FAQs: Delaware’s Adult Recreational Marijuana Legalization Act

[Pages:7]FAQs: Delaware's Adult Recreational Marijuana Legalization Act

How much money will legalized recreational marijuana raise for the state?

This bill is not meant to be a money-maker for state government.

It's meant to cripple the illicit market for marijuana and curtail its associated ills, spur job creation and economic development in a brand new industry for Delaware, and ensure that underserved communities disproportionately impacted by marijuana prohibition benefit from that.

Projections for the older version of this bill were based on Colorado's market and tax structure. This legislation would diverge significantly from that methodology, making an estimate much harder to gauge.

There are a few key challenges in estimating the amount revenue that marijuana sales will raise for the state:

o This is a completely new market in an untested region of the United States, making it difficult to use other states as examples.

o Similarly, estimates cannot take into account the impact of legalization among surrounding states.

o Delaware's small size makes it difficult to compare market sizes and the limited number of enterprises that would be allowed under this legislation.

Will revenues from marijuana legalization be earmarked for specific spending?

Delaware's state budget is largely based on a General Fund that commingles tax and fee revenues from almost all major sources, including sources similar to what's envisioned for marijuana legalization such as casino gaming licenses and proceeds, alcohol and tobacco products. It's what allows the Governor and General Assembly to build a responsible, balanced budget from year to year and maintain the state's triple-A bond rating.

Revenues from marijuana legalization will not be diverted away from the standard budget process or earmarked for special interests. Marijuana revenues shouldn't be treated as a stable revenue source that can be used to guarantee a specific level of funding for state agencies or programs.

What's the rationale for setting the Marijuana Control Enforcement Tax at 15%?

The Tax Foundation recommends a final retail tax rate between 10-25% for legal recreational marijuana. The proposed 15% rate (line 1145) fits that guideline while still being a lower rate than most currently legal recreational states, ensuring Delaware's cannabis market is competitive with both the illicit market and the existing legal market.

How will legalizing recreational marijuana help curtail the illicit market?

It's Economics 101.

The best way to degrade the illegal marijuana trade is through competition, namely by offering consumers a high-quality product at a comparative price that eliminates the inherent risks involved with buying marijuana on the illicit market.

Why risk arrest when you can buy legal marijuana products from safe, regulated stores for a fair price?

This legislation creates a framework that favors the legal market for marijuana and undercuts the illicit market by: Keeping the tax rate comparatively low; promoting lowercost, outdoor-grown marijuana; and requiring seed-to-sale tracking on all plants to prevent diversion of product to the illicit market. All of this will make locally grown, legal marijuana competitive with marijuana grown illegally and with legally-grown marijuana diverted from other states.

What does this bill do to promote equity for communities in Delaware most affected by the prohibition of Marijuana?

The bill creates a special licensing pool for Social Equity Applicants limited to those who either live in a disproportionately affected area or have either been convicted of a marijuana-related offense (barring selling to a minor) or are the child of a person convicted of a marijuana related offense.(Line 782)

Social Equity Applicants would have access to all four marijuana licensing categories envisioned in the bill: Retail stores, testing facilities, cultivation facilities and product manufacturing facilities.

In addition, the bill includes the following changes to create broader opportunities in the legal marijuana market for Delawareans who have been most affected by prohibition, and to give those licensees a leg-up in competing with big multi-state business interests.

o Discounted application and licensing fees o Waiver of physical location requirement for a license application o Access to a Technical Assistance Program developed by the commissioner o Creation of a Social Equity Revolving Loan Fund

o A significant reduction in the number and nature of criminal offenses that would disqualify a person from applying

What does this bill do for people who have been convicted of marijuana offenses in the past?

The bill allows most people with marijuana convictions on their records to apply to have those offenses expunged by a court. (Line 1321)

In general, the expungement provision would apply to anything previously considered a crime that is made legal by the bill, namely offenses connected to the possession and sale of marijuana.

Marijuana convictions attached to violent felonies would not be eligible for expungement, neither would crimes for larger-scale marijuana trafficking or sale of marijuana to minors.

Why are there more retailers and cultivation facilities than in the previous bill?

More access to the legal marijuana market means more opportunity for Delaware entrepreneurs, especially those from communities that have been disproportionately impacted by marijuana prohibition.

Legislators, community advocates and business leaders agreed it was important to increase the total number of licenses available in the state to better promote local small business ownership, address the legacy of inequity, and provide greater diversity of product and consumer choice in the market.

How many retailers will there be and where will they be located?

The bill allows for up to 30 retail licenses to be issued within 16 months of the bill's effective date, half of which will be awarded to Social Equity Applicants.

The competitive scoring process used to award those licenses requires the commissioner to take into account geographic distribution of those retailers. After two years from the effective date of the bill, the commissioner has the power to issue additional licenses to meet demand either statewide or in a specific geographic area. (line 859)

How many jobs will this create?

The quality of the jobs created is more important than the raw number.

The competitive licensing process would use a scoring system that rewards applicants that promise to pay a living wage, provide employer-paid health insurance, provide sick and paid leave to workers, hire more full-time workers, focus on diversity of workforce, and other factors. (line 512)

The licensing process also will favor applicants with plans to generate jobs for surrounding communities most negatively impacted by marijuana prohibition.

What is a Microbusiness?

