Politics
Delaware’s First Year Of Legal Marijuana Sales Badly Underperformed Regulators’ Lofty Projections
“If we just open stores without more growers online, we’re going to see prices spike, and I don’t think anybody wants to see that.”
By Julia Merola and Ella Walker, Spotlight Delaware
In 2024, Delaware’s new marijuana regulators granted Louise Shelton two social-equity licenses to grow cannabis for the state’s fledgling recreational market.
The licenses were designed to help people who came from areas hardest hit by marijuana prohibition. But two years later, Shelton has not been able to open a cultivation site, and says she may abandon her venture this fall if she can’t find investors for the startup.
Shelton recounts a frustrating two-year experience—marked by institutional delays and bad-faith outside consultants—that she said has left her plans at a standstill.
After receiving her licenses, Shelton was approached by individuals who presented themselves as investors, she said. It was a welcome development for her social-equity endeavor where outside financing is often essential.
But later, Shelton learned that the investors had no money, and instead wanted her to hire them as consultants.
“It was frustrating to say the least because last year we could have been doing fundraisers or something,” she said.
While the details of Shelton’s story are unique, the end result has become common across Delaware’s new recreational marijuana industry. In the two years since licenses were granted—and one year since legal sales began—the industry has failed to meet early expectations.
The only retail businesses that are operating are those shops that converted from selling medicinal marijuana to recreational.
Of the cultivation licensees, four have begun operations. And only one of 20 social equity licensees for cultivation has become active, said Keila Montalvo, spokeswoman for the Delaware Office of the Marijuana Commissioner.
Also highlighting the underwhelming launch of the recreational marijuana industry is the $53.4 million in revenue it generated in its first year, which officially began August 1, 2025.
According to the state’s marijuana tax rate, that translates to just over $8 million for the state government.
Prior to the start of recreational sales, Delaware’s first marijuana commissioner, Robert Coupe, predicted the state would see $281 million in sales during the industry’s first year.
James Brobyn, president of the Delaware Cannabis Industry Association, attributed the shortfall to a slew of structural issues in the state.
He pointed to struggles with raising capital, similar to what Shelton has faced. And he noted there is limited access to usable real estate for marijuana businesses. Those limits stem from restrictive local zoning laws, as well as from an outsize number of properties being owned by banks, which do not do business with marijuana businesses, he said.
Still, Brobyn said it is disingenuous to call the industry underperforming.
He said roadblocks are coming from state and county leaders who are “ignoring” or “fighting against” the industry, even as residents broadly support the safe cannabis sales.
“There’s not a lot of interest in collaborating with the industry and helping move this thing forward in a positive way,” he said.
Delaware’s top marijuana regulator largely agreed that the industry’s launch has been slow, but said the state’s priorities go beyond the immediate opening of new storefronts.
Delaware Marijuana Commissioner Joshua Sanderlin noted the industry faced two years of pushback from officials at the city, county, and state levels, but said the first year of legal marijuana in Delaware was meant to establish more cultivation sites.
“If we just open stores without more growers online, we’re going to see prices spike, and I don’t think anybody wants to see that,” he said.
Sanderlin also said he had hoped to see higher sales numbers, but said “until we can get more stores open, that number is going to be kind of low.”
To help individuals operate their businesses, Sanderlin’s office will partner with the Delaware Technical Community College and provide business owner classes for current licensees.
A new shop coming to Georgetown
While shop openings have stalled, Sanderlin said that will change by the end of the summer when a new storefront opens in Georgetown.
It will follow a series of policies enacted in recent years to regulate the new industry. Those included revisions to the key state law that made recreational sales legal.
The law permitted municipalities to prohibit marijuana businesses from their jurisdictions and gave counties broad authority to dictate where shops could locate. It has led to a third of Delaware towns and cities outright prohibiting marijuana shops.
Sanderlin said the biggest delay for licensees within the last year were caused by difficulties of finding eligible properties to open storefronts because of limitations from local governments.
“I’ve heard from several of my licensees that you know they have found locations now, and they have already put in requests for zoning verification from the counties,” Sanderlin said.
Last year, Sanderlin’s boss, Gov. Matt Meyer (D), vetoed Senate Bill 75, which would loosen zoning regulations around the state’s marijuana industry.
Lawmakers responded during the early-morning hours of July 1, when they voted to override the veto.
Sussex County leaders respond to an ongoing fight
Although the veto override has benefited licensees seeking to open businesses in areas, such as Georgetown, Sussex County leaders say it is another overstep from Dover.
Two Sussex County councilmembers—Jane Gruenebaum and Steve McCarron—told Spotlight Delaware the decision of where marijuana can be sold is a local issue.
“This is just one more example of the state and up north really trying to have an influence on what’s going on in Sussex,” McCarron said.
Gruenebaum also said “the point” of their frustration is not whether localities can override the state, but that where products are sold should be a matter of local control.
Last year, Sussex County lowered the barriers on some of its zoning for recreational marijuana stores, including removing some conditional use requirements and lowering the buffer distance from town limits from 3 miles to half a mile.
But even after those changes, the county’s zoning was still restrictive, due primarily to its retention of 3-mile buffers to “sensitive places” like schools, parks, substance abuse treatment centers and, crucially, churches. The sheer prevalence of the latter in Sussex County made building a new project virtually impossible.
Senate Bill 75 no longer allows churches to be included as a “sensitive place” and lowers all allowable buffers to 500 feet.
McCarron said the shortened buffer defeats the purpose of letting towns decide where and if they want marijuana shops.
This story was first published by Spotlight Delaware.
