Delaware’s adult-use cannabis market officially launched on August 1, 2025. For years, operators who had been waiting on licensing, background check approvals, and regulatory framework finally got their green light. If your business is newly licensed, recently opened, or planning to hire as the market expands, you are stepping into a more complex employment law environment than most new operators expect.
Delaware has made significant changes to its employment laws over the past two years, and several of them took effect in 2025 and 2026. Cannabis employers in the state face a distinct combination of federal requirements, state cannabis regulations, and a growing body of state-specific employment protections that apply regardless of your industry.
This guide covers the Delaware employment laws that matter most to dispensary owners, cultivators, and cannabis business operators right now. It is not a substitute for legal counsel. What it will do is give you the foundation to understand your obligations, identify your gaps, and ask the right questions.
Delaware’s Cannabis Market: Where Things Stand
Recreational cannabis was legalized in Delaware in April 2023 through HB 1 and HB 2. The road to retail sales was longer than anticipated, delayed in part by complications with the FBI background check system required for cannabis worker licensing. After the state passed HB 110 in April 2025 to align its background check requirements with federal standards, the FBI granted partial approval in May 2025, and adult-use sales launched on August 1, 2025, beginning with medical dispensaries that obtained conversion licenses.
The market is still in its early stages. Delaware’s Office of the Marijuana Commissioner has issued conditional licenses to adult-use business applicants across cultivation, manufacturing, retail, and testing lab categories. License holders have up to 18 months to open their businesses, which means the hiring activity associated with this market launch is ongoing and accelerating.
For operators entering this market, understanding the employment law landscape from the beginning is far easier than correcting compliance gaps after the fact.
Background Checks: A Requirement for All Cannabis Workers
Every person seeking to become a principal officer, board member, agent, volunteer, or employee of a licensed cannabis business in Delaware must obtain a background check before beginning work. This applies to medical dispensaries operating under the compassion center framework and to adult-use licensees.
The background check requirement was the source of the significant licensing delay that held up the adult-use market. Delaware’s HB 110 resolved that issue by clearly defining who must undergo the checks and aligning Delaware’s requirements with FBI standards. The Office of the Marijuana Commissioner oversees this process for both the medical and adult-use markets, following its 2025 consolidation of both programs under the same regulatory authority.
As a practical matter, this means you cannot simply bring someone on for a trial shift or informal start before their background check clears. Document your hiring process carefully, confirm clearance before any employee begins work, and maintain those records as part of your HR file for each cannabis worker.
Cannabis in the Workplace: What Delaware Law Permits and Prohibits
Delaware’s recreational cannabis law, the Delaware Marijuana Control Act, does not significantly change what employers can require in the workplace. The law explicitly states that employers are not required to permit or accommodate the use or possession of marijuana while an employee is at work. You can prohibit impairment, use, and possession on your premises, during working hours, and while employees operate your equipment or vehicles.
Where it gets more nuanced is the distinction between recreational and medical cannabis users, and how drug testing interacts with both.
Recreational Cannabis and Drug Testing
Delaware allows pre-employment drug testing, and recreational cannabis users do not receive employment protections simply because cannabis is legal. As a Delaware employer, you can still exclude candidates who test positive for recreational cannabis use during a pre-employment drug screen. Just because recreational cannabis is legal does not prevent companies from choosing not to hire someone who tests positive for marijuana. Most industry employers don’t drug test budtender and non-safety position candidates, but you are free to. If you choose to, make sure you mention this policy in your employee handbook.
Post-accident testing, reasonable suspicion testing, and random testing for safety-sensitive roles remain available and are encouraged to reduce your liability. Any testing you conduct must be supported by a written workplace drug testing policy.
Medical Cannabis Cardholders: Protected Class
Delaware’s Medical Marijuana Act creates meaningful employment protections for registered medical cannabis patients, and these protections are separate from anything the recreational legalization law does.
Delaware law prohibits employers from discriminating against an applicant or employee because the employee holds a medical marijuana card. Medical cannabis cardholders may not be precluded from employment based on their status as cardholders or because they use medical marijuana. An employee with a medical marijuana card who tests positive for cannabinoids on a pre-employment drug screen may not be excluded from consideration, unless the employer would lose a monetary or licensing-related benefit under federal law by hiring the candidate.
