A recent report by the Hawaii State Department of Taxation found that legalizing adult-use marijuana in the state would generate approximately $50 million in tax revenue annually, adding to the medical marijuana tax revenue collected in the past fiscal year. We project well over $2.5 million in taxes. But state legislators believe the taxes collected won’t cover the costs of enforcing recreational weed legalization.
At a meeting of the Hawaii Cannabis Dual Use Task Force on Monday, State Tax Commissioner Isaac Choi announced that from July 1, 2021 to June 30, 2022, medical marijuana sales, corporate income taxes, and employee reported tax revenue of $2.557 million against withholding of He also estimates tax revenue from legalizing recreational marijuana will be about $50 million.
State Rep. Ryan Yamane, chairman of the House Health and Human Services Committee, said in a livestreamed news show that projected tax revenues would not be enough to pay for regulatory costs related to legalizing adult-use marijuana. He said it was likely.
“There’s very little you can pay for with $50 million.” Yamane said“Therefore, we don’t have this huge windfall that can subsidize education and health services.”
Democratic lawmakers said the amount would make it difficult to fund the infrastructure needed to monitor the recreational marijuana industry statewide.
“It’s hard to use it to establish a new program.” Yamane said“We spend $50 million a year hiring employees, doing oversight, and doing all the different aspects of adult recreational use.”
Cannabis Industry Conflict Prediction
However, representatives of Hawaii’s medical marijuana industry have disputed the tax office’s prediction that adult-use cannabis legalization would bring the state about $50 million in revenue. Tai Cheng, president of Green Apothecary Pharmacy, said recreational marijuana sales, and thus tax revenue, are likely to be higher than state projections.
Cheng said the agency’s total annual sales for recreational cannabis are between $200 million and $273 million, as it’s unclear how much tourists visiting the island will spend on adult cannabis. He predicted a stronger $400 million in recreational weed sales, similar to what Hawaii spends on liquor each year. could total about $80 million.
Chen says Hawaii’s cannabis industry has a lot of room to grow. As of the end of September, 33,725 patients had valid medical marijuana cards. according to the information From the State Department of Health. And with only eight medical marijuana dispensaries spread across the island, each company can actually access a small fraction of the total patient population.
“We are actually serving about 8,000 to 9,000 patients,” Cheng says. “And those patient numbers have increased over the past three years, especially during the pandemic, and his revenue has doubled from what he had two years ago.”
Task force to explore legalization in hawaii
The Cannabis Dual Use Task Force was created last year by state legislatures opposed to legalizing recreational cannabis and current Democratic Gov. David Ige to examine issues surrounding further reform of Hawaii’s marijuana policy. Hawaii lawmakers legalized the medical use of cannabis in 2000, making Hawaii the first state to legalize medical marijuana through legislative action rather than a ballot box. However, medical marijuana dispensaries were not legalized until 2015.
Cheng said he hopes the new governor’s administration will herald renewed progress in cannabis legalization following next week’s general election.
“I think there’s a very positive mood right now when it comes to adult marijuana use, with President Biden’s recent pardon on federal drug charges,” Chen said.
Maui task force member Terilynne Gorman said that if the purpose of legalizing marijuana is to generate income, the taxes levied on medical marijuana and expected from adult cannabis do not meet people’s expectations. She said the projected tax revenue “doesn’t look like a windfall for the state of Hawai’i. …This is not the tax windfall that people are expecting.”
Gorman added that state lotteries could be “much more lucrative” if the goal was to generate tax revenue for the national treasury, adding, “I’m not here to discuss that. I understand,” he said.
Yamane told reporters that after years of failed attempts, the task force was Hawaii’s best chance to legalize cannabis. He added that he was still collecting them.
“There will be many opportunities for the public to speak up and testify for or against,” he said. “But what we wanted was to dispel some myths and clarify what is true.”
As voters in five states decide to legalize cannabis in next week’s elections, industry representatives in Hawaii hope the state isn’t far behind.
“We all need to stay vigilant and be prepared for the public to offer their opinions and comments,” said Randy Gonce, director of the Hawaii Cannabis Industry Association. It’s the closest we’ve come to legalizing cannabis in history.”