HB 321 Frequently Asked Questions

Note: All information given here is general in nature and is not legal advice.

To view the actual text of the bill, see this document. References to the text of the bill are in the form of (page:line – line).

If you have questions that are not addressed here, please send an email to info@mcchi.org and we’ll try and keep the page updated with answers.

Will this affect my ability to grow my own medicine?

No. (46:5-9) There are no provisions in the law that affect patients’ rights to grow their own medicine. See page 46: Nothing in this chapter shall be construed as prohibiting a qualifying patient or primary caregiver from cultivating or possessing an adequate supply of medical marijuana pursuant to part IX of chapter 329.

Will my caregiver have to stop growing medicine?

Many caregivers will need to stop growing medicine on December 31, 2018 (56:11-57:10). Until this time, caregivers will continue to cultivate and provide for their patients. Some caregivers will be exempt from this phaseout, including caregivers who are the parents or legal guardians of patients who are minors or adults lacking legal capacity, and caregivers on islands without any functioning dispensaries. This provision will not go into effect until after the Department of Health has had the option to issue additional dispensary licenses in 2017.

Caregivers will still be allowed to possess medical cannabis, and to help their patients cultivate it, process it, and use it.

We, and other activists, will be working to ensure that no patients lose access to their medicine in 2019, but if you are worried about losing the help of a caregiver that you know and trust, please help us to demonstrate the importance of this relationship by writing to info@mcchi.org to tell your story so we can share it with legislators.

How many dispensaries will be allowed under the law?

Initially, there will be 16 dispensaries (5:9 – 6:2). There will be 8 dispensary licenses issued, and each dispensary license will allow for 2 retail locations and 2 grow sites. Dispensaries will be distributed as follows: 6 dispensaries on Oahu, 4 on Hawaii island, 4 in Maui County, and 2 on Kauai.

Starting in October 2017, the Department of Health may issue more licenses, up to a maximum of 1 per 500 patients in a county (6:10 – 6:15). If the current number of patients remains the same, this would be a maximum of around 26 licenses.

When will they be open?

The first cohort of applicants may begin operations as soon as July 15, 2016 (6:3-7).

The law does not state when new licensees, added after October 2017, will be able to begin dispensing medical cannabis, but this will likely be established in the Department of Health’s administrative rules.

Where will dispensaries and grow-sites be located?

There are several requirements for where dispensaries and production centers (grow-sites) can be located. Retail dispensary locations and production centers may not be at the same location (6:8-9). The current law says that: All dispensary facilities, including but not limited to production centers and retail dispensing locations, shall be enclosed indoor facilities… (15:16-18). It is not yet clear if this will include greenhouses.

Dispensaries and grow sites may not be located within 750 feet of a playground, a public housing complex, or a school (44:5-8).

Dispensaries must comply with county zoning laws, so production centers must be located where agriculture is allowed, and retail establishments must be located where commercial activity is allowed (53:6-8).

Can dispensaries ship medicine between islands?

No. While the bill does establish some protections on the transportation of marijuana, it specifically excludes protections on the inter-island transportation of marijuana. Again, this is primarily to do with federal laws that prohibit the interstate transportation of marijuana, which includes transportation by sea or air in this case. (62:14-16)

 

Will there be a registry or database overseeing all the dispensaries?

Yes, the Department of Health has been charged with setting up a tracking system to provide oversight of the dispensaries that will track the product, from planting through dispensing. Dispensaries will be connected to this system and update it in real time. Patients will benefit as it keeps track of amounts purchased and allows a check for product availability at other dispensaries.  (17:4-20:2)

What types of products will they be allowed to carry?

Initially, in addition to selling marijuana, dispensaries may offer the following “manufactured” marijuana products:

(1)  Capsules;

    (2)  Lozenges;

    (3)  Pills;

    (4)  Oils and oil extracts;

    (5)  Tinctures;

    (6)  Ointments and skin lotions; and

    (7)  Other products as specified by the department. (29:11-20)

No dispensary nor individual may use butane in the manufacture of of these products (56:6-10). Products made using other extraction methods and media (such as alcohol, CO2, fats and oils) will still be allowed.

Will dispensaries be able to sell seeds and clones?

This is not entirely clear. At present, there is nothing that would prevent dispensaries from selling seeds or live plants to patients who prefer to grow their own medicine.

What kind of security will they have?

The Department of Health will ultimately establish what the security requirements will be, but the law requires as a minimum:

For production centers:

  • Video monitoring and recording of the premises;
  • Fencing that surrounds the premises and that is sufficient to reasonably deter intruders and prevent anyone outside the premises from viewing any marijuana in any form;
  • An alarm system; and
  • Other reasonable security measures to deter or prevent intruders, as deemed necessary by the department;

For retail dispensing locations:

  • Presentation of a valid government-issued photo identification and a valid identification as issued by the department pursuant to section 329-123, by a qualifying patient or caregiver, upon entering the premises;
  • Video monitoring and recording of the premises;
  • An alarm system;
  • Exterior lighting; and
  • Other reasonable security measures as deemed necessary by the department; (23:7-24:12)

Who can apply for a license to operate a dispensary?

