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Marijuana funding approved by finance committee

Sam HautGovernment, Headlines

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The Joint Finance Committee approved funding for marijuana regulation following legalization.

During the mark-up of the state’s operating budget Tuesday, the Joint Finance Committee approved $4.1 million to pay for regulation of a new marijuana industry in Delaware, including 28 new state jobs.

Of the $4.1 million allocated, $2.2 million is expected to be ongoing funding and $1.9 million is expected to be for one-time costs, as provided by the bills that passed in April legalizing marijuana and creating a state-regulated and taxed industry.

Sen. Eric Buckson, R-Dover, argued that adding more employees will cost the state more money that it may or may not recoup in the future.

“It’s going to start out to be – I don’t know – $4 million, and then we’re going to eventually lead to where we’re making money and paying that back and making money,” Buckson said. “But we’re adding, I don’t know, maybe 30-plus employee positions, that doesn’t equal more?”

Sen. Trey Paradee, co-chair of the Senate Finance Committee, responded that the upfront cost is necessary.

“The anticipation is once this program eventually gets up and running, depending on whose estimates you believe, it will at some point be generating somewhere perhaps in the neighborhood of $30 to $40 million,” Pardee said.

Related Story: Marijuana legal in Delaware Sunday; Carney won’t sign, veto

The state is supposed to start granting licenses within 18 months.

Rep. Ed Osienski, D-Brookside, said in a press release that once funding is fully allocated, they can start to get the marijuana industry going in Delaware.

“Now, the real work begins with getting this new industry off the ground, and that starts by providing the funds to establish the regulatory infrastructure within state government,” Osienski said. “I’m grateful to JFC for fulfilling its pledge and moving our effort forward. These funds will come back to Delaware several times over in new, good-paying jobs and tax revenue, while also ending the prohibition against marijuana.”

The committee approved 28 new positions in various departments.

In the Department of Finance under the new marijuana law, seven new full-time positions were added and an additional $163,500 from the general fund.

In the Department of Health and Social Services, they added six new full-time investigator positions and an additional $116,700 from the general fund.

In the Department of Safety and Homeland Security, they added 14 new full-time positions and an additional $1,162,900, and an additional $200,000 for rent and utilities to expand the Division of Alcohol and Tobacco Enforcement to accommodate the new marijuana division. 

In the Department of Agriculture, they added one agricultural specialist and an additional $21,300 from the general fund for that position. 

The Division of Alcohol and Tobacco Enforcement will also create a separate, administrative Office of Marijuana Control Commissioner within the Department of Safety and Homeland Security. 

Under the new marijuana law, up to 30 retail licenses will be issued within 16 months of the bill’s effective date and a 15% marijuana control enforcement fee is assessed at the point of sale.

Of those 30 licenses, half will be social equity licenses given to businesses that are majority owned by either people who have been convicted of certain marijuana offenses or are from areas that have had high amounts of arrests and convictions for marijuana.

The general assembly will have to approve the full budget once it makes its way out of the Joint Finance Committee.

Those opposed to the legalization have pointed out that revenues are sure to be lower than expected since nearby states Maryland, New Jersey, Virginia and New York also have legalized adult recreational cannabis.

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