Medical Marijuana Sales Tricky for Hawaii Due to Geography

With less than five months to go before medical marijuana dispensaries can open in Hawaii, business owners could be facing unique obstacles in a state of islands separated by federal waters.

Dispensaries can open as soon as July 15, but industry experts say they could be confronted with challenges unlike those in other states, such as navigating rules that ban inter-island transport and limit the number of growers – all of which could cause marijuana shortages. A lack of labs to test the crop presents another challenge for state lawmakers.

“Hawaii is going to be a really interesting market in general, basically because of the geography,” said Chris Walsh, managing editor of Marijuana Business Daily. “First, it’s a chain of islands separated by bodies of water, and second, it’s remote.”

The Hawaii Department of Health is currently reviewing dispensary applications, and plans to award licenses in April. Actor and marijuana advocate Woody Harrelson and video game designer Henk Rogers are among 59 Hawaii residents who have applied for licenses.

Under a law passed in 2015, Hawaii will grant eight licenses for marijuana businesses, each of which can have two production centers and two dispensaries. Three licenses will be awarded for Oahu, two for Hawaii Island, two for Maui and one for Kauai.

However, the law banned inter-island transport. Marijuana advocates say that will separate the industry into distinct economies on each island, unlike other states. It could also lead to marijuana shortages, and go as far as preventing some dispensaries from even selling marijuana until laboratories are approved.

All medical marijuana must be tested in a state-approved laboratory before it’s sold, but currently, there are none in Hawaii. Some worry that high startup costs and low patient numbers will prevent laboratories from opening on rural islands.

“Clearly, not every island can support a full-on laboratory,” said Pam Lichty, president of the Drug Policy Action Group.

In response, Hawaii lawmakers are considering whether to allow marijuana to be transported to another island if a laboratory isn’t available. Rep. Della Au Belatti, who introduced the bill, said lawmakers are trying to figure out how to get around federal laws that prevent marijuana from being transported by sea or air. She said she asked state agencies to look at other state policies for answers.

Some airports in Washington, Oregon and Alaska allow travelers to fly with marijuana, airport officials told The Associated Press. They said the Transportation Security Administration sends travelers with marijuana to local law enforcement officers, who allow people to board flights carrying legal amounts under state law.

However, the Federal Aviation Administration is required to revoke pilots’ licenses if they knowingly commit a federal crime involving a controlled substance on an aircraft – for instance, transporting marijuana.

The Department of Justice says it is less likely to interfere with state marijuana programs as long as they’re well-regulated, according to a 2013 memo.

Medical marijuana advocates in Hawaii say patients would benefit from relaxed laws on inter-island transport. For instance, a crop failure on Kauai, with only one license, could leave patients without medicine for months.

Marijuana shortages are not unheard of. States like Massachusetts and New Jersey have dealt with shortages due to low yields and mold contamination. Those in the industry say Hawaii dispensaries could face pot shortages if something goes wrong in the grow process, which could be a higher possibility as growers start out.

“Grows that are not set up properly will fail,” said Jeremy Nickle, who owns Hawaiian Holy Smokes and is applying for a dispensary.

Hawaii’s medical marijuana industry could also face other problems, such as the nation’s highest electricity costs and a thriving underground market. Hawaii was the first state to legalize medical marijuana through the legislative process 16 years ago, which means many patients already know where to find marijuana.