The requirements for operating a dispensary are very stringent. The application must include both an individual applicant and an “applying entity” that can be a company or organization.

The individual applicant must have been a legal resident of the State for at least five years before the date of application. They must be at least twenty-one years of age and have had no felony convictions.

The applying entity must have a Hawaii tax identification number, a department of commerce and consumer affairs business registration division number and suffix, and a federal employer identification number. A majority of the organization must be owned or made up of Hawaii legal residents or entities wholly controlled by Hawaii legal residents who have been Hawaii legal residents for at least five years immediately before the date the application was submitted. It also must show that it has at least $1,200,000 in the form of bank statements or escrow accounts, and that this has been under the control of the applying entity for at least ninety days immediately preceding the date the application was submitted.

It must be composed of principals or members, each of whom has no felony convictions. (7:1 -8:17)

Where and when can I get an application?

Applications for licenses will be available to the public on January 11th, 2016. (8:18-9:2) They will likely be available at the Department of Health Medical Marijuana Website. As soon as applications are available, Medical Cannabis Coalition of Hawaii will make an announcement to its mailing list to that effect.

What information will be required on the application?

The application will require at least the following information:

(1)  Legal name and date of birth of individual applicant;

    (2)  Last four digits of individual applicant’s social security number;

    (3)  Validation code from an eCrim report for the individual applicant generated by the Hawaii criminal justice data center no earlier than December 12, 2015, at 8:00 a.m., Hawaii-Aleutian Standard Time;

    (4)  Street address, telephone number, fax number, and email address of the individual applicant;

    (5)  A tax clearance certificate issued by the department of taxation dated not more than thirty days prior to the date of the application;

    (6)  Name of the applying entity and any other name under which the applying entity does business, if applicable;

    (7)  Street address, telephone number, fax number, and email address of the applying entity;

    (8)  Date the applying entity was organized under the laws of Hawaii;

    (9)  A certified copy of the organizing documents of the applying entity;

    (10)  A copy of the applying entity’s bylaws;

    (11)  Federal employer identification number of the applying entity;

    (12)  Hawaii tax identification number of applying entity;

    (13)  Department of commerce and consumer affairs business registration number and suffix of the applying entity;

    (14)  Name(s) of all owners of the applying entity, in whole or in part, and their percentage of ownership;

    (15)  Date when continuous legal residence in Hawaii began for each Hawaii legal resident that owns a percentage of the applying entity;

    (16)  Total percentage of the applying entity that is owned by Hawaii legal residents;

    (17)  Designation of the county for which the dispensary license applied for and proof that the required minimum financial resources of $1,200,000 are met;

    (18)  Total dollar amount of financial resources under control of the applying entity in the form of bank statements or escrow accounts;

    (19)  Date from when financial resources have been continuously controlled by the applying entity; and

    (20)  Copies of the entity’s bank statements for the twelve months prior to the date of the application. (10:14-12:17)

How will the licenses be awarded?

All of the applications that come in during an open application period will be checked to see if they meet the requirements. If they do, the Department of Health will put them in a pool and choose the best applicant according to the following criteria:

  • The applicant’s ability to operate a business;
  • Financial stability and access to financial resources;
  • Ability to comply with the security requirements developed by the department of Health,
  • Capacity to meet the needs of qualifying patients;
  • Ability to comply with criminal background check requirements
  • Ability to comply with inventory controls; (22:3-20)

The Department of Health will award licenses based on the merit of the applicant. More details about the selection process will be available by January 4th of 2016 (14:3-7).

Do I need a license in order to get involved in the medical marijuana industry?

Licensees may be able to subcontract the production and distribution to other entities so long as the subcontractors meet certain requirements, which will be established by the Department of Health. (4:14-17)

What are the fees required to operate a dispensary?

There is a $5,000.00 non-refundable fee to apply for a license, whether or not that application is selected to receive a license. There is also a $75,000.00 fee that is due once an applicant has been approved, so successful applicants will need to pay a total of $80,000.00. (9:11-17)

Operating dispensaries must renew their license annually for a fee of $50,000.00. (13:18 – 14:2)

Will growers be separate from dispensaries?

No. The final version of the bill provides for only 1 type of license, which can contain up to two retail dispensaries and up to two production centers. (5:9 – 6:2) That said, the bill seems to provide for licensed dispensaries to “subcontract” parts of their operations, either production centers or retail locations, to other entities that meet the same security and safety standards . There may be opportunities for people and organizations that are able to grow medicine effectively but not able to operate a retail dispensary to be involved as subcontractors.

