Delaware House Passes Historic Cannabis Legalization Bill

The Delaware House of Representatives passed legislation in early May to allow adults over 21 to possess up to an ounce of marijuana. Local media in the state indicated this was a historic first step in cannabis legalization. The bill passed the House by 26 to 14, an important milestone because any legalization effort would require three-fifths of the House to pass. The bill was bipartisan. Two Republican representatives – Michael Smith and Jeffrey Spiegelman — also voted for the bill.

The latest bill comes after an earlier bill did not pass the House. That bill only garnered 23 yes votes, not enough to meet the three-fifths requirement, even though Democrats held the majority in the House. The previous bill also sought to establish a state-regulated cannabis industry. After the failure of that bill, legislators decided to write two bills, one to decriminalize possession and another to create a market in Delaware for adult-use cannabis. The decriminalization bill was successful.

A Delaware cannabis regulation and taxes cleared a House subcommittee, but no vote has been scheduled. A vote is predicted in the next few weeks. But the vote to decriminalize possession is a big deal in Delaware that will create opportunities to develop a cannabis market. New Jersey has decriminalized cannabis, and they share a border with Delaware. Virginia has also decriminalized adult-use marijuana, and it is also geographically close. So these states have an opportunity to collect cannabis taxes from citizens of Delaware, depending upon how they write their cannabis market regulations. Most states that have created cannabis markets enjoy considerable tax revenue from the market.

The decriminalization bill combined with the market creation bill – HB 305 — that did not pass had regulations for cultivating, manufacturing, and selling cannabis in Delaware, and it also had a tax schedule. Because of the proposed taxes, it required 25 votes to pass the House, a threshold it could not meet. The bill’s lead sponsor, Ed Osienski, felt he could move the decriminalization forward with a simple majority of 21 – the same number of co-sponsors of the bill.

However, the Democratic governor of Delaware, John Carney, is very skeptical regarding cannabis legislation and has indicated he might sign any bill passed. Carney has listened to parents of children who overdosed, and they indicate the pathway to hard drugs started, almost always, with marijuana. Carney indicated Attack Addiction advocates he has talked to do not feel that decriminalizing cannabis is a good idea.

In Carney’s analysis, other states that have decriminalized and created cannabis markets have found it has not been a positive thing for the strength of their communities and economy in their states. If Carney does choose to veto the decriminalization bit, those supporting decriminalization need only 26 votes to override the veto or one more ‘yes’ vote than they received passing the bill in early May.

Delaware has proposed that legislation should sharply increase the cost of marijuana sales licenses. HB 371 removes penalties for adults’ possession of up to a single ounce of marijuana, and HB 372 legalizes and regulates an adult-use cannabis market. The bills will be considered by the House separately. But the state seeks a significant increase in license fees. Policy advisors and the governor’s office proposed a major change in the bill to increase the cost of adult-use cannabis licenses. Opponents of the price increases insist would decrease the chances for success of the legal market and therefore boost the illicit marijuana industry in the state. In addition, “corporate marijuana would get a boost by limiting the number of smaller dispensaries that could sell weed.

The bills’ typical opponents, AAA, the medical community, and a few law enforcement departments, have not been as critical. Instead, lobbyists from medical marijuana companies already in operation have pressed for more favorable treatment. For example, House Bill 372 calls for some licenses for smaller businesses. They also prohibit applicants who have been convicted of non-violent weed possession offenses.

The illegal marijuana trade is thriving in California because violent Mexican cartels are illegally growing the weed and sometimes cultivating it on public land. High taxes have been cited as one reason for the success of this industry.

Some who oppose the increased cannabis sales license fees point out that alcohol sales licenses don’t have hefty fees. Alcohol licenses are modestly priced in Delaware. Many cannabis entrepreneurs are advocates for social equity measures. They believe the opportunity in the cannabis market will help those who had a marijuana possession or sales conviction. The fee increase defeats the purpose of these measures.

Increasing the cost of an adult-use cannabis business license is an anomaly compared to the cost of licenses for alcohol businesses. It would create a costly, unnecessary barrier to entry that would prevent some Delaware small business entrepreneurs from being able to participate in the legal market.

The license increase in cost would only be passed off to consumers, which would increase the cost of legal cannabis, like what is currently happening with the medical cannabis market here in Delaware.  “The legal marijuana market should be affordable and competitive with the current illicit market and the prices charged in other legal states. New Jersey opened their legal adult-use market on April 21, 2022

Voters in the Garden State passed legalization through a ballot initiative in 2020. Delaware does not have the initiative in its Constitution.

The mythology of “4/20” as a street name for marijuana continues to proliferate. Some insist the designation comes from the police code for marijuana, but that seems unlikely because not all police jurisdictions use the same codes. Some insist the holiday designation is based on stories of teens in California smoking weed each day at 4:20 p.m. That morphed into smoke-ins on April 20th. Whatever the derivation, it is a term that is likely to persist in an environment of increasing decriminalization and market development.

 

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