From Medical to Recreational Weed: Grow Your Cannabis Cultivation Business in Delaware

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Contributor, Benzinga
June 1, 2023

Delaware's cannabis industry is undergoing a shift, transitioning from a medical-focused market to a fully legalized recreational one. As the demand for cannabis rises, entrepreneurs and cultivators can seize the opportunity to establish and expand their cultivation businesses in the state. Read on to discover how you can navigate the path to success as Delaware's recreational weed industry evolves and capitalize on the immense potential of indoor cannabis cultivation.

Understanding Medical Marijuana, Recreational Weed and Cultivation Licenses in Delaware

A companion bill establishing a comprehensive regulatory framework and allocating 125 licenses for various cannabis operations, including cultivation, product manufacturing, testing and retail sales, recently went into effect. It should be noted that licenses will not be granted for over a year, allowing sufficient time for the implementation of the regulatory structure. People interested in reviewing the precise legal provisions can read the legalization-only bill and the regulatory bill on the General Assembly’s website.

These bills achieved overwhelming support in both the House and Senate, marking a significant milestone in the tireless efforts of legalization advocates who have championed the cause for nearly a decade. 

Gov. John Carney, who previously opposed the legalization bill and vetoed it last year, decided last week not to veto the bills this time, allowing them to become law without his signature. This signifies a significant shift in the state's stance on cannabis and starts a new era of legal cannabis in Delaware.

Within 15 months of the bill's effective date, a marijuana commissioner appointed by the governor will be responsible for issuing 60 cultivation licenses. The licenses will be divided into two tiers, with one-third reserved for social equity applicants in each tier. The tier classification will be based on the size of the cultivation facilities — specifically, whether they are less than or greater than 2,500 square feet for indoor facilities or 1 acre for outdoor facilities. No cultivation facility will be permitted to exceed 12,500 square feet indoors or 7.5 acres outdoors.


Within 16 months of the effective date, the commissioner will issue 30 manufacturing facility licenses, with 10 allocated for social equity applicants and 10 for micro businesses.

By 19 months after the effective date, the commissioner will issue 30 retail licenses, out of which 15 will be reserved for social equity applicants.

The bill also stipulates a 15% excise tax on cannabis sales at retail. Of the total tax revenue generated each month, 7% will be allocated to the state’s Justice Reinvestment Fund. The fund will be responsible for administering grants, contracts, services or initiatives related to justice reform.

These provisions outline the timeline and distribution of licenses in different sectors of the cannabis industry as well as the taxation structure and the allocation of funds for justice-related initiatives.

The licenses will incur a fee of $10,000 every two years.

Why You Should Expand Your Cultivation Business in Delaware

Expanding your cultivation business in Delaware offers numerous advantages and exciting prospects. Below are a few reasons to choose Delaware. 

1. Growing Regulatory Support

Delaware's commitment to creating a regulated marijuana industry provides cultivators with a favorable regulatory environment. With the state actively allocating resources and positions to ensure successful implementation, cultivators can have confidence in the stability and support offered by the government.

2. Market Potential

As Delaware paves the way for a state-licensed and regulated marijuana industry, the market potential is significant. With the growing acceptance of cannabis and increasing demand from both medical and recreational users, cultivators can tap into a thriving market and benefit from a growing customer base.

3. Financial Prospects

Expanding your cultivation business in Delaware offers promising financial prospects. As the industry evolves and matures, cultivators can experience substantial profitability. The combination of a regulated market, growing demand and the opportunity to establish a strong market presence positions cultivators for long-term financial success.

4. Job Creation and Economic Impact

The establishment of a state-licensed cannabis industry in Delaware will contribute to job creation and economic growth. The industry will require a diverse workforce, ranging from cultivation experts to support staff and provide employment opportunities within the community, bolstering the local economy.

5. Collaborative Community

Delaware's emerging cannabis industry has fostered a collaborative and supportive community. Cultivators can benefit from networking opportunities, knowledge sharing, and partnerships with other industry professionals. This sense of community can help cultivators navigate challenges, share best practices and collectively contribute to the growth and success of the industry.

