New Market: Hawaii’s MMJ industry to benefit from readily available patient pool

By Marijuana Business Daily on February 1, 2017News
New Market: Hawaii’s MMJ industry to benefit from readily available patient pool

By Bart Schaneman

A well-established patient pool should allow Hawaiis eight licensed medical marijuana companies tohit the ground running once they harvest and process their first crop of cannabis, which is expected this year.

Hawaii has had a long-established MMJ caregiver program that has served thousands of patients over the past 16 years.

The state legislature approved a full-fledged medical cannabis program in 2015. The law established eight vertically integrated medical cannabis businesses.

Thanks to the states caregiver program, those eight businesses will have access to a large patient pool, which, as of the end of 2016, was15,334 cardholders.

There is a base of patients who have been very patient and are looking forward to a system where they can buy lab-tested, high-quality medicine, said Brian Goldstein, founder and CEO of Manoa Botanicals, an Oahu-based dispensary.

According to

While the eight dispensary operators have their own grows, there will be some opportunities for entrepreneurs to capitalize on ancillary businesses ranging from lighting and legal services to security and transport.

The dispensaries have yet to open their doors, however. Hawaiis MMJprogram has been delayed while the state health department attempted to link its seed-to-sale tracking system with thesoftware used by the eight licensees. Two dispensaries were approved to begin growing on Feb. 1, with others expected to following pending inspections.

Growers get the green light

Following the states health department announcement last week that its tracking system was ready to go live, the department also gave two dispensary operators the OKto begin growing cannabis. Each of the eight licensees can operate two dispensaries, meaning Hawaii could have up to 16 MMJ outlets. Each licensee also may open two cultivation centers.

Keith Ridley, chief of the health departments Office of Health Care Assurance, said he expects dispensaries to open this year presumably in the coming months, after the first crop is harvested.

The dispensary operators will confront a growing patient pool: According to

Thats expected to spur the state to issue more dispensary licenses over the next few years.

While caregivers now grow MMJ for existing patients, state law is set to eliminate the caregiver program by 2018. That should be a boon for dispensary operators seeking patients.

Whats more, thousands of medical marijuana tourists could give the states MMJ industry an added shot in the arm.

Business opportunities

There are excellent business opportunities, especially for dispensaries that focus on providing high-quality medicine to patients, said Goldstein ofManoa Botanicals.

More broadly, Goldstein sees opportunities in several areas, including security, transport, laboratory, testing and growing supplies.

The growers will be in a position to tap a readily available labor pool. Many Hawaiian farmworkers have been displaced over the years as traditional crops such as pineapple and sugar are now grown elsewhere.

The health department, meanwhile, bars dispensaries from selling smoking paraphernalia, such as pipes or vaporizer pens. Dispensaries can only sell flower and extract products.

Consequently, there will be an opportunity for retailers to sell smoking gear.

Still, the current limited number of licenses constrains the market for ancillary businesses, according to Stephen Pingree, an MMJ compliance lawyer in Honolulu.

Number, type of licenses

The eight vertically integrated businesses are divided by island:

  • Oahu: Three
  • Maui: Two
  • Hawaii (Big Island): Two
  • Kauai: One

The license holders cannot buy or sell product with one another.

At the end of 2017, the health department ismandated to examine the number of patients and perhaps issue new licenses.

Under the law, there can be one license holder for every 500 patients. Given the growing number of patients, its anticipated that there should be some 25-30 new licenses opening up over the coming months and years.

Pingree suggested this may be when the licensing regime moves to a horizontal structure versus the current vertical approach, which could generate more business opportunities. He predicts it will be anywhere from 1 1/2 to three years before more licenses are granted.

The eight dispensaries are absolutely against additional licenses, he said. Everybody else the patients and the public want more licenses.

As a dispensary owner, Goldstein would like to see an opportunity to recoup his initial costs before any new licenses are issued.

Hawaiis a very expensive place to do business, he said.

Any new applicant for a license must be a five-year Hawaii resident and must own 51% of the company.

Conditions list, patient count

The more than 15,000 MMJ cardholders can get MMJ for any of the following conditions:

  • Cancer
  • Glaucoma
  • Positive status for human immunodeficiency virus
  • Acquired immune deficiency syndrome
  • PTSD
  • Cachexia or wasting syndrome
  • Severe pain
  • Severe ...
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