Gov. Meyer vetoes bill to relax marijuana zoning

August 29, 2025 13

DOVER — Many marijuana dispensaries across the state are still waiting for clarity on where they can open after Gov. Matt Meyer vetoed a bill that would loosen local restrictions that have already blocked those businesses from opening for months.

Meyer issued one of his first vetoes on Senate Bill 75. The bill would have overruled county and local land use regulations, many of which had been created to stop marijuana stores, cultivators, processors and other businesses from opening in neighborhoods. In the past year, counties and towns have passed local laws that outline where marijuana businesses could open, ultimately resulting in some places blocking dispensaries and other facilities entirely.

Instead of signing SB 75, Meyer proposed his own legislation. In a draft bill attached to a letter to veto, Meyer offered to designate 4.5% of the state’s 15% sales tax on marijuana to municipalities and counties. Medical marijuana is not taxed.

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James Brobyn, the president of the Delaware Cannabis Industry Association, said he wasn’t surprised. He was, however, frustrated.

“What’s at stake for the small businesses is that they’re not going to have any surety, which makes it nearly impossible to bring in capital. If they don’t get it done by November, a lot of them are going to have a hard time finding capital until the spring.”

“We have to get the retailers up. It’s the only way we’re going to get more choice in the market and be more consistent for businesses and tax revenues,” he added.

Delaware decriminalized marijuana and set up a system for 125 licenses to be issued in 2023. An analysis of the market by MariMed suggests that Delaware’s recreational market today is valued at $200 million.

But several roadblocks, such as land use regulations, made it impossible for many to open up shop for retail sales until Aug. 1. Even then, only those who were already allowed to sell medicinal marijuana could convert their licenses.

Part of the issue was that many towns and counties imposed tight regulations that limited where these businesses could open, if at all. Sussex County in particular imposed such tight restrictions that only a handful of properties could permit marijuana retail stores.

SB 75 was meant as a solution to this issue, but many critics worried it would set a precedent for the state government intervening in local issues.

Local tax share

Meyer later told reporters at a press conference on Friday that he preferred to find a reason for local officials to welcome these businesses, hence the 4.5% of the state’s sales tax on marijuana. That would offset costs of zoning, permitting, enforcement and infrastructure.

“Our commitment is to make sure there’s a safe, legal market and I’ve retained that from day one. I think local governments play a critical role in doing just that,” Meyer said. “The decision of where stores like dispensaries should go, should be in the hands of the local government.”

The veto was met with backlash from SB 75’s sponsor Sen. Trey Pardee. He claimed that he struck a deal with Meyer’s staff to allow the bill to pass without his signature and Pardee would, in turn, support a move to share the state tax with the local governments.

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“Matt’s decision will do irreparable harm to dozens of small business owners, who successfully won the lottery to open retail marijuana stores and grow facilities. Now, they have virtually nowhere to open their stores and facilities, and Sussex County will essentially become a ‘dry county,’” Pardee said in a prepared statement.

Meyer told reporters he had a deal with Pardee and “no idea” about a handshake deal with a member of his staff.

Rep. Ed Osienski (D-Newark) told DBT he was very frustrated about the veto on SB 75, as he was anxious to see the market officially open for business. He did acknowledge that when he was asked to co-sponsor the bill it would be perceived as the state was “stepping over” the local officials.

“But I think they took it a little too far,” he said, referring to the local regulators. “All the state benefits from this industry, we’ll have tax revenues. Nobody’s given me a good reason why this industry would require municipalities or even counties to spend additional money.”

Osienski, who was one of the driving legislators to decriminalize marijuana in the first place, also pushed back on sharing additional tax revenue with municipalities. He pointed to alcohol and tobacco tax which funds the General Fund and is then spent on various agencies, volunteer firefighters and various issues across the state through the Grant-in-Aid bill.

“The marijuana tax is bringing more in our coffers means more we have to give to counties and municipalities and all agencies and volunteer firefighters. Do they want to ban it or keep it very limited, or do they just want tax revenue,” he said.

Already a ‘tight market’

When asked about a potential veto override, Meyer said if it mattered to legislators, they would come together and override it. Veto overrides are uncommon in Delaware, although one succeeded just last year over a panel on state employee benefits. It was the first time in more than 45 years such an override succeeded.

Meanwhile, those who hold the marijuana licenses will continue to wait. The roll-out of the recreational market has been bumpy, with issues on background check laws and finding banks willing to work with an industry that is still illegal on a federal level.

Brobyn, who owns the Field Supply dispensary chain and who’s been helping entrepreneurs set up their business in Delaware, said the longer the state waits on the issue, the harder it will be for small businesses and the state to compete with New Jersey and Maryland.

“I’ve been doing this for eight years in various capacities, and I’ve built some track record so that I am fortunate to be able to go to some funders and be able to bring capital in. None of these businesses have any track record. Cannabis is not where it was in 2018. People are not throwing money at this, it’s a very tight market,” he said.