Hawaii adult-use cannabis legalization is $1 billion opportunity
- A government-commissioned report predicts Hawaii's adult-use marijuana legalization could create a billion-dollar industry, with the total market reaching $59-95 million per month by year five.
- The current medical cannabis market generates about $5.3 million in monthly sales, serving 30,000 patients who make up 25% of Hawaii’s cannabis consumers.
- Legalization would require expanding cultivation capacity and establishing around 65 retail marijuana stores statewide, with a proposed 15% tax rate to maximize revenue without encouraging illicit sales.
- The report recommends affordable licensing fees and flexible structures to support legacy farmers, small businesses, and promote industry diversity; legalization efforts continue amid legislative opposition but with hopeful prospects under Democratic control.
Adult-use marijuana legalization in Hawaii could usher in a billion-dollar industry, according to a recent government-commissioned report.
Commissioned by the Hawaii Department of Health, the report evaluated the current medical cannabis framework and forecasted the economic impact of adult-use legalization.
“Should Hawaii choose to legalize adult-use cannabis, by year 5 the total cannabis market across all sources is projected to reach $59-95 million per month,” the report said.
According to the report, the state’s MMJ market currently generates about $5.3 million in monthly sales, capturing up to 87% of patient spending. That’s slightly below an MJBiz Factbook projection.
“In other words, the regulated medical market accounts for the vast majority of patient spending and functions as the primary channel through which patients obtain cannabis product,” the report reads in part.
Hawaii’s roughly 30,000 medical cannabis patients account for 25% of all cannabis consumers in the state.
The state has eight licensed vertically integrated medical cannabis operators.
Tourism will be a major contributor to the state’s cannabis industry, the report predicted.
If Hawaii legalizes adult-use cannabis, it will require a substantial expansion of its cultivation capacity:
About 65 retail marijuana stores statewide will be needed to satisfy demand, the report added.
The report also identifies a 15% tax rate as optimal for maximizing revenue while maintaining consumer participation. Higher rates could push consumers toward the illicit market, the report said.
Legacy farmers and small-business applicants have a low willingness to pay for cannabis licenses, according to the report. Regulators should implement affordable or waived fees to encourage diverse participation.
To support small businesses, jurisdictions could adopt flexible licensing structures, scalable opportunities and transfer allowances to promote longevity and provide viable exit strategies.
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What you will get:
Adult-use cannabis legalization has been stalled in Hawaii thanks to opposition in the state legislature.
That’s despite the state Senate passing a legalization bill in the past.
Advocates are hopeful that Hawaii lawmakers may be the next state to pass a legalization bill given Democratic control.