Delaware’s Adult-Use Cannabis Sales Delayed as FBI Rejects Background Check Application, State Regulators Work to Align with Federal Standards

Delaware’s plan to launch adult-use cannabis sales this spring has been derailed after the FBI rejected the state’s request for a service code to initiate background checks for cannabis licensees, forcing regulators to work with lawmakers to amend the state’s cannabis laws.

FBI’s Rejection of Delaware’s Background Check Application Delays Adult-Use Cannabis Market Rollout and Forces State to Amend Legislation

Delaware cannabis regulators with the Office of the Marijuana Commissioner (OMC) announced on March 31 that the FBI rejected the state’s application for a service code to begin criminal background checks for individuals seeking to participate in the state’s upcoming adult-use cannabis market. The rejection has delayed the start of cannabis sales and sent state officials back to the drawing board.

The service code from the FBI is necessary to run fingerprint-based criminal history checks on applicants, which is required under Delaware’s cannabis laws. The OMC, in collaboration with the State Bureau of Identification (SBI) and the Delaware Department of Justice, had been working to secure the service code for months but encountered a conflict with the federal agency.

FBI Highlights Legal Conflict, Urges Delaware Lawmakers to Draft New Legislation to Meet Federal Standards for Cannabis Background Checks

The FBI’s rejection stems from concerns over the language of Delaware’s cannabis laws, specifically the Title 4 provisions in the Delaware Code. The federal agency requires that the state’s legislation explicitly identify the categories of individuals who need to undergo criminal background checks to avoid overbreadth. As a result, the OMC has been instructed to collaborate with state lawmakers to amend the existing law to meet the FBI’s requirements.

“The FBI advised that Title 4 of the Delaware Code must contain language explicitly identifying the categories of persons required to obtain a background check,” the OMC explained in their announcement. The state is now tasked with drafting new legislation that meets federal guidelines, but it is uncertain when the issue will be resolved. Delaware’s General Assembly is in session until June 30, 2025, and will need to act quickly to avoid further delays.

Delaware’s Cannabis Market Faces Financial Strain as State Lawmakers Work to Address FBI’s Concerns and Resolve Background Check Issues

This setback comes after years of legislative efforts to establish a legal adult-use cannabis market in Delaware. Former Governor John Carney allowed the Delaware Marijuana Control Act to become law in April 2023 without his signature, which laid the groundwork for legalizing adult-use cannabis. However, the current legislative challenges highlight the complexity of aligning state and federal requirements in the rapidly evolving cannabis industry.

State lawmakers had passed follow-up legislation in May 2024, making technical adjustments to the Delaware Marijuana Control Act, including amending Title 4 and Title 30 to mandate fingerprint-based background checks. This legislation was designed to allow adult-use licensees to submit fingerprints to the SBI, which would then request federal criminal history reports from the FBI.

However, the FBI determined that Delaware’s law lacked the necessary specificity, meaning that the state’s legal framework is currently incompatible with the federal agency’s standards, leaving an unknown timeline for adult-use cannabis licensees to begin operations.

FBI’s Involvement in Background Checks Poses Potential Strain on Delaware’s Cannabis Business Plans, Especially for New Licensees Awaiting Approval

The delay has caused significant uncertainty for the 125 adult-use cannabis licensees, including cultivators, manufacturers, testing labs, and social equity operators, who were awarded licenses through lotteries in 2024. Many of these businesses had anticipated starting operations in the spring of 2025, but the delay in securing background checks creates a financial strain, particularly for operators paying rent on facilities without generating revenue.

While the OMC had aimed to launch adult-use sales by spring 2025, the FBI’s decision means that it is unclear when these businesses will be able to operate. Despite this setback, the OMC could still allow adult-use sales to begin via the state’s existing medical cannabis licensees, which operate 13 compassion centers and have already met the necessary federal background check requirements.

Concerns Over Potential First-Mover Advantage for Medical Cannabis Operators as State’s Adult-Use Rollout Remains in Limbo

However, there are concerns about fairness in how the adult-use market is rolled out. Some worry that allowing medical cannabis operators to start adult-use sales while new businesses remain stalled could create an unfair advantage. Zoë Patchell, executive director of the Delaware Cannabis Advocacy Network, voiced her concern, stating that such a move would be fundamentally unfair to those new businesses caught in the limbo caused by the FBI’s rejection.

Patchell emphasized that the existing medical marijuana businesses should not be allowed to start adult-use sales ahead of the new licensees, especially when the delay is due to no fault of their own.

Delaware Lawmakers Earmark Funds for Social Equity Operators as New Legislation Strives to Ensure Fair Market Access Amid Ongoing Delays

Under the new legislation allowing medical cannabis operators to transition to the adult-use market, businesses must pay conversion fees—ranging from $100,000 to $200,000—depending on the type of license. These fees could raise over $4 million, which Delaware lawmakers have earmarked to provide financial assistance to social equity operators, who have faced historical barriers to entering the cannabis industry.

As state lawmakers work to amend the state’s cannabis laws to align with the FBI’s requirements, regulators, operators, and advocates will closely watch the ongoing developments to determine when Delaware’s adult-use cannabis market can officially launch and how the state can ensure equitable access for all involved.