Joint Finance Committee OKs funding for marijuana regulation

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The General Assembly’s Joint Finance Committee approved funding for the regulatory framework for Delaware’s legal marijuana industry. The timeframe for individuals being able to purchase legal marijuana is expected to be 16 months.

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 would regulate and tax marijuana.

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

On, 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. Of that number, $2.2 million is expected to be ongoing, recurring funding, with $1.9 million in one-time costs.

One 2021 estimate indicated that yearly revenues from the recreational marijuana industry would total more than $200 million. That figure would lead to tax collections of $30 million.

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“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. “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 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 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.

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 the point of sale at 15%.

The medical marijuana industry claims the current provisions will lead to a flood of illegal marijuana into the state. Legalization advocates are concerned about giving the medical marijuana industry wants a spot at the head of the line.

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.

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

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