Will dispensaries sell cannabis to minors?

No. In fact, the bill creates a new criminal penalty for selling medical cannabis to minors. (38:20-39:8). However, nothing in the bill prevents minor patients from accessing the medical marijuana program. Their caregiver may purchase the patient’s medicine at the dispensary. (33:1-4)

The bill also contains some restrictions on advertising and packaging to avoid appealing to children. At a minimum, they require the use of packaging that:

(1)  Is child-resistant and opaque so that the product cannot be seen from outside the packaging;

    (2)  Uses only black lettering on a white background with no pictures or graphics;

    (3)  Is clearly labeled with the phrase “For medical use only”;

    (4)  Is clearly labeled with the phrase “Not for resale or transfer to another person”;

    (5)  Includes instructions for use and “use by date”;

    (6)  Contains information about the contents and potency of the product;

    (7)  Includes the name of the production center where marijuana in the product was produced, including the batch number and date of packaging;

    (8)  Includes a barcode generated by tracking software; and

    (9)  In the case of a manufactured marijuana product, a listing of the equivalent physical weight of the marijuana used to manufacture the amount of the product that is within the packaging,… (30:4-31:9)

Are there new criminal penalties contained in the law?

There are several new criminal penalties in the law for various things such as breaking into dispensaries, diverting medical cannabis to the black market, and processing medical cannabis using butane. The new penalty that many patients were concerned about, a requirement on how medical cannabis is stored, has been removed from the bill. The new penalties are:

  • A class C felony for any person who gets any medical marijuana by fraud or by using a fake permit. (33:11 – 34:6)
  • A class C felony for anyone who isn’t authorized to enter a dispensary or production center to knowingly do so, or for anyone who works at a dispensary or production center to intentionally let someone who isn’t allowed on site in. (34:7 – 36:13)
  • A class B felony for anyone who sells medical cannabis products to minors that aren’t patients. (38:20-39:8)
  • A class C felony for intentionally diverting it for personal use or to sell. (39:9-40:2)
  • A class C felony for falsifying dispensary records. (40:3-20)

 

I have a card from another state. Can I access dispensaries in Hawaii?

Yes, beginning January 1, 2018. The Department of Health will be responsible for establishing a “reciprocity” system whereby people with valid registrations from other states may register with the state of Hawaii, and use dispensaries in the state. This does not mean that people who are licensed in other states will be allowed to purchase from Hawaii’s dispensaries without first registering with the Hawaii Department of Health. (33:5-10)

What educational efforts will be part of this process?

The bill requires that the Department of Education conduct a continuing education and training program to explain and clarify the purposes and requirements of this law and to provide substance abuse prevention and education. The Department of Health is also required to employ a full-time medical marijuana health educator. (46:17-21 and 47:1-5)

 

Was Post Traumatic Stress Disorder (“PTSD”) added as a new qualifying condition?

Yes. When the new law takes effect, doctors working with patients suffering from PTSD will have the discretion to recommend medical marijuana to their patients. . (59:6)

How much will medicine cost, and what is the tax?

There is no way to know how much medicine will cost. Medical cannabis will be priced by those who are selling it. We hope that medicine will be affordable and accessible, and that is part of the reason we have insisted on a competitive system, where patients can choose the dispensary that offers the best quality and service at the lowest price. We anticipate based on the experience of other states’ dispensary programs that over time prices will fall, and quality will improve as dispensaries respond to demand and the number of dispensaries increases.

The only tax that will be applied to medical cannabis is the standard General Excise Tax – 4% for neighbor islands and 4.5% on Oahu. A 25% tax proposed in one committee hearing was removed.

 

If I cannot afford dispensary prices, what options do I have?

Patients will still have the option of growing their own medicine. Patients who cannot do so but cannot afford dispensary prices can still find a caregiver to help them grow their medicine until (with some exceptions) the caregiverʻs ability to grow for a patient sunsets in 2018 (56:11-21, 57:1-9).

 

I do not agree with parts of the law. How can I get involved in improving it?

This bill is the biggest step forward for Hawaii’s patients in the 15 years of the program’s history. Safe, legal access to medical marijuana is a complex matter balancing the interests of patients, government, public safety, and the businesses or organizations operating the dispensaries – all against a nuanced policy backdrop from the federal government, where medical marijuana is still considered illegal but tolerated by the Department of Justice under certain conditions.  Marijuana policy in Hawaii and the U.S. is in a tremendous position for progressive change. The Medical Cannabis Coalition of Hawaii will continue to advocate for sustainable policies that benefit patients. We urge patients, caregivers, doctors, and other stakeholders to give feedback on how well the dispensary law works for them, to join our mailing list, and to be involved in the Department of Health’s upcoming administrative rulemaking process, the Hawaii State legislature, and the federal government on matters of medical marijuana policy reform.