The practical implication is direct: before taking an adverse employment action connected to a cannabis-positive test result, you need to determine whether the employee is a registered medical cannabis cardholder. If they are, and no federal law exception applies, that positive test result alone can’t be the basis for the adverse action.
The Delaware Persons with Disabilities Employment Protections Act adds another layer. This law may require employers to consider allowing cannabis use during non-work hours as a reasonable accommodation for a disability. This intersects with the federal Americans with Disabilities Act (ADA) and requires a case-by-case review rather than a blanket policy. When a situation involving a medical cannabis patient comes up, consult legal counsel before acting.
Delaware’s Minimum Wage and Wage Requirements
Delaware’s minimum wage reached $15.00 per hour on January 1, 2025, completing a multi-year scheduled increase. There are no local minimum wage laws in Delaware, so the statewide rate is the floor for all covered employees.
For tipped employees, the minimum cash wage in Delaware is $2.23 per hour, provided total earnings (base plus tips) meet or exceed the $15.00 state minimum. If tips do not bring the employee to the minimum wage threshold, the employer must make up the difference. Delaware law also requires that gratuities received by employees remain the sole property of the employee and may not be taken or retained by the employer, except as required by law. Employers who divert employee tips can be required to pay restitution by the Department of Labor.
Overtime follows the federal Fair Labor Standards Act standard: non-exempt employees are entitled to 1.5 times their regular rate for all hours worked over 40 in a workweek. Delaware does not have a state-level double time law. You cannot make an employee salaried to avoid paying overtime. There are very specific rules about this, and violating them will result in hefty fines.
Delaware requires employers to maintain payroll records for at least three years. Records must document hours worked, wage rates, and payment details for each employee.
One additional wage requirement to be aware of: Delaware law prohibits deductions from employee wages for damaged property or cash shortages. If a register comes up short or a product is damaged, you can’t dock an employee’s pay for it. That prohibition applies regardless of what your employment agreement says.
The Salary History Ban
Delaware’s Compensation History Law, codified at Title 19, Section 709B, prohibits employers from asking about, screening based on, or requiring disclosure of a job applicant’s past pay. The law prevents employers from using prior pay to set minimum or maximum salary criteria.
Employers may discuss pay expectations or ranges with applicants, and if an applicant voluntarily discloses their compensation history, that information may be considered for negotiation purposes after a job offer has been accepted. The key word is voluntarily. You cannot prompt or pressure that disclosure, directly or indirectly.
Remove salary history questions from your job applications and interview protocols if they haven’t been updated to reflect this law. It is a simple fix that many small businesses have not yet made.
Pay Transparency in Job Postings
Governor Matthew Meyer signed HB 105 into law on September 26, 2025. The law requires employers with 26 or more employees to include compensation and benefit information in job postings. It takes effect two years after enactment, which means covered employers should begin preparing now.
When the law takes effect, covered employers who announce or post a job opportunity must publish the hourly or salary compensation range and a general description of the benefits and other compensation offered. The compensation range must be set in good faith based on an applicable pay scale, previously determined range for the position, or the actual range of current employees in similar roles. Open-ended ranges are not allowed.
If a position is paid on a tipped basis, the posting must disclose that fact and provide the base wage or range of base wages. For cannabis retail operators with tip-eligible positions, that is a specific requirement to build into your job posting templates.
Employers covered by the law must maintain records of job descriptions and the salary and wage rate history of each employee for at least three years.
If you are below the 26-employee threshold today, this law does not yet apply to you. Building the practice of including salary ranges in your job postings now is a smart move, and it positions you well as your business grows past that threshold.
Delaware Paid Family and Medical Leave: Now in Effect
Delaware’s Paid Family and Medical Leave program went into full effect on January 1, 2026. This is one of the most significant new compliance obligations for cannabis employers in the state, and the coverage threshold is low enough that it will apply to most cannabis businesses.
