People will continue to try and put businesses where they are financially feasible, correct? Oversaturating a marketplace will not make a business financially viable.
By Brianna Hill, Spotlight Delaware
Delaware’s marijuana commissioner says his office now allows cannabis license holders to apply to transfer permits between the state’s three counties—a move that would allow businesses to move away from heavily regulated localities, such as Sussex County.
Joshua Sanderlin, the Marijuana Commission’s Director of Enforcement in Delaware said that his decision on Monday to grant licenses for all counties was a change from a previous regulation. The move came also after the Sussex County Government and municipalities imposed regulations that limited the number of marijuana shops in the county to a small area.
Senate Bill75, which was passed by the state legislature in June, was a response to this. It sought to limit county ability to regulate cannabis businesses. But last month, Gov. Matt Meyer (D), a Democrat, has vetoed this bill. He stated that the legislation would displace “local land-use authority” without any support or partnership.
Sanderlin stated that his decision to permit license transfers within counties did not come as a result of Meyer’s veto. Sanderlin said that his office decided to alter this rule following requests received from licensees wishing to switch counties.
He said that as a former marijuana industry executive, he knows how hard it can be to launch a new business, regardless of whether SB 75 is in effect or not.
“It’s kind of a point that I’m trying to make… ‘Yes, we’re your regulator, but we’re also here to serve as a partner,'” Sanderlin said.
Sanderlin says it’s still too early to determine how the additional transfer of funds might impact where marijuana-related businesses will ultimately be located. Sanderlin said there might be a shift in the first place towards Kent or New Castle counties.
He still expects that licensees will eventually be spread across the three counties.
Right? “People still will try to place businesses where they are financially viable. He said that if you oversaturate the market, then it is not financially viable.
‘Plenty of places’ to move to?
Last year the state issued licenses to operate for 125 marijuana-related businesses.
Sanderlin explained that the regulations, created by Rob Coupe (the former Delaware marijuana Commissioner), bound business owners to three counties in order to give all of Delaware’s applicants a chance at receiving a licence.
When asked when he decided to make the change, he replied that there wasn’t a specific date. However, it was after the people requested it.
He said, “For me it is ensuring we maintain an open communication line between ourselves and licensees.”
Sanderlin has approved one exception allowing marijuana manufacturers to relocate. It may surprise you to learn that the licensee has moved from New Castle County, Delaware County. This is after finding a good location in Sussex County.
Sanderlin stated that his office would be willing to grant more transfer to businesses who are unable to secure a location within their county but who have a viable plan for a new site and can present it.
Especially in the wake of SB 75’s veto, some licensees feel that changing their county will give them a wider range of locations to choose from.
“If we don’t get a new [Senate] If this option is available, I’d be very interested in moving, as my license is located in the hardest county, said Derro, a Sussex Social Equity Microcultivation Licensee.
New Castle County Councilman Kevin Caneco said that there were “plenty” of locations in the county where a marijuana-related business could be operated under current regulations. Kevin Caneco said, if there are more marijuana licensees in the county, officials would apply current land use regulations.
It’s not that people oppose it. He said, “Again, we’ll regulate via our Land-Use Department as long as it is possible.”
Kent Levy Court officials did not respond to this article.
A compromise?
At the end of last month, Meyer vetoed Senate Bill 75, which would have overridden county-level zoning laws that dictate how far marijuana dispensaries must be from sensitive places like schools, libraries and treatment centers—reducing the buffer to no more than 500 feet.
Sussex County has set a distance of three miles between shops like this and sensitive areas, while New Castle sets a limit of 1,000 feet. Kent County has no buffer zone, but businesses selling marijuana are restricted to commercial zones.
Additionally, more than a third (57) of Delaware’s municipalities have banned various marijuana-related establishments. This makes it very difficult for cannabis business owners to obtain real estate.
Cannabis remains illegal in the United States, so marijuana businesses face a number of challenges, including securing financing, investors and property.
Louise Shelton said, “It is a bit of a problem because we do not have the funds we need, and you all are imposing all these restrictions”, mother to Derro Shelton who has a Sussex social equity microcultivation permit.
“How can you have a cannabis law that says it is for recreational use, yet then include all these conditions?” Shelton asked.
In June of last year, county leaders and Republican statehouse members opposed Senate Bill 75, arguing that the bill was one of a few “local control bills” that overrode local governments’ right to determine their land use, zoning, and other matters.
Meyer suggested a compromise in his statement regarding the veto. He proposed that a quarter of state revenue from marijuana sales taxes be directed to the local county or municipality where the marijuana business was located.
The mayor said that the money would be used to “offset local costs related to zoning and permitting, infrastructure, enforcement, and enforcement.”
Meyer confirmed that Sussex County agreed, if approved, to remove the conditional use requirements for marijuana retail stores, allowing county leaders to have more freedom in deciding where such shops can be located and reducing buffer requirements.
In the proposed county legislation, there is no mention of a reduction.
Sussex County Council met last week and discussed plans to eliminate zoning regulations on marijuana businesses. However, no decisions were made. Councilmembers also applauded Meyer’s decision, which gave counties the power to decide on what to change.
Members of the council defended this rule, comparing it with that used by state laws for alcohol stores. They said that they will still consider any possible changes.
Todd Lawson, the County Administrator of Orange County, expressed concern about state officials overriding Meyer’s veto. He said that the Council hopes to present a proposal “within a few weeks” to modify its restrictions.
Meyer’s veto drew criticism from state senator Trey Paradee, D-Dover. In a press release, Paradee said that he and the governor had made a late-June agreement to split future revenues with counties should Meyer allow SB75 to become law this summer without his signature.
Paradee claimed that the veto “will now cause irreparable harm” to small business owners whose businesses were successful in winning the lottery to start retail marijuana stores or grow facilities.
Some of these licensees are frustrated at the strict regulations on marijuana businesses, such as the father-and-son team of Smith and Shelton.
It’s just one obstacle after another. It’s as if, just when you think you are making progress, you get a new obstacle. Smith said, “Rules changes are another curveball.”
If Sussex does not first relax their buffers, then the transfer of licenses between counties may offer some relief.
Spotlight Delaware published this article first.
Brian Shamblen provided the photo.