Hawai‘i’s Marijuana Business: Room for Growth
It’s been two and a half years since Hawai‘i’s legislature approved a dispensary program for medical marijuana, and about four months since the first dispensary opened its doors. So as the medical marijuana industry finally gets off the ground, how are things going? We get an update from Pacific Business News Editor in Chief A. Kam Napier
Hawaii state law allows as many as 16 dispensaries statewide, four are open. Also, as prescribed by law, Hawaii’s dispensaries are required to be vertically integrated, that is, they are responsible to have a grow operation of their own, with up to 3,000 plants, and a processing facility of their own as well as the retail dispensaries where patients can actually purchase the product.
Ten other states nationwide have this same requirement, and it puts quite a burden on the dispensaries, increasing costs for them as well as customers. As America embarks on this new industry, the laws differ widely from state to state. In Washington State, for example, dispensaries are prohibited from doing their own growing or processing. In Colorado, this vertical integration is required for medical marijuana, but not for recreational marijuana, which has also been approved there.
It’s been a challenge, too, for Hawaii’s dispensaries to find the ancillary businesses they need. A key one has been banking. Local banks will not carry accounts for the dispensaries. In September, Gov. David Ige and the Hawaii Division of Financial Institutions brought in what they call “temporary solutions.” These include a Colorado credit union called Safe Harbor Private Banking and a mobile app created specifically for the cannabis industry called CanPay, which patients can use like a debit card. There is one traditional bank account that is approved for dispensary use, however — the First Hawaiian Bank account of the Hawaii State Department of Taxation, which is perfectly happy to take the dispensaries’ checks.