Delaware Marijuana Business

What is the Demand for Marijuana in Delaware?

With recreational cannabis only recently legalized and sales not expected to begin until 2024, cannabis demands in Delaware can only be legally fulfilled at compassion centers licensed by the Delaware Office of Medical Marijuana (OMM). The medical cannabis legalization law in Delaware allows patients and their caregivers to possess up to 170 grams of cannabis per time.

Although the first compassion center in the state opened in 2015, the OMM still issued 325 new patient cards in the 2015 fiscal year, a 164% increase over the 2014 fiscal year. Additionally, 50 previously issued medical marijuana patient cards were renewed, representing a 416% increase in renewals over the previous fiscal year. Also, medical marijuana card applications increased 127% over the figure recorded in the 2014 fiscal year. The revenue generated by the state was $3,500, $44,320, and $92,900 for fiscal years 2013, 2014, and 2015 respectively — a large portion of these figures accrued from license bidding fees and license renewal fees.

In the 2018 fiscal year, the total program applications increased by 85% to the previous year as the OMM issued 6,625 registration cards compared to the 3,588 in the 2017 fiscal year. The patient population continued its steady increase of 104%, the caregiver population increased by 64%, and participation in the pediatric program increased by 90%. The state generated $524,321 in the 2018 fiscal year and $418,985 in the previous fiscal year.

In the 2019 fiscal year, total medical program applications increased to 12,045, with revenue also crossing the $850,000 mark. In the 2021 fiscal year, applications for enrollment in the Delaware medical marijuana program increased to 20,574. That year, revenue from the program crossed the one-million-dollar mark for the first time, with a total of $1,099,878 accruing to the state. That figure represented an over 80% increase from the $610,255 revenue in the fiscal year 2020. Note that in 2021, the state also increased the number of medical marijuana business licenses from three to six. Hence, six compassion centers or medical marijuana dispensaries attended to the marijuana demands of qualified patients in the state in that year.

According to the Delaware Medical Marijuana Annual Report, about 15,500 medical marijuana cards were issued in 2022 - a 23% increase over the 12,600 cards issued in the previous year. In 2022, medical cannabis sales in the state were estimated at $45.8 million, compared to $37.3 million in 2021 and $27.7 million in 2020.

Demand for cannabis in Delaware will increase in the coming years as the adult-use cannabis market is currently undergoing set up. According to a special report by the Delaware State Auditor published in 2021, thel adult-use market in Delaware is estimated at $215 million, with more than $43 generated in annual tax revenue.

How is Marijuana Taxed in Delaware?

There are no taxes related to medical cannabis in Delaware. However, the state has placed a 15% tax on recreational marijuana products when sales begin in 2024. According to HB 2, 7% of the tax revenue must be allocated to the Justice Reinvestment Fund, managed by the Department of Justice and used for initiatives to enhance the quality of life for communities most impacted by marijuana prohibition and the "war on drugs" policies.

What is the Agency Taxing Marijuana Business in Delaware?

Under HB 2, the Delaware Department of Finance has been tasked with administering the funds from the tax revenue generated from recreational cannabis sales. The state Department of Finance can be contacted at:

Office of the Secretary

Carvel State Office Building

820 North French Street, 8th Floor

Wilmington, Delaware 19801

Phone: (302) 577-8987

Fax: (302) 577-8982

The department has offices in other Delaware locations. See the contact information page of the agency's website for more details on contacting the agency.