Hawaii Medical Cannabis Update

Hawaii’s new medical cannabis program has people across the country seeing green in the Rainbow State. What’s got so many stoked even though Hawaii has had legal cannabis since 2000?

Hawaii and medical marijuanaHawaii’s substantial pre-existing patient base of around 13,000 people means cannabis licensees won’t have to bear the risk of patients struggling to find doctors. Some estimate the patient count could double between now and the first available product. Some regulated states, like Illinois and Minnesota, have had to develop patient bases from scratch, which makes it extremely difficult for licensees, especially cultivators. Though Hawaii has a relatively small population (1.4 million), its broad list of conditions (including severe pain and PTSD) means it likely will have a higher patient base than more populous states with more restrictive qualifying conditions.

Moreover, Hawaii is among a growing number of states with reciprocity, and it’s doing so pretty liberally. Some states with reciprocity, like Maryland, require out-of-state patients to obtain medical treatment in that state to obtain a card. Not so for Hawaii, where patients who register with the Hawaii Department of Health (with no apparent strings attached as to why the patient is in the state) qualify.

Hawaii’s political climate is hospitable to developing a medical cannabis program that can take off the ground quickly. Regulators at the Department of Health are currently in the process of developing their regulatory infrastructure with comparatively few obstacles.  Democratic supermajorities in both chambers of the legislature and a Democratic governor make it unlikely that political infighting will stymie the program’s rollout.

Hawaii House Bill 321, passed in May and signed by the Governor in July, contains the following deadlines for 2016:

  • January 4th – Interim rules released
  • January 11th – Applications available
  • January 26th – Applications due
  • April 15th – Licensees selected
  • July 15 – First licensees can operate

These dates are statutory mandates and if they are achieved as expected, it will be the shortest time between releasing rules and receiving applications for any state with a competitive licensing regime for cannabis businesses.

Despite a statutory requirement that Hawaii residents must have majority interest in licenses, major cannabis industry players from outside Hawaii are already lining up to break into this new market. The key for these established industry players will be finding the right local partners who can capably garner community support. Conversely native Hawaiian companies that choose to partner with out-of-state operators should make sure that those operators have a demonstrated track record in other states and have the capacity to follow through with their commitments on operational support in Hawaii.

Expect a lot of action in the next several months. As always we’ll be keeping our eyes on developments and reporting back.