New Castle County Council Considers Local Marijuana Tax— But Do They Understand The Market?

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The New Castle County Council Finance Committee is asking the Delaware General Assembly to authorize a local tax on recreational marijuana sales, citing the need to support public safety and community workforce programs.

In a discussion during Tuesday’s finance committee meeting, councilmembers reviewed Resolution 25-070, which calls on state legislators to allow the county to impose a local tax of up to 5% on retail marijuana purchases.

Councilman Kevin Caneco, who introduced the measure, said the proposal is modeled after similar local taxes on lodging and justified by the county’s role in land use planning and public safety oversight related to cannabis retail operations.

“We feel that it’ll be beneficial since we do a lot of the work that goes into the land use planning, our public safety department planning into this,” Caneco said. “It would be beneficial for us to be able to raise revenue off this.”

He noted a recent fiscal analysis projected the tax could generate as much as $6.5 million annually for the county. 

“All this resolution does is give us the ability to go down to Dover and say and speak on behalf of county council and say, this is what we want to do,” he added.

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While the proposed tax rate is capped at 5%, Caneco emphasized the county is open to negotiating a lower rate; “We made the language careful to say that it could be up to 5%. So we’re not asking for 5% directly… we could say 3%, 2 %, 4 %, whatever that may be.”

Councilwoman Janet Kilpatrick, who co-sponsored the resolution, said part of the goal is to earmark funds for specific programs.

“It would be obviously to public safety because that’s the group we believed would take the biggest hit on having to answer calls,” she said. Additional revenue, she explained, could be used to restore funding for job training initiatives that once operated at the Hope Center and other locations.

Kilpatrick said the resolution also reflects a broader strategy to aid communities impacted by drug-related issues. 

“We could mix a lot of these things together to help some of these disadvantaged neighborhoods come back to what they were at one point,” she said.

Councilmembers also debated whether a new tax could put Delaware businesses at a competitive disadvantage. Council member Brandon Toole noted that a medical marijuana distributor he contacted said the current 15% state tax is already burdensome.

“He’s 10 minutes away from Elkton,” Toole said, “and in Elkton, you can buy an eighth for less than $32. With medical marijuana today, an eighth in Delaware costs you around $50.”

Public comment on the resolution included strong opposition from Emily Wilkins, vice president of First State Compassion, a medical cannabis provider.

“We vehemently oppose this extra tax,” Wilkins said. “If we apply another 5%, people are going to continue to either use the illicit market or cross state lines.”

She added that the regulated cannabis industry already faces steep taxes and competition from nearby states. “We currently are expecting the 15%, which will match Maryland’s rate of tax,” she said.

The resolution does not impose the tax directly, but if passed, it would formally request state lawmakers to grant New Castle County the authority to do so. A vote on the measure is expected at a future full council session.

Tax talks expose Council’s unease with cannabis industry

Tuesday’s discussion revealed a disconnect between New Castle County lawmakers and the cannabis industry they are attempting to regulate, with several councilmembers openly struggling to understand basic marijuana terms, pricing, and policy implications.

Councilman Toole admitted he was just beginning to learn about marijuana while preparing the resolution.

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“I learned about what an eighth is and what an ounce is today,” he said. “I didn’t know any of that stuff until I started looking into it today.” 

Adding to the confusion was Councilman George Smiley,  who dismissed concerns over cross-border cannabis sales with a vague anecdote. 

“When I was 18, I had to go to Maryland to get my liquor, and it didn’t hurt the industry here,” he said. “So let them go there to get their pot.” 

Councilman J.P. Street also noted his concerns, stating his firm opposition to legalization and framing marijuana as a direct path to more dangerous drug use. 

“They know for a fact, scientifically, that 90 percent or more of heroin addicts and heavy drug addicts’ initial drug of choice is marijuana,” Street said. “Now we’re the new drug dealers. And I don’t like being complicit with it.”

Street added that while he believes marijuana retail will strain public services and require additional policing, he was still torn about supporting a tax that he views as legitimizing the drug trade. “I just really don’t like being a part of drug dealing, period.”

Street is referring to cannabis often being the first substance, along with alcohol and tobacco, that a person will likely encounter, but most people who use or have used cannabis do not go on to use other substances later in life.

Research actually indicates that the progression from prescription opioid misuse is a more prevalent pathway to heroin use. According to the National Institute on Drug Abuse, nearly 80% of heroin users reported using prescription opioids prior to heroin.

The tone of the discussion suggests that some county leaders remain uncomfortable with marijuana’s presence in NCC, regardless of its legal status.

“}]] WILMINGTON – The New Castle County Council Finance Committee is asking the Delaware General Assembly to authorize a local tax on recreational marijuana sales, citing the need to support public safety and community workforce programs.  Read More  

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