Cannabis Business in Hawaii

By August 2024, Hawaii had almost 31 thousand registered patients in its medical cannabis program. Despite the presence of an illicit market, the legal sector was valued at over $240 million, with 2022 dispensary sales topping $50 million. Medical cannabis is subject only to Hawaii’s standard excise tax of 4% (4.5% in Oahu), without additional cannabis-specific taxes.

Legal Framework

Medical cannabis is allowed for patients with eligible conditions who enroll in the Medical Cannabis Patient Registry Program and receive a 329 ID card. Recreational use remains banned, though possessing up to 3 grams was decriminalized in 2019, carrying a maximum fine of $130.

Legislative Milestones

Medical cannabis was legalized in 2000 under Act 228, the first state law to achieve this through legislation. The Medical Cannabis Dispensary Program was later established in 2015, setting up a regulated market.

Plant-Touching Cannabis Businesses in Hawaii

Hawaii's legal cannabis market is limited to medical use, with two types of licenses available for medical cannabis operations as of early 2024:

• Medical Cannabis Dispensary License: This license permits businesses to grow, manufacture, and distribute cannabis products to registered patients and caregivers in compliance with Chapter 329D of the Hawaii Revised Statutes. License holders may operate up to two dispensaries and two cultivation sites, with each cultivation site restricted to a maximum of 3,000 cannabis plants. Currently, there are 24 licensed dispensaries operating across the state.
• Medical Cannabis Testing Laboratory License: This license authorizes laboratories to conduct tests on cannabis and cannabis products to ensure quality and safety before they reach dispensaries.

Hawaii ceased accepting applications for dispensary licenses on January 29, 2016, and has not issued new licenses since then. Licensees are allowed two dispensary outlets and two cultivation facilities. The initial licensing fee was set at $75,000, with a renewal cost of $50,000.

Ancillary Cannabis Businesses in Hawaii

Hawaii's medical cannabis industry relies on a range of essential services. Regulatory advisors assist with legal compliance, while financial planning experts handle tax and accounting needs. Cannabis-friendly banking solutions offer secure financial options, and security specialists provide surveillance and protection. Although Hawaii currently restricts its legal market to medical use, there is potential for expansion, making it worthwhile for entrepreneurs to consider a future cannabis business for sale in the state.

Brand management teams focus on compliant marketing strategies, and coverage providers offer tailored insurance plans. Additionally, sales and inventory systems streamline dispensary operations, while industry consultants lend expertise on licensing, operations, and regulatory compliance.