The program is tiered based on employer size, measured by the number of employees who work primarily in Delaware:
Employers with fewer than 10 employees are exempt from mandatory participation, though they may voluntarily enroll. Employers with 10 to 24 employees are only required to provide parental leave benefits. Employers with 25 or more employees are required to provide full coverage, including parental, medical, family caregiver, and military qualifying exigency leave.
Eligible employees can receive up to 80% of their average weekly wages, capped at $900 per week for 2026 and 2027. The benefit amounts are subject to annual adjustment after that.
Leave entitlements by type are: up to 12 weeks of parental leave within one year of a child’s birth, adoption, or placement; up to six weeks of medical leave for the employee’s own serious health condition or injury every 24 months; and up to six weeks of family caregiver or military exigency leave every 24 months. The combined maximum is 12 weeks of paid leave in an application year.
The program is funded through a payroll tax of 0.8% of taxable wages. Employers with 10 to 24 employees are responsible only for the parental leave portion, which is 0.32% of taxable wages. Employers with 25 or more employees contribute to all three components. Employers can pass up to 50% of the cost to employees through payroll deductions. Employers may also choose to absorb the full cost themselves.
Employers must register for the program through the Delaware LaborFirst portal and designate an administrator. Employers can apply to use a state-approved private plan that meets or exceeds the requirements of the state program if they want to opt out of the official state program. Private plan exemptions must be renewed annually.
For cannabis operators who opened or expanded in 2025, confirming your registration status and verifying that your payroll system is collecting and remitting contributions correctly is an immediate priority.
Worker Classification: Get It Right Before It Costs You
Delaware increases penalties for worker misclassification, and the risks are higher in the cannabis industry, where compliance scrutiny is already elevated.
In Delaware, all business owners with one or more employees are legally required to carry workers’ compensation insurance. The only exemption is agricultural businesses. This means that if you have anyone working for you in a cannabis business, even one person, you are required to carry coverage.
Misclassifying employees as independent contractors to avoid payroll taxes, workers’ compensation premiums, or benefits obligations creates compounding liability: back wages, unpaid benefits, employer tax contributions, and penalties. The standard for worker classification in Delaware, consistent with federal guidance, centers on the degree of control you exercise over the work. If you set the schedule, direct the work, and the person relies on you as their primary source of income, they are almost certainly an employee, regardless of what your contract calls them.
Review any ongoing contractor relationships carefully. If someone is performing regular, directed work for your cannabis business, the independent contractor classification is likely not defensible.
The Salary History Ban and Hiring Documentation
Delaware limits pre-employment criminal checks in addition to restricting salary history inquiries. Employers cannot screen job applicants solely based on criminal history at the initial application stage in certain circumstances, though cannabis worker background check requirements through the OMC are separate from this general hiring restriction and are non-negotiable.
Your hiring documentation should reflect both sets of requirements. Job applications should not include salary history fields. Criminal history screening for cannabis positions follows OMC requirements. Offer letters should reference your documented pay range rather than a figure negotiated from a candidate’s prior salary.
What This Means for Your Employee Handbook
The laws covered in this article represent a significant number of changes that need to be reflected in your written employment policies. If your handbook was drafted before 2023 or has not been updated to incorporate Delaware’s 2025 and 2026 changes, it is not current and you should update it NOW.
At a minimum, a Delaware cannabis employer’s handbook should address:
- A drug testing policy that distinguishes between recreational and medical cannabis users, defines which circumstances permit testing, and describes the process for each scenario
- A clear policy on off-duty cannabis use that reflects the distinction between protected off-premises use and prohibited on-the-job impairment
- A Delaware PFML policy that references the state program, your chosen plan, employee eligibility, and how leave interacts with any existing PTO or paid sick leave
- A wage and hour policy that reflects the $15.00 minimum wage, the prohibition on deducting for cash shortages or damaged property, and your tip policy, if applicable
- A salary history prohibition statement confirming that past compensation will not be asked for or used in hiring decisions
- Anti-harassment and discrimination policies that reference Delaware’s protections
KushHR’s Delaware-specific employee handbook template is built for cannabis businesses and reflects the current regulatory environment. If you are drafting your first handbook or need to update an outdated one, it is a faster and more reliable path than building every policy from scratch.
