Sussex County Rule Blocks State-Approved Medical Marijuana Dispensary Expansion

A Delaware medical marijuana company that received state sign-off to open a new dispensary in southeastern Sussex County has been turned away by county officials, setting off a dispute over a local ordinance that critics say amounts to a ban on retail cannabis.

Jen Stark, whose business The Farm operates dispensaries and indoor grow sites in Kent and New Castle counties and makes edibles and other products in Kent, began looking for a Sussex site about a year ago, after the state said the area could support a medical dispensary. She settled on a former HVAC supply store along U.S. 113 near Frankford, and in February the state Office of Medical Marijuana approved it for the location and expansion of retail operations. Stark also hoped to sell recreational cannabis there under a conversion license that lawmakers authorized in June.

The plan ran into a Sussex County law passed in late May. Relying on a provision in state law that lets counties regulate the time, place, manner and number of marijuana businesses, County Council limited where retail stores may operate. In an Oct. 24 letter, zoning director Jamie Whitehouse rejected The Farm's site because the store was not already "in existence" when the ordinance took effect. The county has four operating medical dispensaries, and Whitehouse approved one of them, the First State Compassion Center location in the Lewes area, as a legal, nonconforming use.

A new applicant would face tougher requirements. Retail stores are confined to the C3 district, which is reserved for heavy commercial use and covers only 0.2 square miles of roughly 900 square miles of unincorporated land. Even within it, a site cannot lie within three miles of any municipality, church, school or substance abuse treatment center. The Delaware Cannabis Advocacy Network's lawyer reviewed the zoning map and concluded the rules leave no eligible location. The Farm's property is zoned C1, which includes hundreds of retail businesses.

Stark said she thought a permit was coming after county officials asked her to obtain clearances from the state Fire Marshal's Office and Department of Transportation. County spokesman Chip Guy said the county never issued a building permit and that a cleared plan review was only an early step. He said the county's due diligence found the site did not qualify. Guy also disputed the claim that no eligible parcels exist in unincorporated Sussex, but he did not identify any or agree to let WHYY News analyze the zoning map.

"We're in a Catch-22," Stark said. "Until the county gives us their approval, we're not allowed to do anything." She has consulted a lawyer and is weighing a move elsewhere in Sussex, possibly within Frankford, which has not banned cannabis stores.

State Rep. Ed Osienski, a Newark Democrat who sponsored the 2023 legalization and regulatory bills, said the ordinance hampers an established business and an industry most residents support, and he predicted it would feed illegal sales. State Sen. Trey Paradee, a Dover Democrat, plans to introduce legislation early next year to override the county's law and to curb the state provision allowing towns to prohibit marijuana businesses outright. Several of Sussex's 25 municipalities, including Rehoboth, Dewey, Bethany, Fenwick Island, Lewes, Seaford and Millsboro, have done so. Paradee said siting should "mirror how we treat liquor stores in this state."

Legal avenues have narrowed. The advocacy network asked Attorney General Kathy Jennings to seek an injunction, but her office said in a letter on Wednesday that it would not file suit and suggested the group sue or pursue changes through regulators or the legislature.

State marijuana commissioner Robert Coupe said his hands are tied while the current law stands. His office will soon issue 30 retail recreational licenses statewide, 10 of them in Sussex, and he said the three-mile buffer "definitely presents challenges" for those applicants, who may need to focus on towns that allow operations.