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Last year, when Delaware legalized cannabis, legislators approved the opening of 30 retail cannabis stores across the state. However, despite licenses being expected this year and stores potentially launching by 2025, available locations for shoppers to purchase cannabis legally are declining.
Several cities and towns in the state have used a provision in the legalization law to ban marijuana retail outlets, along with testing, cultivation, and manufacturing facilities. Sussex County has enforced bans in towns such as Bridgeville, Seaford, Millsboro, and Dagsboro. Beach towns like Milton, Rehoboth, South Bethany, Dewey, Bethany, Lewes, Fenwick Island, and Ocean View have also opted out of allowing cannabis businesses.
Additionally, Middletown, Delaware’s fourth-biggest city, has passed a total ban on cannabis businesses, while Newark has made an exception for its Main Street shopping area. Dover, the second-biggest city in the state, is also considering limitations on where marijuana stores can operate.
Sussex County Council is utilizing another legal provision that enables counties to regulate aspects such as the number and location of cannabis businesses. The council has restricted cannabis stores to C3-zoned areas, which are designated for heavy commercial use. However, the law also prohibits any cannabis businesses from being within three miles of municipalities, churches, schools, or drug abuse treatment centers.
This zoning restriction effectively results in a ban on retail marijuana stores in the county since all of the C3-zoned areas are within three miles of restricted areas, leaving no viable locations for these businesses.
Meanwhile, in Wilmington, the mayor’s office issued a statement in September outlining its approach to cannabis businesses. Cannabis entrepreneurs would have little trouble opening their enterprises in different parts of the city if there were no local prohibitions.
The mayor, however, has expressed his intent to restrict cannabis businesses from operating near schools or neighborhoods. The proposal initially sought to ban these businesses within 100 feet of schools or residential areas. Permitted zones would include manufacturing districts, downtown retail areas, and commercial centers. However, the restricted zone was extended by the city’s planning commission to 300 feet, but it will be reviewed again this month before the council makes a final decision.
In New Castle County, the only current restrictions being considered are that cannabis stores cannot operate within 1,000 feet of places like schools, daycare centers, churches, parks, government offices, or drug treatment centers.
State Representative Ed Osienski, who sponsored the cannabis regulatory and legalization bills, has expressed frustration with the actions taken by most local governments. He stated that the original intent of the law was to treat cannabis stores similarly to liquor stores, which are common throughout the state.
Meanwhile, Robert Coupe, Delaware’s cannabis commissioner, has remained focused on processing license applications while staying neutral on the local zoning issues. Coupe acknowledged the difficulties created by these local restrictions, especially in Sussex County, but also noted that New Castle and Kent counties seem to be imposing fewer hurdles for cannabis retailers.
While the situation in Delaware is still very much in flux, industry actors like SNDL Inc. (NASDAQ: SNDL) from around the country that hoped for widespread access to adult-use marijuana products by adults wishing to consume those products could be getting concerned by the restrictive actions of local authorities with regard to potential locations for cannabis businesses.
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