Microbusinesses are a new licensing classification outlined in the latest version of the bill to promote local ownership and small business participation in the state's recreational marijuana market. (line 812)

These applicants must be at least 51% owned and controlled by individuals who have resided in Delaware for 5 of the last 10 years. In addition to having their own license pool for Cultivation and Product Manufacturing licenses, they will have a reduced application fee.

How will this bill address driving under the influence of marijuana?

The same laws will still apply.

It has been and would remain illegal to consume marijuana in a motor vehicle and to drive a vehicle under the influence of marijuana. Motorists would still be subject to existing laws related to driving under the influence of marijuana or the consumption of cannabis in a motor vehicle (line 196).

According to the bill, the only legal way to possess marijuana in a vehicle would be in sealed packaging not readily accessible to anyone in the vehicle (line 187). A violation of this law is subject to a $50 civil citation.

The bill does not change the existing portion of Delaware Code that already states it is "illegal for a person's blood to contain any amount of illicit or illegal drugs within four hours of driving due to the consumption of an illicit or recreational drug prior to or during driving."

If marijuana is legal, how will officers enforce the DUI law?

Nothing in this legislation would change any of the long-accepted DUI enforcement practices employed by police officers to keep motorists safe. (line 219)

Just like today, if an officer suspects a driver is under the influence of marijuana, the officer may place that person under arrest. The same standards that must be met for a

person to be arrested for suspicion of driving under the influence of marijuana today will still apply.

Just as they have always done, officers would be able to stop a motorist who is driving erratically and make an arrest based on compelling evidence, including the presence of paraphernalia and the odor of marijuana, and may test the driver's motor skills using standard field sobriety tests.

Will it be legal to consume marijuana in public?

No, nothing in the bill changes any laws prohibiting public consumption of marijuana, nor are there any alterations to the Clean Indoor Air Act that would allow for indoor smoking or vaping of marijuana outside of private residences. (line 197)

Can private property owners ban marijuana on their premises?

Yes, owners of private property such as hospitals, offices, hotels, restaurants, retail establishments, entertainment venues and the like are permitted to bar possession and consumption of marijuana on their premises.

Residential landlords could still prohibit the smoking of marijuana in rented dwellings. (line 230)

Can an employer restrict an employee's ability to consume legal marijuana? Can they fire an employee they suspect is under the influence of marijuana at work?

Yes, Delaware is and will remain an at-will employment state, meaning employers will have the same rights to hire and fire employees as they do today.

Employers would still be able to administer drug tests for marijuana, enforce zero-tolerance policies, and discipline workers for being under the influence while on the job. And, of course, they will be able to prohibit the consumption of marijuana at work. (line 205)

Can my town ban the establishment of marijuana businesses?

Yes. The bill allows municipalities to prohibit the operation of marijuana facilities within their borders through local ordinances. (line 866)

Cities with a population of 50,000 or more also may limit sales on Sunday to a maximum of four hours and may set closing hours earlier than provided for by state law. (line 280)

Residents of the state's municipalities also will have the ability to demand additional transparency and other considerations. People who live or own property within one mile of a proposed marijuana business location may petition the commissioner's office. If at least 10 petitions are received, the commissioner may grant a hearing on the license application. (line 414)

What does the bill do to protect children from being exposed to marijuana?

The bill sets the age to purchase and consume legal marijuana at 21, placing it on the same threshold as alcohol. It would be unlawful for an individual under the age of 21 to knowingly enter or remain in a marijuana establishment. (line 182)

The bill also gives the Marijuana Commissioner broad powers to regulate the sale and packaging of marijuana to keep it out of the hands of children and ensure it is not marketed to minors, such as:

o Setting standard requirements for opaque, child-resistant packaging designed to be difficult for children under 5 years of age to open. (line 572)

o Prohibiting edibles in the shape of candy and cartoon characters, as well as prohibiting additives designed to make the product more appealing to children. (line 582)

o Placing restrictions on advertising, marketing, signage of marijuana, including mass-marketing that have a high likelihood of reaching minors. (line 591)

The commissioner also has broad authority to deny licenses for marijuana establishments that would be located near schools, churches and colleges.

Will Delawareans be able to grow their own marijuana at home?

Home marijuana cultivation is not allowed under this bill.

Why is Delaware Alcohol and Tobacco Enforcement the best agency to take on the administration of marijuana legalization?

Timing: The bill gives the state 10 months to prepare for recreational marijuana (promulgating of regulations, hiring a Commissioner, preparing and hiring personnel, equipment purchases).

Reputation: DATE has already established a reputation for being responsive and professional. Additionally, avoiding the creation of a new bureaucracy will help eliminate public perception of an increase to the size of government.

Smoother Implementation: DATE is an accredited law enforcement agency with established policies and procedures, eliminating need to reinvent the wheel. The proposed

legislation calls for a tiered system, similar to what DATE agents currently work with. DATE agents also work in a uniformed and undercover capacity routinely and can easily transfer those skills over to marijuana investigations for administrative and criminal purposes. (Bill creates new chapter (Chapter 13) in Title 4 of Delaware Code under Alcoholic Liquors.)

Fewer Costs Generally: Fewer new positions would be needed to properly staff a new marijuana unit within DATE rather than creating an entirely new division. A new division also would require significant startup costs for office and technological infrastructure, which would not be required under this bill.

Fewer Start Up Costs: o DATE has sufficient space in its existing facility to accommodate new staff. o Essential security features for the building and evidence room are already in place, and the evidence room only needs to be expanded. o The Salesforce system can be modified instead of completely creating a new program for a new Division.

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