In Hawaii, inter-island trade in medical cannabis opens up new avenues

Several medical cannabis businesses in Hawaii are pioneering a new, unique sales avenue by selling and delivering cannabis flower and other cannabis products from island to island within the state.

This inter-island cannabis trade, by plane, helicopter, or boat, is a first in Hawaii and a rare phenomenon in the United States. due to the federal ban on cannabis. Although the details of transporting these products remain confidential due to potential legal and security concerns, Hawaiian lawmakers in June approved a bill authorizing state-licensed businesses to sell cannabis wholesale to cannabis businesses located on other islands. The regulation went into effect in August.

One of the main motivations for this inter-island trade is to address persistent stock shortages of products in Hawaii's medical cannabis market since its inception six years ago. These shortages are due to the state's market having a limited number of licenses and its isolated location.

In response, companies such as Big Island Grown, which operates a 3,200-square-meter indoor cultivation facility on the island of Hawaii, completed the first wholesale transaction between the state’s islands with the Green Aloha dispensary in Kauai. This transaction increased Green Aloha’s gross revenue by 40% in just nine days. Big Island Grown also received permission to distribute candy, vape pens of live resin and other concentrates to retailers, in response to patient demand.

Although similar transport methods are rare in the US, some operators in Alaska and in the State of Washington legal cannabis was transported by sea and air to reach their retail locations. However, these activities carry significant risks, as cannabis remains illegal under federal law. In Hawaii, high operating costs, tariffs, and logistical challenges exacerbate the difficulties faced by medical cannabis operators in a state with few industries outside of tourism and real estate.

The Hawaiian medical cannabis market has experienced stagnation in patient registrations and profitability challenges, partly due to a well-established illicit market and a limited number of dispensaries. Nevertheless, the recent introduction of inter-island cannabis commerce could serve as a model for other markets and improve accessibility for patients across the Hawaiian islands.

Efforts to legalize adult-use cannabis in Hawaii have encountered difficulties in the past, but the industry is optimistic about the possibility of progress in the 2024 legislative session.

House Speaker Scott Saiki, plans to work on a legalization bill and retail sales for adult use, and Governor Josh Green has signaled his willingness to sign such a bill if it reaches his desk.