marijuana Robert Coupe

Delaware marijuana czar details fast-moving license plans

Betsy PriceBusiness, Government, Headlines

marijuana Robert Coupe

Delaware marijuana czar told the Central Delaware Economic Summit how Delaware is going about starting a legal marijuana industry.

When Delaware starts allowing the legal sale of marijuana April 1, 2025, the state should get between $28.8 million and $42 million in taxes per year, predicted the man in charge of overseeing the new business sector.

Marijuana Commissioner Robert Coupe to the Central Delaware Economic Summit Tuesday that the difference in the two amounts is how the math was set up.

For the $42 million prediction: The state now has 17,000 medical marijuana patients spending about $3,303 per year on marijuana products. His office expects 85,000 adult recreational use buyers to spend $281 million in sales. That’s a potential revenue of $3.5 million a month in taxes or $42 million a year.,

For the $28.8 million prediction: The office used the $4 million average monthly sales of medical marijuana and multiplied times four to allow for the increase in adult use customers. That would come to $16 million a month with potential tax revenues of $2.4 million a month or $28.8 million a year.

Coupe was the keynote speaker at the event at DelTech in Dover. It focused on the marijuana industry and included a panel discussion about various aspects of the business.

Marijuana details

Among the dried buds he dropped:

— The 15 % sales tax is the first sales tax in the state of Delaware, he said. The Department of Revenue had to wrap its heads around that. Medical marijuana patients do not have to pay that tax.

— Coupe talks about marijuana sales in two categories, medical marijuana, which has been available since 2015, and adult use. 

— A lot of people think that getting into the marijuana industry means they will be automatically making millions, but that’s not realistic, he said. Owners can’t make deductions for the business on federal taxes, it’s a cash business, banks don’t like to lend to them, they won’t take a weed farm as collateral, investors can be challenging, getting insurance can be expensive, products must be organic which translates into expense; and zoning rules can be restrictive, especially in Sussex County, he said.

— Sussex County has put a three-mile buffer around municipal boundaries, churches, schools, colleges and substance abuse centers for retail, which limits choices.

— Coupe showed a slide of a marijuana plant and noted that the traditional green leaf with 5 to 9 fronds is not what people ingest. The leaves have no THC in them, but the flowers do and what people smoke or derive edibles from is that flower.

— The state is starting to look at the “gray” market, which products made from hemp, including Delta-8 products. They are openly sold in smoke shops and can be as powerful as marijuana, but can be made and sold legally because of the federal 2018 farm bills. He said that his office and others have an appointment with State Attorney General Kathy Jennings to talk about controlling that market. Other states also are starting to take a look at it.

— The state started taking applications in 11 categories, including micro and social equity, Sept. 1 to grow, manufacture, test and sell marijuana and marijuana products. 

— Applying is not cheap. Just to apply requires a $5,000 non-refundable payment. Is a license is granted, it’s another $10,000, except in some cases that involve social equity discounts. The discounts go to a person who was harmed by the state’s prohibition of marijuana or lives in an area that was. To see a searchable map of that, go here.

– They expect hundreds of applications. Once the applications go through a pre-screening to check for any red flags, they will award 175 licenses – 60 growing, 30 manufacturing, 30 retail and 5 testing – to be chosen in a lottery.

Marijuana Robert Coupe

People who live in a “disproportionately impacted area” have special terms under which to apply for a license to grow or sell marijuana legally.

— Applying is not cheap. Just to apply requires a $5,000 non-refundable payment. Is a license is granted, it’s another $10,000, except in some cases that involve social equity discounts. The discounts go to a person who was harmed by the state’s prohibition of marijuana or lives in an area that was. To see a searchable map of that, go here.

— The lottery will be broadcast on the office’s Facebook page. Delaware will use the same kind of machine it uses for the state lottery to pick winners in each category. It chose a lottery system because other states that used a point system got bogged down in lawsuits over issues like why someone with a 90 received a license and someone with an 85 was scored differently and did not.

— If someone who wins the lottery cannot meet the criteria or has another problem like losing financial backing, the state will use the lottery to fill the slot until all licenses are granted.

—  The office hopes to issue growing licenses starting Nov.1; manufacturing licenses Dec. 1, or earlier; and retail licenses and testing licenses on March 1.

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— Social equity licenses are strict. Someone who was convicted for marijuana will qualify. Someone who is arrested for possession, but had the case pled down to a lesser offense will not, Coupe said. The licenses are meant to right social wrongs, and someone who has a case pled down won’t qualify.

— Coupe’s office now is testing marijuana that has been confiscated by Delaware State Police so they can show the public how many different substances are in the illegal market and encourage them to buy from tested state sources.

 

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