Home » Why Regulate » Expanded Summary of HB 110

Expanded Summary of HB 110

State Rep. Helene Keeley introduced HB 110 on March 30, 2017, and it was assigned to the House Revenue and Finance Committee. Because this bill would establish a new tax, it must receive support from two-thirds of the elected members of each chamber before it can be sent to Gov. John Carney. Please see below for details of how the law would operate if implemented.

Possession limit: Adults 21 years of age and older can possess up to one ounce of marijuana, five grams of which can be concentrated cannabis. Adults may also gift one ounce or less to other adults.

Regulatory structure: The Delaware Department of Safety and Homeland Security would oversee the Division of Marijuana Control and Enforcement, which would be charged with enforcing provisions of the law. The Marijuana Commissioner will be appointed by the governor and will have the power to grant and deny licenses, adopt rules and regulations governing control of the program, and hold public hearings on complaints, among other powers. Commissioner decisions can be appealed to the Appeals Commission.

Oversight committee: The Act establishes an Oversight Committee to evaluate the program and make recommendations to lawmakers. It features nine members — designees of various state department agencies as well as appointees by legislators and the governor.

Effective date: The Act will take immediate effect upon passage.

Licensing: The Commissioner will license four types of marijuana businesses: retail shops, testing facilities, cultivation facilities, and manufacturing facilities. The application fee to apply for these licenses will be set by the Commissioner and cannot exceed $5,000. All licenses last for two years and carry a biannual licensing fee of $10,000. Pre-existing medical compassion centers will have the opportunity to apply for licenses before others.

License selection: The Commissioner will use a competitive scoring process to determine which applicants are awarded licenses. This will take into account: experience, training, and expertise; security plans and diversion prevention plans; any criminal, civil, or regulatory issues the applicant and applicant’s officers may have experienced at other entities they have controlled or managed; and the suitability of the proposed location.

Cultivation facility licenses: Ten months after passage, the Commissioner will begin accepting cultivation facility applications. One month later, cultivation licenses will be issued to any existing medical cannabis compassion centers. The remainder of licenses will be issued a month later (a year after passage of the law), bringing the statewide total to 75. Of these, 30 licenses will be for facilities of less than 1,000 square feet, 15 for facilities between 1,001 and 2,500 square feet, 10 for facilities between 2,501 and 7,500 square feet, and no more than 10 for 7,501 square feet or greater. Additional licenses may be issued after two years if there is sufficient demand.

Retail licenses: Ten months after the law passes, pre-existing medical marijuana compassion center license holders can submit an application and fee to the Commissioner for a retail license. The Commissioner will license these entities the following month. By 13 months after passage, the Commissioner will accept applications for other retailers. By 19 months after passage, the Commissioner will have granted a total of 40 retail licenses. After three years, additional licenses may be granted if they are needed to meet demand.

Testing facility licenses: Ten months after the effective date, the Commissioner will start accepting applications. One month later, the Commissioner may issue two licenses. By 20 months after passage, the Commissioner will issue three additional testing licenses for a total of five. If this number of licenses proves insufficient, or should there be fewer than five facilities operating, then the Commissioner may grant additional licenses.

Product manufacturing facility licenses: Twelve months after passage, current compassion centers may submit applications. The Commissioner will issue at least five licenses 14 months after passage, and a total of 20 licenses by 16 months after passage. After two years, additional licenses may be issued.

Penalties: Civil penalties will be created for failure to comply with regulations. Existing criminal law will continue to apply in some instances, except where newly legal conduct is allowed under the Act. New or revised penalties include:

Public consumption: Smoking (including vaporization) in public will be punishable by a civil fine of up to $100.

Consuming in a vehicle: This conduct is punishable by a fine of up to $200.

Underage purchases: People under the age of 21 using fake IDs are subject to an unclassified misdemeanor and a fine between $100‑500. Subsequent violations are punishable by fines between $500‑1,000. Failure to pay fines subjects the person to incarceration.

Underage sales: Selling marijuana to someone under 21 is an unclassified misdemeanor punishable by a fine between $250‑500.

Prohibitions: Public consumption, home cultivation, and consuming marijuana in a moving vehicle are all prohibited.

Employment: This law does not impact employers’ ability to enforce policies restricting marijuana use by employees.

Private property rights: No facilities are required to permit the consumption of cannabis on their property, including employers, schools, hospitals, detention facilities, and corporations. However, a landlord cannot prohibit the possession and consumption of marijuana by a means other than smoking unless certain exceptions apply, including if they would otherwise be in a Catch-22 due to federal licensing or regulations.

Marijuana extracts: Only licensed manufacturers may create marijuana extractions using solvents other than water, glycerin, propylene glycol, vegetable oil, or food-grade ethanol (ethyl alcohol). Further, extractions near an open flame are strictly prohibited, and such conduct can result in a Class G felony conviction, punishable by up to three years of incarceration and a fine of $5,000.