5 Tips for Expanding Your Indoor Cultivation in Delaware

As you consider expanding your indoor cultivation business in Delaware's recreational weed market, here are some valuable tips to maximize your potential for success.

Tip 1: Implement Efficient Indoor Growing Techniques

To expand your cultivation business, it is crucial to implement efficient indoor growing techniques. Optimize your cultivation space by using advanced lighting systems, climate control technology and hydroponic or aeroponic systems. By maximizing yield and creating an ideal environment for plant growth, you can increase productivity and meet the growing demand for high-quality cannabis products.

Tip 2: Embrace Compliance and Regulatory Standards

Compliance with regulations is vital for expanding your indoor cultivation business in Delaware's recreational weed market. Stay informed about the state's licensing requirements, security protocols and product testing regulations. Adhering to these standards ensures legal compliance and builds trust with consumers and authorities. Implement robust record-keeping processes and quality-control measures to maintain compliance throughout your operations.

Tip 3: Explore Funding Opportunities

Expanding your indoor cultivation business requires adequate funding. In Delaware, you can explore various funding opportunities available for cannabis entrepreneurs. Consider reaching out to cannabis lenders, private investors, venture capital firms specializing in the cannabis industry or exploring state-sponsored programs that support cannabis businesses. Develop a comprehensive business plan and financial projections to present to potential investors and demonstrate the potential return on investment.

Tip 4: Develop Strategic Partnerships

Collaborating with strategic partners can be instrumental in expanding your recreational cultivation business in Delaware. Seek out partnerships with local dispensaries, manufacturers or distribution networks to create a streamlined supply chain and reach a broader customer base. Collaborating with experienced industry players can provide access to expertise, distribution channels and marketing opportunities, helping you accelerate growth and market penetration.

Tip 5: Prioritize Branding and Marketing

In a competitive market, building a strong brand and effective marketing strategy is essential. Develop a unique brand identity that resonates with your target audience. Use digital marketing channels, social media platforms and educational content to raise awareness, engage with consumers and establish your brand as a trusted and reliable source of premium cannabis products. Implement customer loyalty programs and participate in local events to foster brand loyalty and community engagement.

License and Facility Costs for Cannabis Cultivation Businesses in Delaware

Expanding your indoor cannabis cultivation business in Delaware involves various costs that need to be considered. Because cannabis is still illegal on a federal level, banks are unable to offer loans for cannabis businesses, no matter how great the potential for success is. 

Specialized cannabis lenders offer cannabis businesses a variety of loan options, including real estate loans and equipment financing. 

Below are some of the expenses associated with growing cannabis indoors, focusing on real estate as a significant factor.

1. Real Estate Costs

Expect to allocate approximately $50,000 for annual warehouse rent. This cost will vary depending on the location and size of the facility.

Setting up the cultivation space requires initial investments for buildout and improvements. Plan for an estimated cost of $60,000 to create the necessary infrastructure, including lighting systems, irrigation, security and other essential components.

2. Equipment 

You'll need various equipment to support the growth and production of your plants. 

Grow Lights 

Crucial for providing the necessary light spectrum to promote plant growth during the cultivation process. Depending on your cultivation area and the type of lights you choose, such as high-pressure sodium (HPS) or light-emitting diodes (LEDs), the costs can vary. 

Timers and Light Controllers 

Essential for automating the lighting schedule in your indoor grow space. They allow you to regulate the amount of light your plants receive, ensuring they get the right photoperiod for each stage of growth.

PH Meters 

Used to measure the acidity or alkalinity of your nutrient solution. Maintaining the proper pH level is crucial for nutrient uptake by the plants. 

Pruners and Trimmers 

Important tools for maintaining the health and appearance of your cannabis plants. Pruning helps remove excess foliage and encourages better airflow, while trimming ensures the removal of unwanted leaves and buds. 

Environmental Control Equipment

Temperature and humidity controllers, carbon dioxide (CO2) generators or controllers, dehumidifiers and air circulation systems. 

3. Inventory

Expanding your indoor cannabis cultivation business also entails managing your inventory.

