By Omar Sacirbey
The race for Delaware’s two remaining medical marijuana licenses is heating up, but it’s hard to say exactly how hot it will get.
Nearly 50 executives, professionals and entrepreneurs representing 29 entities attended a “pre-bid” meeting in Wilmington, the state’s largest city, this week.
Delaware officials held the meeting to cover some ground rules of the licensing and application process, as well as answer questions from those in attendance.
The meeting – which was mandatory for those who want to apply for a license to grow and sell MMJ in Delaware – attracted both industry newcomers and veterans. The latter group included representatives from Columbia Care, which has medical cannabis operations in five states and Washington DC, as well as Raj Mukherji, a New Jersey assemblyman who is also the CEO of a dispensary in his state.
Most of the attendees were Delaware residents, but a small number were from other areas.
The state previously authorized up to three dispensaries but has awarded just one license to date. Dispensary owners have the option of operating their own cultivation facility or buying their cannabis from a licensed grower in the state.
The application deadline for the remaining two licenses is March 30, and winners will be announced in August.
Despite the relatively high turnout at the meeting, many of those in attendance might not actually move forward with an application.
When Delaware held a pre-bid meeting in 2013 for potential applicants seeking the state’s first license, 22 entities were represented, but only seven eventually applied.
Mark Lally – owner of First State Compassion Center in Wilmington, which won Delaware’s first license – said he thinks the same trend will play out this time around. Lally was at the meeting earlier this week, as he plans to apply for the other licenses as well.
“As you listen to the questions that people were asking (at the meeting), it was pretty obvious that some people really want to get into this industry but have no knowledge of the industry,” Lally said.
Under Delaware’s medical marijuana program, each of the state’s three counties – New Castle, Kent and Sussex – will get one dispensary. Lally opened his dispensary in New Castle County, where 59% of the state’s 936,000 residents live.
As of Feb. 1, 876 medical marijuana patients were registered with the program, according to the state’s health department.
Chapman Dickerson, a marijuana cultivator involved with two Massachusetts dispensaries, said he’s considering applying in Delaware because his father is a medical marijuana patient in the state. Dickerson also thinks he can grow better medicine than what is currently being cultivated by First State.
But he was also critical of the Delaware program.
“It’s a little restrictive, and patient access is an issue,” said Dickerson, explaining that with only one dispensary in the state, many patients have to drive as long as three hours to get there. “Once you get the other two (dispensaries) online, it’ll be better.”
Lally of First State has said his dispensary has sufficient capacity to supply all of the state’s patients, and that the patient population isn’t big enough to sustain another grow operation.
He also said that startup costs could be prohibitive for new applicants. The application fee is just $5,000, but it costs $40,000 to actually get a license if awarded one.
“It’s a good thing because it allows only serious people…to apply,” Lally said.
Dickerson disagreed, however, pointing to the state’s growing patient numbers. At the same time, because Delaware limits the amount of usable marijuana flower that a cultivator can have on hand to 2,000 ounces, a grow facility doesn’t need to be especially large. Dickerson estimated that he could launch a cultivation site for about $500,000.
“The program in Delaware is not expensive. It really comes down to having the time to put a team together,” said Dickerson, who attended the 2013 pre-bid meeting, but decided not to apply.
Lally said his start-up costs exceeded $1 million.
Courtney Bateman, a Delaware native who relocated to California’s Coachella Valley and co-founded Live High End, a medical cannabis delivery service there, is also thinking about applying, citing what she said was a strong and growing economy. Still, caution was important, she said.
“I think dispensaries in Delaware will need to start small, there is not a huge patient pool, however people are very aware of the positive benefits of holistic health in general,” Bateman said. “The restrictions are a double-edged sword. We love that the state has thought through this proposal so completely yet they have put a lot of the details into our hands to tell and show them the best options for the citizens of Delaware and the cannabis industry.”
Carmen Marra and her mother Leslie, Delaware natives who also attended the meeting, don’t have any marijuana business experience. Carmen Marra said they are interested nonetheless, but she acknowledged they would have to find partners from existing MMJ states who can bring experience to their team.
“You really need to get somebody who knows what they’re doing,” Marra said.
Omar Sacirbey can be reached at omars@mjbizdaily.com
