It’s been two years since the implementation of the medical cannabis dispensary program in the Aloha State. Finally, on August 8 and 9, two dispensary retail outlets opened for business – one on Maui and one on O‘ahu, respectively. For patients, it simultaneously marked a milestone and reinforced their frustrations with Hawai‘i’s dispensary program.
The good news started spreading when the Department of Health (DOH) announced that it provisionally certified a cannabis testing laboratory, Steep Hill Hawaii, on July 31, to test dried flower. Maui Grown Therapies and Aloha Green (on O‘ahu) immediately submitted product for testing.
Both dispensaries opened with a limited supply of dried flower. Each had six cultivars to choose from – three CBD dominant strains and three THC dominant strains. Both dispensaries quickly ran out of product by the weekend and closed their doors for a few days. In the days that followed the grand openings, public online forums commented on the poor quality of the product – some cultivars were full of seeds and stems – and the high prices.
Maui Grown Therapies stakeholders claimed that the DOH was responsible for “administrative hindrances” that kept them from selling “a full range of derivative products.”
Since then, the dispensaries have reopened and Steep Hill continues to test cannabis flower for the two dispensaries while it awaits certification to test manufactured products. There are also two more private laboratories seeking certification from the DOH to test cannabis products. Once derivative product testing commences, the dispensaries still have to work out their packaging requirements with DOH.
According to DOH, three more licensees – two on O‘ahu and one on Maui – could potentially open a dispensary by the end of the year. Unfortunately, transportation between islands is illegal, so these additional dispensaries on O‘ahu and Maui would still leave patients on Kaua‘i and the Big Island with no legal access to a dispensary now or in the near future. The remaining dispensary owners are still developing their production and retail facilities.
The regulatory and operational burdens shouldered by dispensary owners within Hawai‘i’s vertical licensing system have significantly impacted their ability to operate businesses that effectively deliver quality medication to patients. With the law calling for a maximum of 24 dispensary retail outlets across the state, and only two open dispensaries, Hawai‘i’s state-regulated medical cannabis program is literally failing patients. With no competition in the marketplace, prices have already soared to more than $90 for 3.5 grams of top-shelf dried flower. That is two- to three-times higher than local black-market prices.
Dispensaries or not, the registry program continues to add about 500 patients every month, and is currently sitting at 18,619 registered patients. According to DOH, the opening of the first two dispensaries did little to boost patient numbers. Many patients treated their first visit to a dispensary as a novelty experience and will be hard-pressed to return unless dispensaries can give patients the quality and value they already have access to.
On the legislative front, the Act 230 Legislative Oversight Working Group, tasked with developing policy recommendations, has been repeatedly prodded, month after month, by the public to switch gears to a horizontal licensing structure. Many in Hawai‘i believe that more licenses will create more opportunity to get the industry rolling and provide patients with more affordable medicine. Unfortunately, the chairs continue to sideline this perspective and voice their position that the current regulatory structure should remain in place so that the current license holders can recoup their extensive startup costs.
What’s next for the cannabis industry in the Aloha State? The 2018 legislative session begins in a couple months and cannabis legislation reform looks to be a non-issue again. With no leadership from Governor Ige, legislators will leave the vertical licensing system in place to the chagrin of many cannabis industry experts, locally and nationally.
“There are a lot of top cannabis companies that can set incredible precedents for Hawai‘i’s cannabis industry,” says Hawai‘i Dispensary Alliance Executive Director Christopher Garth. “But unless Hawai‘i legislators can pull the trigger and open up the licensing structure, their opportunity is limited, as is the future of the industry in our island home.”