The Delaware House of Representatives has approved a bill to create regulations for adult-use marijuana sales, sending it to the Senate just days after passing a complementary possession legalization measure.
The chamber cleared the regulatory legislation from Rep. Ed Osienski (D)—which advanced through two committees before reaching the floor—in a 27-13 vote.
“It has been a long journey to get to this point,” the sponsor said on the floor on Thursday. “We have experienced setbacks along the way—none worse than losing business to New Jersey—and we have learned a great deal and produced what we believe is a strong bill that will make Delaware an industry leader in this field.”
“In the past five years, we have listened to concerns from communities that have, for decades, been negatively impacted by the prohibition of marijuana to try to undo some of the harm done and ensure that these same communities will benefit from the new legal market,” he added.
Osienski is sponsoring both the simple legalization bill, HB 1, and this sales measure, HB 2.
The Senate Health & Social Services Committee is scheduled to take up the two proposals on Wednesday, according to Sen. Sarah McBride (D), who chairs the panel.
We’ve waited too long for this policy. I’m ready for us to act quickly. https://t.co/CornrcEGE9
— Sen. Sarah McBride (@SarahEMcBride) March 10, 2023
The House sponsor took a similar, bifurcated approach for the reform last session and saw the legislature pass the basic legalization proposal while narrowly defeating the regulatory measure. Gov. John Carney (D) vetoed the former legislation, and the House didn’t have to votes for an override.
Osienski told 47 ABC News that if the governor seeks to veto the legislation again this time, he’s “optimistic” and feels “pretty good” that they have the votes for an override.
“I think my colleagues are saying, ‘OK, you know, you had one shot at vetoing this, you did and you were successful, but don’t count on us supporting that veto again,'” he said.
The simple legalization bill cleared the House this week with more than enough votes to override a potential veto.
House Speaker Peter Schwartzkopf (D) was among the minority who voted against that modest reform, both last session and this session. But while he opposes legalization, he kept his promise to back the sales measure if legalization ultimately passed because he wants there to be regulations if cannabis prohibition is repealed.
Here’s what the HB 1 legalization bill would accomplish:
State statute would be revised to legalize the possession, use, sharing and purchasing of up to one ounce of cannabis for adults 21 and older.
To avoid abuses of the “gifting” provision, the bill stipulates that “adult sharing” would not include giving away cannabis “contemporaneously with another reciprocal transaction between the same parties” such as an exchange of a non-marijuana item.
Public consumption and growing cannabis would remain prohibited.
People under 21 who engage in such activity would be subject to a civil penalty of up to $100 for a first offense. Police could use discretion and issue a citation in lieu of that fine, however.
Here’s an overview of the key provisions of the HB 2 regulatory bill:
The legislation would provide a basic framework to create a regulated system of cannabis commerce for adults in the state.
The Division of Alcohol and Tobacco Enforcement (DATE) would be responsible for regulating the market through a new Office of Marijuana Control Commissioner.
For the first 16 months of implementation, regulators could approve up to 30 cannabis retail licenses.
Applicants who show that they’d provide a living wage, health insurance coverage, sick and paid leave and focus on diversity in hiring would be prioritized in the licensing scoring process.
Seven percent of marijuana business fee revenue would go to a “Justice Reinvestment Fund” that supports restorative justice, workforce development, technical assistance for economically disadvantaged people and more.
That fund would also go toward “creating or developing technology to assist with the restoration of civil rights and expungement of criminal records.” However, the legislation itself doesn’t provide for automatic expungements.
In additional to conventional retail, cultivator, manufacturer and laboratory licenses, the bill would additional provide for social equity and microbusiness licenses (reserved for applicants with majority ownership by Delaware residents).
Localities would be able to prohibit marijuana businesses from operating in their area through ordinance.
Adult-use marijuana sales would be subject to a 15 percent sales tax. Medical cannabis products would not be taxed.
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“With each passing year, it becomes clearer that Delawareans are strongly in favor of establishing a safe, legal market for adult recreational marijuana,” Osienski said. “We have heard from numerous members of the public—advocates, veterans, retired law enforcement officers, educators and even faith leaders—who have overwhelmingly voiced support for this proposal. Neighboring states have endorsed legal cannabis, including Maryland last year.”
Ahead of the floor vote on HB 2 on Thursday, members adopted a technical amendment that Osienski filed that had been “requested by the Office of the Governor,” according to a synopsis. It’s unclear whether the governor’s input can be interpreted to mean he sees a scenario where he might end up supporting the bill, or at least not veto it, or if it’s more a case of trying to tighten up the specifics of legislation even if he continues to vehemently oppose it.
Members also adopted a separate amendment from the sponsor to add language stipulating that employers wouldn’t be required to revise workplace cannabis policies upon legalization and that the state Division of Revenue would be given the authority to set rules concerning the manner and form of tax payments for marijuana.
The amendment also shifts administrative responsibility for the Justice Reinvestment Fund from the state Department of Justice to the Criminal Justice Council. It further requires the governor-appointed marijuana commissioner to submit quarterly reports to the legislature on implementation progress.
Advocates are increasingly optimistic about the legislation’s prospects given that last year’s election added more progressive lawmakers to the legislature. Regional developments, with surrounding states enacting legalization, are also putting pressure on Delaware lawmakers.
Because the regulatory bill includes tax components, it requires a three-fifths majority of lawmakers to approve it. The basic legalization measure only needs a simple majority.
Osienski made the calculated decision to break up the measures in the previous session after an earlier proposal that included both components was rejected in the House because it failed to reach the three-fifths vote requirement.
Separately, in October, Carney vetoed a more narrowly tailored bill that would have clarified that medical marijuana patients are not prohibited from buying, possessing or transferring firearms under state law
A strong majority of Delaware voters support legalizing marijuana—including nearly three in four Democrats who back the reform that the state’s Democratic governor vetoed last year, according to a poll released that month.
Photo courtesy of Chris Wallis // Side Pocket Images.