, removes all penalties for possession of a personal use quantity of marijuana, except for those who are under 21 years of age. Possession of more than a personal use quantity of marijuana and public consumption remain unclassified misdemeanors.

“Through numerous polls and elections, Delawareans have made clear that they want to live in a state with the courage to create a well-regulated and responsible cannabis industry that will create thousands of good-paying jobs,” said Sen. Trey Paradee, co-chair of the Senate Finance Committee and Senate prime sponsor of House Bills 1 and 2. “Make no mistake, we will see a return on the investment we are making here today, both in terms of the jobs that will be created and the lives that will be spared as we bring an end to the failed criminalization of marijuana.”

Under the new marijuana law, up to 30 retail licenses will be issued within 16 months of the bill’s effective date. It also establishes a marijuana control enforcement fee assessed at point of sale, set at 15%.

Currently, recreational marijuana use is permitted in 22 states and the District of Columbia. Nearby states Maryland, New Jersey, Virginia and New York also have legalized adult recreational cannabis.

The vote to approve the funding took place during markup, a period when the committee takes the governor’s recommended budget and begins voting on specific funding requests, essentially writing the budget.

The Joint Finance Committee will continue reviewing and voting on funding priorities for the fiscal 2023 operating budget this week. Once completed, legislative budget staff will write the final budget bill, which must be approved by the entire General Assembly.

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