Big Isle could gain four dispensaries by 2016

Medical marijuana dispensaries could start operating on the Big Island next year, after Gov. David Ige this week indicated he would not be vetoing the bill authorizing them.

State Sen. Josh Green (D-Kona, Ka‘u), the Health Committee chairman and the original Senate chair of the joint House-Senate conference committee that finalized the legislation, said he believes he and his colleagues came up with “a decent medical marijuana dispensary bill.”

“My primary goal was to make sure that all counties had dispensaries so that no patient would go without medication, and that was achieved, in a good way,” Green, a physician, said Thursday.

Sen. Will Espero, an Oahu Democrat and Public Safety chairman who took over the Senate lead on the conference committee, said the legislation has “given the Department of Health everything it needs to get our dispensaries up and operating, which we should have done years ago.”

The bill requires the state DOH to provide for a selection process and criteria for license applicants by Jan. 4, 2016. There will be three licensees for the City and County of Honolulu, two for Hawaii and Maui counties and one for Kauai, and each licensee will be allowed to open two dispensaries each plus production centers. Licensees are to be announced by April 15, 2016, and dispensaries can open as early as July 15, 2016.

Hawaii’s law allowing medical marijuana was passed in 2000, but it took 15 years for a dispensary bill to pass legislative muster.

“People have sometimes been critical of the pace, but it’s important that this be done in a methodical way, because other states that have dove in without working out some of these problems have had to constantly go back and fix their programs,” Green said.

The manufacture, use and sale of marijuana, including for medicinal purposes, remains illegal at the federal level, so banks have steered clear of financing dispensaries, which means sales are cash-only. The bill requires license applicants to have at least $1 million in financial resources for each application, plus at least $100,000 for each retail location.

There is a non-refundable application fee of $5,000 for each license application. Those who are chosen will need to pay a dispensary license fee of $75,000 for each approved license within seven days. License renewal will be $50,000 yearly.

“Because we’re only providing eight licenses, which is not a lot, we want to make sure the right applicants get these licenses, and their opportunity for success for the greatest,” Espero said.

Groups applying for dispensary licenses must have a 51 percent controlling interest by Hawaii residents, according to the measure.

“The public safety aspect is important, and that makes it easier to enforce Hawaii laws, if necessary,” Green said. “I also like the idea of local ownership and the benefit to the local economy.”

In addition to bulk cannabis, dispensaries will be allowed to sell capsules, lozenges, pills, oils and extracts, tinctures, and ointments and skin lotions, plus “other products as specified by the department.” It’s not clear if those products will include edibles, such as candies, brownies and cookies, which have caused controversy in other states with dispensaries due to the possibility of children consuming those products.

Licensees will also have to have their products laboratory tested for quality and purity.

Dispensaries and production centers will have to comply with county zoning regulations, and will not be allowed within 750 feet of a school, playground or public housing project or complex.

Dispensaries and production centers will also be required to provide both video surveillance and recording and physical security, and to take part in real-time computer monitoring of sales and inventory by DOH, as well as to comply with any request for production and sales records by law enforcement.

Earlier versions of dispensary bills had as much as a 25 percent tax on the product, and 30 percent surcharges per ounce of marijuana, but the final version allows only for the 4.167 percent state excise tax levied on all retail sales.

“We’re looking at this from the perspective of health care and medicine, and not as a legalization issue where they are putting a high tax on the product,” Espero said.

Green said in states that heavily tax medical marijuana “it chokes the process back to the black market.”

“So you have dispensaries that can’t compete, and they crash, so you don’t even get a dispensary system, because there’s lower-cost marijuana being sold on the street, unregulated, possibly impure.”

Qualified patients or their caregivers will be allowed to purchase up to 4 ounces of marijuana or its equivalent in a 15-day period, or up to 8 ounces in a 30-day period, under the law.

The measure provides for transport of the product in sealed containers from the dispensary to the patient’s home. Not allowed is interisland transport of medical marijuana due to federal regulation of aviation, but the bill allows authorized patients to purchase cannabis from dispensaries on other islands.

The law also allows qualified patients to continue growing their own medical marijuana, but will phase out by Dec. 31, 2018, the provision in the current medical marijuana law allowing caregivers to grow marijuana for patients, a provision both Green and Espero said they did not favor.

“Personally, I didn’t want to take that out, but there were others who did … and that wasn’t going to make or break the legislation,” Espero said. He added that individual provisions in the bill can be revisited in later legislative sessions.

The bill, prior to its passage, was opposed by law enforcement officials in all counties. Neither Police Chief Harry Kubojiri nor Prosecutor Mitch Roth returned phone calls Thursday seeking comment on the bill.

In an April 6 letter to the Senate Judiciary and Labor and Ways and Means committees, Kubojiri noted that among his concerns is allowing patients 8 ounces of marijuana in a 30-day period “will lead to severe addiction given that 8 ounces of marijuana equates to 448 marijuana cigarettes” or “approximately 15 marijuana cigarettes per day.”

DOH spokeswoman Janice Okubo said in a Thursday email there will be recruitment for five positions appropriated for medical marijuana administration and dispensary licensing as soon as the law is enacted. She added that as more information becomes available, it will be posted at www.health.hawaii.gov/medicalmarijuana.

Ige already has signed into law a separate medical marijuana patients’ bill of rights that Green sponsored.

“Employers and landlords and anybody in society cannot discriminate against anybody that has legitimate medical marijuana needs,” Green said.

“We passed that bill in tandem, because there are going to be more patients, now that there are more dispensaries.”

Email John Burnett at jburnett@hawaii tribune-herald.com.