Hawaii Marijuana Business

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Hawaii Marijuana Licensing >

What is the Demand for Marijuana in Hawaii?

According to the HCIA 2019 report, about 2.4% of Hawaiian residents aged 18 years and above are registered as medical cannabis patients. The report estimated that there were about 127,000 cannabis users in the state, and roughly 1-in-5 were registered as patients in the Program.

The Medical Cannabis Registry Program (MCRP), through the Department of Health (DOH), releases a monthly data report on the Program statistics. The report for July 2021 put the number of in-state patients with valid registrations at 34,299. There were also 2,821 caregivers and 339 physicians/APRN registered by the MCRP in the state. As at April 2023, these numbers have only dipped slightly with Hawaii recording 33,125 patients and 2,782 caregivers with valid medical cannabis registrations.

How is Marijuana Taxed in Hawaii?

The State of Hawaii does not impose any special taxes on the gross proceeds from the sale of medical cannabis products. The sales of medical cannabis products in the state are only subject to the general excise tax of 4% (4.5% in Oahu).

Exactly 50% of the revenue generated from the excise tax on medical cannabis products is deposited in the Drug Treatment Special Fund. This is a special fund established in 2018 following legislative amendments to the Hawaiian Revised Statutes. The fund was set up within the Treasury, and monies deposited here will be solely used to support drug treatment programs in the state.

Chapter 321-30.1 of the Hawaiian Revised Statutes establishes the Medical Cannabis Registry and Regulation Special Fund. This fund was created within the state treasury and is expended at the discretion of the Director of the DOH. Available resources shall be used to:

• Offset the cost of processing and issuing patient registry identification certificates and primary caregiver registration certificates.

• Establish and regulate a system of medical cannabis dispensaries in Hawaii.

• Fund positions and operation costs authorized by the legislature

• Establish and manage a secure and confidential database

• Fund substance abuse prevention and education programs

• Fund public education as required by Section 329D-26

• Fund substance abuse prevention and education programs

• Fund any other expenditure necessary, consistent with this Chapter and Chapter 329D, to implement medical cannabis registry and regulation programs.

What is the Agency Taxing Marijuana Business in Hawaii?

Hawaii has no special tax on medical cannabis products. Medical cannabis in Hawaii is subject to the general excise tax on all business activities in the state, which is 4%. Like all other sources of general excise tax, it is collected by the Hawaii Department of Taxation (DOTAX).

The DOTAX is a state-run agency responsible for the collection of taxes and fees in the state. For the 2020 fiscal year (July 2019 - June 2020), the state accrued a total tax revenue of $7.86 billion. This represented a 5.4% decline from the State's tax revenue in 2019, which amounted to $8.28 billion.

The head office of the Department of Tax is situated in Oahu District, at:

Princess Ruth Keelikolani Building

830 Punchbowl Street

Honolulu, HI 96813-5094

(808) 587-4242

The DOTAX also has district offices located across the state:

Maui

State Office Building

54 South High Street

Room 208

Wailuku, HI 96793-2198

Molokai

35 Ala Malama Street

Room 101

Kaunakakai, HI 96748

Hilo

State Office Building

75 Aupuni Street

Room 101

Hilo, HI 96720-4245

Kona

State Office Building

82-6130 Mamalahoa Hwy

Room 8

Captain Cook, HI 96704

Kauai

State Office Building

3060 Eiwa Street

Room 105

Lihue, HI 96766-1889