Sale hours: Marijuana cannot be sold on certain holidays, including Thanksgiving, Easter, and Christmas. Further, no sales are allowed between the hours of 1:00 a.m. and 9:00 a.m. Monday through Saturday, and on Sundays before noon or after 8:00 p.m. Retailers seeking to sell on Sundays must pay an additional license fee of $500.

Retailer limits: Retail stores may only sell marijuana, marijuana products and accessories, non-consumables such as apparel, and related products, such as childproof packages. Retailers may not give away any consumable product, including samples. Retailers also may not sell cigarettes (or anything with nicotine), alcohol, or consumables that are not infused with cannabis. Sales may not take place over the internet. Marijuana cannot be delivered to anyone not physically in a store, and marijuana may not be consumed on any licensed premises.

Cultivation requirements: Cultivation facilities must track cannabis from seed to wholesale purchase. Facilities must subject their cannabis to testing and maintain a record of the results of this testing. Cultivation facilities cannot produce marijuana concentrates, tinctures, extracts, or other marijuana products, only manufacturing facilities may do so.

Local control: Any municipal population center of 50,000 people or more can limit sale hours and days of the week and limit the number of establishments. Localities may also prohibit marijuana facilities entirely through the enactment of an ordinance or a measure that appears on a general election ballot. Civil penalties for violations can be established payable to a local regulatory authority. Localities can also establish operating and registration fees for marijuana establishments.

Security: Security regulations will include lighting, physical security, video, and alarm requirements, as well as requirements for transportation and storage, employment trainings, and ID badge creation. Licensees, directors, officers, and applicant shareholders holding more than 10% of outstanding shares may not have any felony convictions unless greater than 10 years old or for conduct legal under the Act. Cultivation facilities and product manufacturers must keep a log of all visitors.

Health and safety: Restrictions and prohibitions will be placed on pesticides and additives. For example, products may not be designed to be more addictive or more appealing to children. Standards will be created for the manufacture of extracts and concentrates. Requirements for random sample testing will ensure quality control and accurately labeled potency. The testing analysis will look for residual solvents, poisons, toxins, harmful chemicals, mold and mildew, filth, microbioals, and pesticides.

Education: Educational materials must be disseminated to consumers who purchase infused products.

Advertising: Restrictions will be imposed on marketing and signage, including the prohibition of mass-market campaigns that have a high likelihood of reaching minors. Marijuana and related products cannot be displayed in a manner visible to the public.

Labeling and packaging: All marijuana must be sealed and conspicuously labeled and include a standard symbol. Packaging must be opaque and child-resistant, “significantly difficult for children under five years of age to open.” Packages must include accurate measurements with no more than 100 milligrams of active THC total per package for liquids. Labels must state the length of time it typically takes for a product to take effect and the amount of THC in the product. A warning label explaining harms of consuming marijuana — including its impact on developing brains — must be included. All ingredients must be listed, including possible allergens, and include a nutritional fact panel.

Grounds for license refusal: Grounds for refusing a license include but are not limited to: if issuing a license in a locality is not in the public interest; there are already sufficient licensed premises in the locality; the applicant is financially irresponsible or has made false statements to the Commissioner; or the applicant, any directors or officers, or any significant shareholders have been convicted of certain crimes (excluding felonies older than 10 years and felonies that would not be considered a crime under this law). Other reasons include “substantial objection” by the community or habitual use of narcotics or alcoholic beverages by the applicant.

Taxation and distribution: The taxation rate is $50 per ounce on marijuana flowers; $25 per immature plant; and $15 per ounce on all other parts of marijuana that are not flowers or immature plants.

Marijuana Regulation Fund: Application and licensing fees, penalties, and taxes imposed by this Act will be directed into the Marijuana Regulation Fund, which will be administered by the Department of Finance.

Funds will be dispersed as follows: First, administrative costs and expenses of the Commissioner and the Division will be covered. Remaining funds will be distributed as follows:

  • 20% to the Department of Education;
  • 10% to the Department of Health and Social Services (DHSS) for distribution to community-based nonprofit organizations to support job placement, mental health treatment, substance use disorder, system navigation services, and legal services to address barriers to re-entry for communities disproportionally affected by past federal and state marijuana prohibition policies;
  • 10% to DHSS for evidence-based voluntary programs for the prevention or treatment of alcohol, tobacco, and marijuana abuse;
  • 10% to DHSS for scientifically and medically accurate public education campaign on the health and safety risks of alcohol, tobacco, and marijuana; and
  • the remainder as determined by the General Assembly.

Existing medical cannabis law: This law is unaffected by HB 110 except that pre-existing medical marijuana licensing for adult use.