Marijuana Commissioner warns of predatory practices as social equity validation deadline approaches

As legislators were crafting the bill that legalized recreational marijuana, one important consideration was creating a social equity license program.

Through this program, those disproportionately affected by marijuana prohibition have the opportunity to apply for business licenses at a 40% discounted rate.

Social equity licenses are available to individuals who have been arrested for a marijuana-related crime or have lived in a disproportionately impacted area for five of the past 10 years.

Disproportionately impacted areas include regions in Delaware where there were high rates of marijuana-related arrests or convictions before recreational use was legalized.

The tracts identified by the Office of the Marijuana Commissioner (OMC) as disproportionately impacted can be found here.

OMC hosted four social equity workshops in June where potential applicants learned about how banking, legal and insurance practices factor into the marijuana business.

“The interaction from the attendees, the questions they had, was very reassuring that people are engaged in this process, and they’re taking it [seriously],” said Marijuana Commissioner Rob Coupe.

But Coupe warns of predatory practices from out-of-state entities potentially trying to trick social equity license applicants into paying for help to secure a license.

“If someone is going to consider using a consultant, they should research that, and they should also consult with legal counsel before they sign any agreement,” he said.

Social equity licensees must retain 51% ownership, and Coupe says the remaining 49% stake in a business is up to the social equity license holder, but he encourages licensees to seek guidance to ensure they are not being taken advantage of.

“We knew this was a possibility and we’re seeing it, so we want to make sure that the community knows that we are not endorsing any consultants.”

Applicants have until July 15, 2024, to submit a Social Equity Eligibility Validation Form to see if they qualify and will then have a shot at 47 available licenses.