Seeds or Clones

You'll need to source high-quality cannabis seeds or clones to begin your cultivation process. Seeds can be purchased from reputable seed banks, while clones are genetically identical cuttings from a mother plant. The cost of seeds or clones depends on the strain, genetics and supplier.

Growing Medium

Choose a suitable growing medium, such as soil, coco coir or hydroponic systems, depending on your cultivation method. The cost of growing mediums can vary, so factor this into your budget.

Nutrients and Supplements

Cannabis plants require a balanced nutrient regimen throughout their growth cycle. Invest in quality nutrient solutions designed specifically for cannabis cultivation. Additionally, supplements like beneficial microbes, root stimulants and bloom boosters can enhance plant health and productivity.

Pest Control

To protect your plants from pests and diseases, invest in effective pest control measures. This may include organic or chemical-based pesticides, insect traps or beneficial insects for biological pest control.

4. Professional and Personnel Costs 

Maintaining a secure facility is crucial for compliance and safeguarding your cultivation operation. This may include installing surveillance cameras, alarm systems, access control measures and hiring security personnel. The cost will depend on the size of your facility and the level of security required.

As your business grows, you may need to hire additional staff to manage various aspects of your cultivation operation. This can include cultivation technicians, trimmers, managers and administrative personnel. Consider the salaries or wages, benefits and training costs associated with your workforce.

5. Financing Costs

Setting up a cannabis cultivation business may require financial support from a private bank or credit union. If you secure a loan or financing, there will be associated costs to consider.

Loan Payments

If you take out a loan to fund your expansion, you'll need to account for monthly loan payments. The amount will depend on the loan amount, interest rate and repayment term. Ensure that you factor in this cost when budgeting for your overall business expenses.

Interest and Fees

Private banks or credit unions may charge interest and fees on loans or financing options. These costs can vary depending on the financial institution and the terms of the loan agreement. Be sure to carefully review and understand the terms and conditions, including any associated costs.

6. Other Operating Costs

Indoor cultivation requires significant energy for lighting, ventilation and other equipment. Plan for higher electricity bills resulting from increased energy consumption. The cost varies depending on the size of your warehouse but usually ranges from $600 to $1,200 per month. 

You'll also need to consider the cost of water used for irrigation and maintaining plant health.

As a cannabis business, you'll be subject to taxes and licensing fees imposed by state and local authorities. These can include cultivation taxes, sales taxes and licensing renewal fees. Consult with a tax professional to understand your tax obligations and budget accordingly.

Protecting your cultivation business with comprehensive insurance coverage is essential. This can include property insurance, general liability insurance, crop insurance and worker's compensation insurance. The cost of insurance depends on factors such as the size of your operation and coverage limits.

Seizing Opportunities in the Recreational Market

Delaware's transition to a fully legalized recreational cannabis market presents an exciting opportunity for entrepreneurs to own and expand their cannabis cultivation business. With the perks of year-round production and multiple harvests, owning an indoor cultivation business in Delaware can be financially rewarding. 

Specialized lenders can provide tailored financial solutions to support your expansion efforts. Seize the chance to thrive in this evolving market by leveraging the state’s favorable laws, exploring available resources and partnering with specialized lenders.

Frequently Asked Questions


Is recreational weed legal in Delaware?


Delaware has legalized recreational weed, making a shift from a medical-focused market to a fully legalized recreational one. While cultivator licenses are not currently available, they are expected to be in the near future.


How much does it cost to expand recreational cultivation in Delaware?


The cost of expanding recreational cultivation in Delaware varies depending on several factors. These include the size of the operation, equipment expenses, real estate costs and personnel requirements. It’s essential to carefully assess these aspects and create a comprehensive budget for your expansion plans.


How much can you make owning an indoor cannabis grow in Delaware?


The amount you can make owning an indoor cannabis grow in Delaware can vary. Factors include the size of your operation, the demand in the market, the quality of your products and your ability to effectively manage the business. Conducting thorough market research and financial analysis will help you estimate potential revenues and gauge profitability.