In Hawaii, People Prefer Black Market Cannabis to State-Managed Facilities

Indeed, recreational cannabis is still illegal in Hawaii, so Decriminalization will only take place in 2019— such high numbers aren’t all that shocking. I’m claiming

When asked why people choose black market cannabis, one of the most common answers is high taxes.In the current state of the industry, the cannabis market in Hawaii is Valued at approximately $240 millionWith recreational legalization, it’s estimated that it could reach $354 million.

Speaking of which, recent report It argues that such figures are modest compared to the $8 billion annual tax collection the state is already seeing. may have legal incentives.

Some respondents to the report believe that if Hawaii is legalized, it should avoid “annoying levels of regulation and taxation” to mask the state’s illicit market.

Still, this black market problem may go well beyond taxes. There are currently only eight legal clinics statewide. Both struggled to turn a profit.

Only three of these dispensaries are at breakeven, according to Randy Gonce, executive director of the Hawaii Cannabis Industry Association. And none of them pay investors a profit.

Gonce continued: “On paper, they’re not a successful business. You’re working on a very limited consumer base with very strict regulations. You can’t… at the federal level – it’s just hard to get into the industry.”

So how do we get more people into state health care programs?

Analysis of Hawaii’s Medical Cannabis Program

Medical cannabis has been legal in Hawaii since 2000, but hasn’t made much progress in the last two decades.

One of the biggest problems is the very limited list of eligibility criteria. Only 15 diseases are accepted for prescription. Still, the severity of these conditions plays a big role in whether doctors recommend marijuana as a treatment.

But an even bigger problem is the lack of access to cannabis.Hawaii is currently 35,000 registered patientsAs previously mentioned, all of these patients are confined to eight clinics within the state that are confined to specific islands. Then medical patients on Lanai or Molokai: No direct access to medical cannabis.

At the top of these issues is 4.5% general consumption tax (GET) Comes with all marijuana products. Indeed, this number is lower than other regions of the country. For example, in California, 15% consumption tax All retail cannabis products.

However, we have seen more farms growing the product because access to business licenses is more achievable in California. price reduction— enabling products that are overall more affordable for consumers.

On the other hand, in Hawaii, cultivation licenses are $75,000 fee— Annual renewal fee of $50,000. The market has been around for some time and it is clear that there is little profit within the industry, so it is very easy not to invest in such ridiculous fees.

Hawaiians are importing cannabis because production is in short supply

So how do you avoid problems in Hawaii’s medical industry?

The simple answer is recreational legalization to expand the consumer base. However, this can be harder than it looks.For one thing, Hawaii voters almost 50/50 split about the problem. Second, outgoing Gov. David Ige is against recreational use and has kept lawmakers away from the topic in recent years.

The upcoming midterm elections will play an important role in how we tackle this issue in the years to come. Lieutenant Governor Josh Green (Democrat) supports legalizing entertainment, while Lieutenant Governor James “Duke” Iona (Republican) opposes.

Still, even with legalization, the Hawaiian market could continue to struggle. And this is simply due to the fact that the state’s industry is lacking in terms of production. In fact, most of Hawaii’s cannabis is not even grown within the state and is shipped from California.

That said, the source of this problem is thousands of miles across the Pacific, so it may not be possible for Hawaii to tackle the problem of illegal markets.

as a task force report state: “Illegal California cannabis is cheap and relatively good quality. Even if Hawaii legalizes adult use, this market dynamic won’t go away.”

To address this issue immediately, Hawaii’s law enforcement agencies have become more aggressive in prosecuting illegal activities. But even such aggression could not stop the growth. As the Task Force reported, the illegal market has grown so large that states are already part of the national cannabis market.

So what can you do in Hawaii?

Ultimately, Hawaii needs to create a fairer legal market to enter the black market. As mentioned earlier, the price of entry into this industry is ridiculously high and capital investors are sick of even such massive financial incentives because there is no demand.

according to gonsu: “What we want to do is keep the barriers to entry very low, but there are still certain things to maintain the integrity of the business.” He oversees the group and tracks cash flow. There is a need and the government has taken this further by saying that the products need to be tested for purity and potency.

However, these changes should only be implemented to lower prices for consumers. Currently, legal Hawaiian cannabis is 40% to 100% more expensive than illegal market cannabis. For example, an ounce costs about $350 in pharmacies, but drops to $250 in the illicit market.

In order to bring the price down, we need to increase production within the state. And to increase production, states must make the market more accessible to new entrants.

As report shows: “Issues related to market structure and regulation create uncompetitive high prices compared to gray. [illicit] market. Laws and regulations that limit size, market size, competition and specialization create unfavorable market structures. ”

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