DOVER- Existing medical marijuana compassion centers would have the opportunity to enter the recreational-use market under legislation the House passed on Tuesday.
Sponsored by Rep. Ed Osienski and Sen. Trey Paradee, House Bill 408 would create a pathway for medical marijuana retailers to obtain a temporary conversion license, enabling them to legally sell adult-use recreational marijuana while still maintaining their medical operations.
“As Delaware moves closer to the launch of recreational marijuana 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.”
While the Marijuana Control Act created four different license types, the measure did not provide an avenue for compassion centers to obtain a conversion license to serve the recreational market.
HB 408 would allow existing medical marijuana compassion centers to apply for conversion licenses if they meet certain conditions. These conditions include:
- Eligibility for renewal in the Delaware Medical Marijuana Program.
- Documentation showing current ability to meet medical market demands, plans for continued service, and plans for supporting 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 the conversion license fee.
The conversion license fee would be set at $100,000 for manufacturing, retail and testing and $200,000 for cultivation, with the proceeds earmarked to provide financial assistance to social equity applicants holding a conditional license.
An amendment added to the bill would add additional requirements to ensure medical marijuana patients continue to have access to a diverse and affordable supply of products.
“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,” Sen. Paradee said.
“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 said.
“House Bill 408 will give Delaware’s existing marijuana-related business 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.”
HB 408 would set the application period for conversion licenses from August to November 2024. Retail facilities holding this license would be required to receive approval from the commissioner before beginning recreational marijuana operations. The commissioner must consider the number of social equity retail stores ready to open before granting approval.
Additionally, conversion licenses would expire after 2 years, at which time the license may be renewed as an open license.
HB 408 now heads to the Senate for consideration.
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