A bill to legalize marijuana in Delaware cleared its first legislative hurdle on Wednesday, advancing out of the House Health and Human Development Committee on a 10-4 vote.
The legislation is sponsored by Rep. Ed Osienski (D), who introduced a similar proposal last year. The Health and Human Development Committee approved last year’s measure, too, but it ultimately stalled ahead of an expected floor vote due to disagreements over social equity provisions. At the time, Osienski pledged to bring a revised bill for the 2022 session that could earn broad enough support to pass.
Osienski said at the hearing that the proposal would “create good-paying jobs for Delawareans while striking a blow against the criminal element which profits from the thriving illegal market in our state.”
Rep. Paul Baumbach (D), a cosponsor of both the current and past versions of the legalization bill, thanked Osienski for his efforts to tweak and strengthen the bill over time.
“You’ve listened so much to so many concerns,” he said, “and you and the staff have incorporated so many of the best ideas there are for this matter.”
Pending signatures, the Marijuana Control Act (HB 305) will be released from the Health Committee.
Appreciate everyone who provided comment on the bill. It's past time to get this done. It's clear the public broadly supports this legislation.
— David Bentz (@DaveBentz) January 26, 2022
One of the few vocal opponents to the bill at Wednesday’s hearing was Rep. Charles S. Postles Jr. (R), who said he didn’t “believe in either extreme, that of legalization or of excessive punitiveness” and worried that legalization would send a message to kids that cannabis use is safe. “We’re talking about the government telling our young people, ‘This stuff is fine. Go do it.'”
The bill, HB 305, would allow adults 21 and older to purchase and possess up to one ounce of cannabis, including up to five grams of cannabis concentrates. Growing marijuana at home, as well as home delivery by licensed businesses, would be prohibited.
A marijuana commissioner under the state Division of Alcohol and Tobacco Enforcement would regulate the industry and oversee licensing of retailers, cultivators, manufacturers and laboratories. Licenses would be granted through a scored, competitive process, with advantages given to those who pay workers a living wage, provide health insurance or meet certain other benchmarks.
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Efforts at social equity are built into the licensing scheme. After 19 months of the bill’s enactment, for example, regulators would have to approve 30 retailer licenses, half of which would go to social equity applicants. Social equity applicants—defined as entities majority-owned by people with past cannabis convictions or who live in an area disproportionately impacted by the drug war—would also be allotted one-third of the planned 60 cultivation licenses, one-third of manufacturing licenses and two of five licenses for testing laboratories.
Equity applicants would also qualify for reduced application and licensing fees as well as technical assistance from the state.
Retail sales of cannabis would be subject to a 15 percent excise tax, which would not be applied to medical marijuana products.
Of the tax revenue, 7 percent would go to a new Justice Reinvestment Fund, which would support grants, services and other initiatives that focus on issues such as jail diversion, workforce development and technical assistance for people in communities that are economically disadvantaged and disproportionately impacted by the drug war. The money would also be used to help facilitate expungements, according to a summary from the advocacy group Marijuana Policy Project (MPP).
When Osienski’s earlier bill was being considered last year, a similar equity fund provision was included, and the sponsor said he was caught off guard when he was informed that its inclusion meant the bill would require 75 percent of legislators in the chamber to approve it.
Osienski attempted to address the problem through an amendment, but some members of the Black Caucus opposed the changes, and the measure failed.
The current bill will still require a supermajority threshold to pass, but a smaller one of 60 percent.
Osienski has worked with the Black Caucus in the ensuing months to build support and move toward more passable legislation. And a clear sign of the progress is that Reps. Rae Moore (D) and Nnamdi Chukwuocha (D) have already signed on as cosponsors to the new bill after pulling their support for the 2021 version over equity concerns.
Chukwoucha said at Wednesday’s hearing that he believed past versions of the bill fell short on addressing past injustice against people of color. The current version, he said, does better.
“We spoke about the harms in communities and [how] individuals who look like me are four times more likely to be arrested for marijuana offenses, but we didn’t really see redress in the bill,” Chukwoucha said. He thanked Osienski for working with stakeholders to address those concerns.
In 2019, Osienski was the chief sponsor of a legalization bill that cleared a House committee but did not advance through the full chamber. That bill would have allowed medical cannabis dispensaries to begin selling marijuana to adults 21 and older while the rest of the adult-use industry was still preparing to launch, a provision that was removed from later versions.
Four of the state’s six medical marijuana companies came out publicly against that change and testified in opposition to last year’s bill. In response, Delaware activists mounted a boycott against those operators.
During public testimony on Wednesday, a representative from a subsidiary of one multi-state dispensary operator, Columbia Care, said the group supports the bill.
Representatives from various state agencies, meanwhile, raised worries about some of the bill’s provisions and encouraged changes to the plan. The Department of Health and Social Services, for example, urged investment in substance use disorder treatment programs and public awareness campaigns about the risks of cannabis use. A Department of Agriculture representative called for outdoor cannabis cultivation to be forbidden, among other changes.
The Department of Finance, meanwhile, said that while the bill addressed some of the department’s past concerns, it would nevertheless create problems for administrators handling tax collection and other transactions, especially because much of the cannabis industry relies on cash.
Osienski said at the beginning of the hearing that he was expecting the agency pushback after Gov. John Carney’s (D) office sent him a list of concerns on Tuesday afternoon. “I want to reassure you that we have met in the past with these agencies,” he said, “and we will continue to meet with them to address these concerns.”
Advocates cheered the decision to advance the bill.
“The House Human Development committee’s approval of HB 305 today is the first step towards bringing equitable legalization to the state this year,” Olivia Naugle, senior policy analyst for Marijuana Policy Project, told Marijuana Moment on Wednesday. “Delaware has the opportunity to join 18 other states and DC that have legalized cannabis for adults—including their neighbor, New Jersey. It is past time for the legislature to listen to their constituents and meet the moment.”
Several modest amendments that were filed when last year’s bill was being considered have been incorporated into the new measure. Those include provisions related to quality control standardization, accreditation for marijuana testing facilities and packaging and labeling requirements.
Portions of the bill on expungements were also removed, as they were made redundant by the enactment of separate legislation last year.
Individual municipalities would be able to establish their own regulations for marijuana business operating times and locations, and they would also be able to ban cannabis companies altogether from their jurisdiction.
As supportive lawmakers work to push the bill through the legislature, they also face the challenge of winning over Carney, one of the rare Democratic governors who remain opposed to legalization.
Despite his wariness about adult-use legalization, Carney did sign two pieces of marijuana expungement legislation in recent years. In 2017 and 2018, a state task force met to discuss issues related to legalization, and the governor hosted a series of roundtable meetings about cannabis.
A legalization bill previously received majority support on the House floor in 2018, but it failed to receive the supermajority needed to pass.
Carney’s predecessor approved a measure to decriminalize simple possession of cannabis in 2015.
An analysis from State Auditor Kathy McGuiness (D) released last year found that Delaware could generate upwards of $43 million annually in revenue from regulating marijuana and imposing a 20 percent excise tax. The legal market could also create more than 1,000 new jobs over five years if the policy is enacted, according to the report.