Delaware’s plan to commence adult-use cannabis sales this spring has been upended.
State cannabis regulators with the Office of the Marijuana Commissioner (OMC) announced March 31 that the Federal Bureau of Investigation (FBI) rejected their revised application for a service code to initiate Delaware’s statutorily required criminal background checks via a fingerprinting system for the forthcoming adult-use market.
The service code from the FBI would authorize Delaware officials to fingerprint individuals and run criminal history reports.
The OCM had been working with the State Bureau of Identification (SBI) and the Delaware Department of Justice to secure the FBI service code, but a conflict between the federal agency and the state means that Delaware’s cannabis regulators must return to state lawmakers to develop new legislation aligning with the FBI’s standards.
“After review of the authorizing statute, the FBI advised that Title 4 of the Delaware Code must contain language explicitly identifying the categories of persons required to obtain a background check,” the OCM announced Monday. “This specificity is necessary to avoid overbreadth. The Office of the Marijuana Commissioner will work expeditiously with the General Assembly to develop proposed legislation containing criteria that is satisfactory to the FBI.”
The Delaware General Assembly is scheduled to be in session until June 30, 2025.
This interruption in Delaware’s adult-use cannabis program rollout comes nearly two years after former Democratic Gov. John Carney allowed a pair of complementary adult-use legalization bills—collectively the Delaware Marijuana Control Act—to be enacted without his signature in April 2023.
The Delaware General Assembly passed follow-up legislation in May 2024 that made several “technical and logistical corrections” to the Delaware Marijuana Control Act, including amending titles 4 and 30 of the state code. Signed into law by Carney, this legislation requires adult-use licensees to submit fingerprints to SBI for SBI to obtain a report of each licensee’s entire federal criminal history record from the FBI.
However, the FBI has now determined that Delaware state lawmakers didn’t craft that legislation properly, leaving an unknown timeline for the state’s 125 adult-use license awardees to receive final approvals to begin their plant-touching operations. This represents a potential financial strain on business plans, especially if an awardee is paying rent on a facility that isn’t producing any revenue.
The OCM held lotteries in October 2024 to award 110 adult-use licenses to cultivators, manufacturers, testing labs and social equity operators for the forthcoming market.
And in December 2024, the office conducted another lottery to award 15 adult-use dispensary licenses to non-social equity retailers—in addition to the 15 social equity retail licenses awarded two months earlier for a total of 30 new dispensaries for the forthcoming market.
Before Delaware’s first marijuana commissioner, Rob Coupe, resigned in early January, he set a goal of commencing adult-use sales by as early as March 2025.
Amid the hangup with the FBI, the OCM could still launch adult-use sales via its existing vertically integrated medical cannabis licensees, which operate 13 compassion centers.
Before leaving his post, Coupe worked with state lawmakers to craft another piece of legislation—again amending Title 4—allowing for the state’s medical cannabis businesses to convert their licenses to the adult-use marketplace, which Carney signed into law in July 2024 to help expedite the forthcoming market.
Previously, the FBI worked with Delaware officials to provide a fingerprinting background system for the state’s medical market, meaning these operators already meet the statutory requirements under the state’s adult-use laws.
However, kickstarting an adult-use market by providing existing medical operators a first-mover advantage would deviate from the OCM’s focus on an equitable program rollout.
Zoë Patchell, the executive director of the Delaware Cannabis Advocacy Network, expressed concern over this potential first-mover advantage in a recent interview with the Delaware News Journal.
“The biggest concern is if OMC allows the existing medical marijuana businesses to begin adult-use sales in the spring, while the licensing process for all the new businesses has been stalled due to no fault of their own, which is just fundamentally unfair,” Patchell told the media outlet.
Under the legislation that paved the pathway for medical cannabis operators to transition to the adult-use market, medical cannabis businesses are required to pay a base conversion fee of $100,000 for manufacturing, retail and testing permits and $200,000 for cultivation permits.
This fee structure has the potential to raise more than $4 million, which lawmakers earmarked for financial assistance to social equity operators.