Delaware Cannabis Employment Law Compliance Checklist
Use this to identify gaps in your current practices.
Cannabis Worker Licensing
- All employees, agents, and officers have cleared OMC background checks before beginning work
- Background check records are maintained in each employee’s HR file
- Process in place for onboarding new hires without allowing work to begin before clearance
Drug Testing
- Written drug testing policy in place that distinguishes between medical cardholder protections and recreational use
- Pre-employment testing policy reviewed and updated to reflect medical cannabis cardholder protections
- Reasonable suspicion and post-incident testing procedures are documented
Wage and Hour
- All employees are paid at least $15.00 per hour
- Tipped employees’ total compensation verified to meet minimum wage
- Policy prohibiting wage deductions for cash shortages and property damage is documented
- Payroll records are maintained for at least three years
Hiring Practices
- Salary history questions have been removed from job applications and interview processes
- Job postings reviewed for compliance with pay transparency requirements (for employers with 26+ employees)
- Offer letters reference documented pay ranges rather than the applicant’s salary history
Delaware Paid Family and Medical Leave
- Employer size relative to PFML thresholds confirmed
- Registration completed through the Delaware LaborFirst portal
- Plan type selected (state program or approved private plan)
- Payroll deductions and the contribution process confirmed with payroll provider
- PFML policy is documented in the employee handbook
Worker Classification
- Workers’ compensation insurance confirmed for all employees
- Contractor relationships reviewed against worker classification standards
- Any ongoing misclassification risk identified and addressed
Handbook and Documentation
- Employee handbook updated to reflect 2023, 2025, and 2026 legal changes
- Signed acknowledgments collected from all current employees
- Leave and accommodation documentation is maintained separately from general personnel files
Frequently Asked Questions
Can I still drug test employees at my Delaware cannabis dispensary? Yes, with important distinctions. Pre-employment testing is an option for recreational cannabis users, but you can’t refuse to hire or take adverse action against a registered medical cannabis cardholder based solely on a positive test result, unless a federal law exception applies. Post-accident and reasonable suspicion testing are an option for all employees. Random testing for safety-sensitive roles is generally permissible. All testing must be conducted under a written policy.
Do I have to let employees use cannabis off the clock? You can’t prohibit off-premises, off-duty cannabis use by recreational users, and you can’t take adverse action against a medical cannabis cardholder based on their status or off-duty use. You can, and should, clearly prohibit impairment, possession, and use while employees are at work, on your premises, or operating your equipment.
Does Delaware’s Paid Family and Medical Leave law apply to my small dispensary? If you have 10 or more employees who work primarily in Delaware, yes. Employers with 10 to 24 employees must provide parental leave benefits. Employers with 25 or more must provide full coverage across all qualifying leave types. Employers with fewer than 10 employees are exempt from the mandate but may choose to participate voluntarily. If you have fewer than 10 employees now but intend to grow, you should prepare.
Can I hire you or a third party to be my Administrator for Delaware’s Paid Family and Medical Leave? Yep. Once you complete your initial business registration in LaborFirst, you can authorize me to be your Third Party Administrator (TPA), and I can finish your registration and apply for a private or self-insured plan. I can administer the plan when your employees need to take a covered leave. Feel free to reach out to discuss leave administration.
Do I need workers’ compensation insurance in Delaware? Yes. Delaware requires all employers with one or more employees to carry workers’ compensation insurance. The only exception is agricultural businesses. Cannabis businesses are not exempt. Failing to carry required coverage creates both direct liability for workplace injuries and penalty exposure from the state.
Where do I go to stay current as Delaware’s laws continue to change? Delaware’s employment law landscape is still evolving alongside the adult-use market. The Delaware Department of Labor publishes guidance on wage and hour, paid leave, and general employment obligations. The Office of the Marijuana Commissioner publishes updates on cannabis-specific licensing and worker requirements. Monitoring both agencies and working with a Delaware employment attorney on an ongoing basis is the most reliable way to stay current.
