In Delaware, the Sussex County Council is in the process of designing a zoning ordinance that would regulate where cannabis retailers, manufacturers, cultivators, and testers are allowed to locate their establishments.
Delaware was among the most recent U.S. states to legalize recreational cannabis use last year, though licensing applications on behalf of prospective cannabis businesses in the state will not be considered until later this year. In the meantime, counties and municipalities in the state have had time to determine how exactly they wish to regulate this forthcoming recreational cannabis industry’s operations. Under § 1335 of the scheme’s authorizing statute, the Marijuana Control Act, municipalities are allowed to restrict or even outright prohibit the operations of cannabis retailers, manufacturers, cultivators, and testers within their municipal boundaries, a power many towns in the state have elected to exercise, some citing a desire to maintain a family-friendly reputation as a rationale.
While counties don’t share this broad discretion, they remain empowered to substantially limit the sale and manufacture of cannabis in an indirect way by means of zoning ordinances. The proposal currently being debated by the Sussex County Council would do just this. Under its terms, retail cannabis outlets would only be permitted to set up shop in C-3 (“Heavy Commercial”) zoning districts, which are estimated to make up only 105 acres of the county’s land. Even within these districts, prohibitions on retail stores being located within 3 miles of municipal boundaries, fellow cannabis stores, churches, schools (including post-secondary institutions), and substance abuse treatment centers further compound the accessibility issues posed by the proposed ordinance.
For manufacturing, cultivation, and testing facilities, in contrast, their restriction to A-3 (“Agricultural Residential”) zoning districts is less burdensome, as such districts make up a majority of the county’s land. Additionally, as Delaware has had a medical cannabis program in place since 2011, previously existing medical cannabis outlets that currently operate outside of C-3 districts will be grandfathered into the new framework.
A key contributor to the reluctance among county- and municipal-level governments to expand access to cannabis retail stores seems to be the absence of a financial incentive, as under § 1365 of the Marijuana Control Act, the General Assembly is not required to apportion any of the revenue generated by the state’s 15% sales tax on the cannabis market to municipal governments. Additionally, the Sussex County Planning and Zoning Commission has noted the distance between towns in the sparsely populated county and that they anticipate a relatively small number of licensing applications.
Nonetheless, the county’s proposed zoning scheme would be unusually restrictive in comparison to the approaches taken by other states that have legal cannabis markets, the vast majority of which have adopted buffer zone distances of between 500 and 1000 feet, a fraction of the 3 miles set out in the ordinance. Including fellow cannabis stores as target locations with respect to which this buffer distance applies is also uncommon and has the potential to be particularly problematic in this context given the limited availability of C-3-zoned land in the county.
Cannabis advocates in Delaware have pointed out that most of the zoning rules adopted by municipalities thus far reflect a double standard in relation to how establishments that sell/serve alcohol are regulated. This disparity is especially untenable in light of research indicating positive and negative associations, respectively, between alcohol use and cannabis use and aggressive, disorderly behavior. In recognition of this, in neighboring Maryland, a recently passed legislative bill limited the ability of municipal governments to zone retail cannabis stores more restrictively than alcohol establishments.
The impeded access cannabis users in Sussex county might face under the proposed zoning ordinance enhances further concerns about the continued presence of the state’s cannabis black market. The cannabis users located in this region may feel compelled to turn back to the black market, especially due to the potential inconvenience as to where cannabis can be purchased. If they do so, a key goal of cannabis legalization in Delaware, namely, the promotion of a safe, accessible and regulated market could be undermined.
This potential zoning problem is reflective of the tension that exists between municipal and state-level law making objectives. When states grant complete autonomy to municipalities to roll out the logistics for the cannabis business in their jurisdiction, the reputational and health and safety concerns of the municipality may clash with the goals that state lawmakers envisioned as part of the development of a new cannabis legalization scheme. This tension is something policymakers at all levels of government will continue to grapple with as more states move towards legalization.
By Justin Hovey
(Justin is a 2nd year law student and summer student for CansultED. CansultEd is an alternative dispute resolution company that operates exclusively in the US Cannabis space.)