Delaware Governor Matt Meyer has vetoed a measure that aimed to loosen restrictions on where cannabis businesses can open, a move that may slow down the state’s newly launched recreational cannabis market.
Instead of the bill, Meyer put forward his own proposal that ties zoning reforms to revenue-sharing. His draft proposal would give counties and cities a portion of cannabis sales tax revenue in exchange for relaxing zoning rules.
The vetoed measure, SB 75, would have struck down stricter zoning rules adopted by county governments after legalization passed. Opposition to the bill was strong among state Republicans and county officials, who argued that it undermined local authority.
In his veto message, Meyer said he supports creating a safe and fair marijuana market but criticized the bill for removing local control without offering support in return.
The bill’s sponsor, Senator Trey Paradee, criticized Meyer’s move, stating that the governor had promised to sign the bill into law in exchange for his support of a future revenue-sharing plan. Paradee argued that breaking that agreement harms trust and damages the chances of cooperation in the future. He also warned that dozens of entrepreneurs who recently won licenses to open dispensaries and grow operations could face serious setbacks.
Over 100 license holders are waiting to open new dispensaries, grow sites, and testing facilities. Many applicants were waiting for the outcome of SB 75, which would have reduced restrictive buffer zones. In Sussex County, for instance, marijuana shops must currently be located at least three miles away from schools, churches, and other sensitive areas.
For now, only the medical cannabis dispensaries that were already operating have been able to expand into recreational sales as of August 1.
Representative Ed Osienski, a top legalization advocate and co-sponsor of SB 75, said he was disappointed by Meyer’s stance. He questioned why cannabis should be treated differently from alcohol or tobacco, since counties do not directly receive tax revenue from those industries. Currently, tax dollars from the two flow into Delaware’s General Fund, with counties receiving a share each year through state grants.
Lawmakers could attempt to override the governor’s veto, though such actions are extremely rare in Delaware. SB 75 cleared both chambers by the three-fifths margin needed, leaving no room for defections. Still, Democrats recently gained a new member in the House, which may provide a slim cushion.
Meyer’s competing measure would direct 4.5% of the state’s 15% cannabis sales tax to the county or city where a cannabis business is located to help offset costs like enforcement, infrastructure, and zoning. Since 7% of the sales tax is already earmarked for a Justice Reinvestment Fund, only 8% of the total revenue would remain for the state and local governments to divide under Meyer’s plan.
If adopted, Sussex County leaders have indicated they may ease some of their restrictions, though the exact details remain unclear.
Industry actors from around the region, such as Cresco Labs Inc. (CSE: CL) (OTCQX: CRLBF), will be hoping that some consensus is reached so that a workable policy that balances the interests of the industry with the need to protect sensitive sections of the population, such as school locations, is enacted.
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