It is an Historic Day for Hawai‘i’s new medical marijuana industry for two reasons – the Department of Health announced its selection of the medical marijuana license recipients and the Legislature passed HB 2707 out of conference (with a big win concerning the definition of a plant)!

Licensee Announcement

First, at 11:30 am today, the Department of Health made the long awaited announcement concerning those it has selected to receive a medical marijuana license. In a press conference attended only by the press and the Hawai‘i Dispensary Alliance (and live-streamed by Civil Beat), Department of Health Director Dr. Virginia Pressler and Keith Ridley, Chief of the Department of Health’s Office of Health Care Assurance, announced that the following groups have been selected to receive Hawai‘i’s first medical marijuana licenses.

Oahu:

Aloha Green Holdings Inc

Manoa Botanicals, LLC

TCG Retro Market 1, LLC dba Cure Oahu

Hawaii:

Hawaiian Ethos, LLC

Lau Ola, LLC

Maui:

Maui Wellness Group, LLC

Pono Life Sciences Maui, LLC

Kauai:

Green Aloha, Ltd.

Accompanied by Representative Della Au Belatti and Senator Rosalyn H. Baker, Director Pressler and Mr. Ridley also answered a few questions of interest about where the program will go from here.

The merit criteria scores will be posted by the Department of Health within the next two weeks. The groups selected to receive a license have 7 days from today to accept the Department of Health’s offer and pay the $75,000 application fee. The selected groups must also now obtain a certificate from the Narcotics Enforcement Divsion (NED). Licenses will only be officially rewarded once both of these conditions are met. If a selectee is unable or unwilling to meet both requirements in the timelines established, the next highest scoring applicant will receive an opportunity. Only after a group pays the application fee, obtains the NED certificate, and is awarded the license may they begin setting up operations. Over the next several months the Department of Health will finalize its contract for tracking software and work with the licensees to incorporate the tracking system into their processes. The Department of Health will be working with each dispensary throughout its build-out process, in-line with statutory requirements, to ensure each step of the process is legal and will result in a compliant operation. The Department of Health can offer final approval for a dispensary licensee to begin selling medicine as early as mid-July. No labs have been certified by the Department of Health for testing yet, but the Department has been contacted by a few interested parties and is working through the certification process with them. The applications were scored independently by each member of the selection panel, so the removal of one member of the panel, out of an initial five, had no influence on the recommendations of each of the other members of the panel. The Department had no comment on the recent lawsuit, and will take any further legal challenges one step at a time.

Representative Della Au Belatti and Senator Rosalyn H. Baker also made a few comments:

The Legislature has and will continue to work with the Department of Health regarding any upcoming changes to the law. Major operating changes affecting dispensaries will be prospective changes only, and will not disadvantage current dispensary licensees nor change the conditions of their licenses. The State’s regulatory scheme is restrictive and compliant with the Cole Memorandum, and the Department of Health will be in contact with the Federal Department of Justice to ensure that the program’s administration will continue to comply. The Legislature is not interested in disrupting the Department of Health’s process, and they are very excited about the great job that the Department has done so far in making this industry a reality.

The Hawai‘i Dispensary Alliance is very excited for those selected, and as we mentioned in our recent White Paper concerning the future of the industry, we encourage each applicant who did not receive a license to investigate how they can mobilize their fiscal and personnel resources to pivot to other aspects of the marijuana industry – turning their expertise and funding to any of the multitude of profitable, tractable problems that beset this new industry. Hawai‘i needs local banks; laboratories; research collectives; product development companies; consulting firms; grow and manufacturing subcontractors for the dispensaries; education institutions; technology companies; waste disposal firms; and any of hundreds of other potential services. Who better to create unique local solutions for the industry’s needs than the dispensary applicants and their teams of industry friendly experts and investors? If you want to know more about the future of the industry, check out our recent conversation with small business advocate Reg Baker.

HB2707 CD1 Passed out of Conference!

The Conference Committee passed HB2707 CD1 out of conference today, the sole medical marijuana specific bill to make it through this year’s session. The Hawai‘i Dispensary Alliance is pleased that our bill has made it this far and we are excited about a few of the fixes to the current statutory scheme. The bill will go to a formal legislative vote next week. Big wins in the bill include:

The addition of a definition for “plant” to clarify the 3000 plant limit. A marijuana clone or other sprout only classifies as a plant once it grows out of a 12″ square box in any direction. Exemption of certified patients and dispensaries from prosecution for possession of drug paraphernalia. Inclusion of two members of the Hawai‘i Dispensary Alliance on the legislative oversight working group charged with investigating the future of the industry in Hawaii, including the legalization of edibles and any other relevant issue.

Other important elements of the bill include:

Provisions allowing DBEDT to collect data and make reports on the business side of the industry. Changes to the State of Hawai‘i Internal Revenue Code section 280E, allowing dispensaries to claim their operational expenses as deductible business expenses. Exclusion of Dispensaries from the Enterprise Zone Development tax exemption. Inclusion of Advanced Practice Registered Nurses as certifying physicians. Transportation exceptions for testing purposes. Clarifications allowing for compliant greenhouses. Clarifications allowing subcontractors for any ancillary service to contract with more than one dispensary. Addition of Transdermal patches and pre-filled inhaler or nebulizer cartridges to the list of allowed products. Exemption of patients, caregivers, and government officials from state background check requirements before entering a dispensary. Provisions authorizing the University of Hawai‘i to fund and develop a research program into the medical uses of marijuana.

Thank you to all of the members of the Hawai‘i Dispensary Alliance and the public who have supported these important and needed changes to the current statutory scheme. We look forward to continuing this work with each of you in the coming years as we look to develop a true medical marijuana economy here in Hawai‘i.

It is the Alliance’s mission to provide up-to-date and relevant industry information to the patients, dispensary applicants, and related businesses of Hawai‘i’s growing medicinal cannabis industry and to lobby effectively on behalf of the entire industry.

Contact us today and we will send you the April 2016 Edition of our monthly Industry Publication absolutely free to demonstrate just a little of the value we can provide you as a stakeholder in this industry. You can also find us on Facebook or Twitter. If you like what we are doing, you should also consider joining the Alliance to support the future of Hawaii’s medical marijuana economy, find a doctor who is right for you, make profitable business alliances, and receive Hawaii’s only state specific industry analysis every month.