A Snapshot Of America's Medical Marijuana Markets: Hawaii

Hawaii's first steps into the medical cannabis market came in 2000. Cardholders were permitted the right to grow their own medicine.

However, legal sales and a marketplace were not established.

Fifteen years later, the Aloha State created a medical dispensary program. It took another two years before sales would begin in August 2017.

Making steps towards progress has not been enough for patients and business owners on the island, who consider the program rather restrictive.

Despite the concerns over access, Hawaii's program has grown month-over-month. As of June 30, over 30,800 patients have registered in the program, marking another month of modest gains.

It also has out-of-state reciprocity and decriminalization.

BDS Analytics and Arcview Market Research reported that Hawaii generated $15 million in medical sales during 2018, with that figure expected to reach $94 million by 2024.

Businesses may not be prone to Hawaii, due to a population of 1.5 million people, which may limit growth potential. However, sources on the island believe that local cultivation, if given the access, would do fine on their own without significant outside business.

A Market In Need Of Further Repair

Over the years, Hawaii's supply chain has had shortcomings.

Patients on remote parts of the island chain are essentially prohibited from participating in the market, as inter-island transport of medicine is banned.

Businesses are also obligated to be vertically integrated, despite requests for horizontal integration to include legacy operators into the market.

Access remains an issue for the supply chain, according to Dylan Shropshire, founder and chief operating officer of Big Island Grown, which has stores on Kona, Hilo and Waimea.

Others operating in the space agree that improvements could help the program.

Me Fuimaono-Poe, medical director for Alia Cannabis, highlighted benefits that include the state Department of Health's strict monitoring, allowing for rapid recalls, medical and caregiver supervision as well as establishing a homegrown community.

However, Fuimaono-Poe noted that Hawaii only has eight dispensary licenses, which the medical director says limits supplies and commercial options. The current market is "an oligopoly that maintains immense control in the industry," she says, adding how it fails to adequately protect workplace and gun ownership rights.

The shortcomings leave Big Island Grown's COO concerned for patients and operators.

"If the program is not able to adequately serve patients, there is an impact to the business — they go hand in hand," Shropshire told Benzinga, citing how concerns have continued during the COVID-19 pandemic. "The governor deemed medical cannabis dispensaries an essential business. However, the State remains one of the only medical programs in the country not allowing curbside pickup or delivery."

To its credit, Hawaii lawmakers have made efforts, such as reciprocity, which could advance the market, along with the allowance of THC-infused edibles.

A bill currently awaits the signature of Gov. David Ige. However, lawmakers approved a bill banning smokable hemp and CBD-infused edibles during the same month, with the measure also sent to Gov. Ige's desk for signature.

Fuimaono-Poe told Benzinga that advocates like herself are working on advancing employee protections over the next year. 

Prospects Of An Adult-Use Market

Shop leaders like Big Island Grown's Shropshire hope that Hawaii approves social distancing-approved pickup options, and finds a way to include Hawaiian growers in the burgeoning market.

He also would like to see the state allow telemedicine certification to boost enrollment access. Concerning adult use, Shropshire believes the move will be inevitable as Hawaii seeks to diversify its revenue.

"The opportunity to evolve beyond an anemic medical program is too great not to be seriously discussed-even amongst the most ardent opposing voices," he said. "Given the current state of affairs, this discussion is accelerating more and more each day."

However, nothing is certain concerning legislator approval. In 2019, lawmakers opted not to consider an adult-use legalization bill.

The legislative reluctance is the main obstacle according to Fuimaono-Poe, citing Governor Ige as a significant roadblock.

"Until we get a new governor, adult use is not on the table,” she said stated the medical director.

However, the prospect does not entirely upset her. “I am glad we don't have it yet because that means we have a chance to get it right here."

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