A bill to legalize marijuana in Delaware failed to pass the House of Representatives on Thursday, even though a majority of members voted for it.
Two House committees had previously advanced the reform proposal from Rep. Ed Osienski (D) in recent weeks, but it was ultimately defeated by the full chamber in a vote of 23 representatives in support and 14 against, failing to reach the required 3/5 supermajority to advance to the Senate.
The legislation would have allowed adults 21 and older to purchase and possess up to one ounce of cannabis, including up to five grams of cannabis concentrates. Home cultivation and marijuana delivery services would not have been prohibited.
“In the past two years, we have listened to the concerns from communities that have for decades been negatively impacted by the prohibition of marijuana, to try to undo some of the harm done,” Osienski said in closing remarks before the vote.
Under the legislation, a marijuana commissioner under the state Division of Alcohol and Tobacco Enforcement would have regulated the industry and overseen licensing of retailers, cultivators, manufacturers and laboratories. Licenses would have been granted through a scored, competitive process, with advantages given to those who pay workers a living wage, provide health insurance or meet certain other benchmarks.
Before the final vote, members rejected a number of amendments to add restrictions, impose penalties for certain activities and limit licensing opportunities for social equity applicants with certain prior cannabis convictions.
However, an amendment was attached that would have ensured the the legalization law would not “impact or impose requirements on employers with respect to terms and conditions of employment including but not limited to accommodation, policies, or discipline.”
It wasn’t enough to get the bill past the goal line, however.
An earlier legalization bill from Osienski cleared committee last year. However, disagreements over social equity provisions stalled that version, keeping it from the floor. At the time, Osienski pledged to bring a revised bill for the 2022 session that could earn broad enough support to pass.
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There were equity components included in this latest measure. After 19 months of the bill’s enactment, for example, regulators would have needed to approve 30 retailer licenses, half of which would go to social equity applicants. Social equity applicants would be defined as entities majority-owned by people with past cannabis convictions or who live in an area disproportionately impacted by the drug war.
Those applications would have also been allotted one-third of the planned 60 cultivation licenses, one-third of manufacturing licenses and two of five licenses for testing laboratories. They could also have qualified for reduced application and licensing fees as well as technical assistance from the state.
Retail marijuana sales would have been subject to a 15 percent tax. No tax would have been levied on medical cannabis sales.
Seven percent of the tax revenue would have been used to support a new Justice Reinvestment Fund that would have provided grants, services and other initiatives that focus on issues such as jail diversion, workforce development and technical assistance for people in communities that are economically disadvantaged and disproportionately impacted by the drug war. The money would also have been used to help facilitate expungements.
When Osienski’s earlier bill was being considered last year, a similar equity fund provision was included, and the sponsor said he was caught off guard when he was informed that its inclusion meant the bill would require 75 percent of legislators in the chamber to approve it.
The lawmaker tried to address the problem through an amendment, but some members of the Black Caucus opposed the changes, and the measure failed.
The current bill still required a supermajority threshold in each chamber to pass, but a smaller one of 60 percent.
Osienski has worked with the Black Caucus in the ensuing months to build support and move toward more passable legislation. And a clear sign of the progress is that Reps. Rae Moore (D) and Nnamdi Chukwuocha (D) have already signed on as cosponsors to the new bill after pulling their support for the 2021 version over equity concerns.
In 2019, Osienski was the chief sponsor of a legalization bill that cleared a House committee but did not advance through the full chamber. That bill would have allowed medical cannabis dispensaries to begin selling marijuana to adults 21 and older while the rest of the adult-use industry was still preparing to launch, a provision that was removed from later versions.
Four of the state’s six medical marijuana companies came out publicly against that change and testified in opposition to last year’s bill. In response, Delaware activists mounted a boycott against those operators.
Portions of the bill on expungements were removed in committee this session, as they were made redundant by the enactment of separate legislation last year.
Individual municipalities would have been able to establish their own regulations for marijuana business operating times and locations, and they would have also been allowed to ban cannabis companies altogether from their jurisdiction.
An amendment from the bill’s sponsor was adopted by the House on Thursday that would have provided explicit legal protections for state employees who work with the state-legal market and imposed a fee on cannabis cultivators that’s based on the size of the grow operation.
It would have further given the Department of Homeland Security responsibilities with respect of license refunds, as the agency already does for the alcohol industry. Then there was some clarifying language about “certain civil penalties” and “costs and expenses that will be covered out of the Marijuana Regulation Fund.”
The amendment proposed to create “a state tax deduction for marijuana establishment business expenses for pass-through entities comparable to the one already in the bill for corporations” and exempts marijuana taxes paid from calculations of the gross receipts tax,” among other technical changes.
As supportive lawmakers have worked to push the bill through the legislature, they also faced the challenge of winning over Gov. John Carney (D), one of the rare Democratic governors who remain opposed to legalization.
Despite his wariness about adult-use legalization, Carney did sign two pieces of marijuana expungement legislation in recent years. In 2017 and 2018, a state task force met to discuss issues related to legalization, and the governor hosted a series of roundtable meetings about cannabis.
A legalization bill previously received majority support on the House floor in 2018, but it failed to receive the supermajority needed to pass.
Carney’s predecessor approved a measure to decriminalize simple possession of cannabis in 2015.
An analysis from State Auditor Kathy McGuiness (D) released last year found that Delaware could generate upwards of $43 million annually in revenue from regulating marijuana and imposing a 20 percent excise tax. The legal market could also create more than 1,000 new jobs over five years if the policy is enacted, according to the report.
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