How to Open a Dispensary in Delaware

While Delaware legalized medical cannabis in 2011, the industry has remained small and relatively unknown. With longstanding decriminalization laws and recent legislation for adult-use legalization, more businesspeople have turned their eyes on Delaware. 

To date, cannabis business opportunities in Delaware have been few and far between. The Delaware medical marijuana industry is small and tightly regulated compared to many other parts of the country. However, with an explosion of market growth due to the COVID-19 pandemic, the Delaware industry has seen a recent resurgence. 

While there are no immediate opportunities for opening a cannabis dispensary in Delaware, some exciting things are happening that make the state worth a second look.

Unlike elsewhere in the country, the people of Delaware refer to cannabis dispensaries as "compassion centers." 

The medical industry started in Delaware in 2011 with the Delaware Medical Marijuana Act (DMMA) passage. After the passage of this legislation, the state began selling medical cannabis in 2015. The Delaware industry ran with only three dispensaries for several years, although four additional licenses were added in 2020. 

In the early days of the Delaware cannabis industry, there were just over 100 registered patients. The industry saw steady growth every year until COVID-19 struck in 2020. Once the pandemic hit, patient numbers nearly doubled from 2019 to 2021. As of early 2022, Delaware has about 20,000 registered MMJ cardholders.

During the early days of the Delaware MMJ industry, the OMM only issued licenses for complete vertical integration. The original three dispensaries in Delaware cultivate, process, and sell their own cannabis. With a solid aversion to illicit activity, as seen in places like California and Oklahoma, Delaware felt they could more tightly control the market with vertical integration. 

When Delaware expanded its medical market in 2020, it was the first time it offered retail licenses without full vertical integration in the state.

While it doesn’t seem that Delaware will be issuing dispensary licenses anytime soon, we can learn a few things from the last application window in 2020. As MJ Biz Daily reports, “the three new licensees [in Deleware] all fall under the minority or veteran-owned business enterprises category." As seen in places like New York and New Jersey, Delaware regulated the issuance of new dispensary licenses to social equity groups. 

Only ten companies applied for cannabis dispensary permits in the fall of 2020. In the end, Delaware awarded four licenses to three businesses.

With a longstanding medical cannabis industry and lenient laws for possession, Delaware is a promising new market for adult-use legalization. The state decriminalized cannabis possession in 2015. Since then, new expungement laws have been passed over multiple years that clear people’s records of marijuana-related convictions. 

The most recent adult-use legalization efforts in Delaware took place in May 2022, when State Rep Ed Osienski introduced bills HB 371 and HB 372. While HB 371 legalized adult-use cannabis for people over 21 years old, HB 372 laid out the framework for a functional adult-use market. 

The Delaware General Assembly passed HB 371 in a historic vote, only to have Governor John Carney veto the bill for adult-use legalization.

Delaware presents an exciting market for hopeful cannabis entrepreneurs. While there wasn't much movement in Delaware for nearly a decade, there appears to be a good deal of activity happening beneath the surface. Not only has Delaware loosened restrictions on qualifying conditions for MMJ cards, but there is regular talk about adult-use legalization. 

While it might take a few years, most signs indicate that Delaware will legalize adult-use cannabis in the future. You can do a few things to get ahead of the curve when things finally open up in Delaware. 

We recommend that you create a functional business plan outlining your proposed dispensary operation in Delaware. Within this business plan, you should address essential criteria in every new cannabis market, such as funding, ownership, security, and marketing. While choosing a location seems a bit preemptive, researching which municipalities are cannabis-friendly could be a considerable advantage if legalization happens. 

To stay abreast of the latest cannabis business news in Delaware, you should regularly monitor the Office of Medical Marijuana (OMM) website.

Opening a new cannabis dispensary is a daunting task. Since the early days of legal cannabis, investors and entrepreneurs alike have spent millions of dollars on the application process, only to come up short with the point system. 

Taking the extra step to work with a professional consulting firm like MOST will help you get ahead of the competition in securing a dispensary license. With the Delaware market poised to evolve in the coming years, you should not take the application process lightly. 

Contact Us to learn more.