Hawaii could have medical marijuana dispensaries as soon as July 15 next year under a bill approved by a House-Senate conference committee Monday.

Medical marijuana has been legal in Hawaii for 15 years, but the law says patients or their caregivers must grow it rather than buy it.

If House Bill 321 passes the Legislature this week and is signed by Gov. David Ige, there could be as many as 16 dispensaries statewide by July 15, 2016. The measure allows up to eight companies to receive licenses to operate two dispensaries and two marijuana farms each.

The bill is the culmination of years of advocacy by patients and their families, who see marijuana as a necessary drug to help cope with disorders ranging from epilepsy to chronic pain.

Senate President Donna Mercado Kim embraces Representative Della Au Belatti after both houses agreed on committee meeting. 4 may 2015. photograph by Cory Lum/Civil Beat

Senate President Donna Mercado Kim embraces Rep. Della Au Belatti after a conference committee approves a bill to establish medical marijuana dispensaries.

Cory Lum/Civil Beat

While there’s been political consensus since January that the Legislature would establish a dispensary system this year, the process has been far from smooth. HB 321 had apparently died Friday after Rep. Della Au Belatti and Sen. Josh Green couldn’t agree during the final hour of conference committee negotiations.

Under pressure from constituents and lobbyists, House and Senate leaders revived the bill, removed Green as lead Senate negotiator and extended the conference committee deadline to ensure that the measure could pass.

It’s not the first time Green has lost his chairmanship in the midst of heated negotiations. It’s unclear what he thinks about the new version of the bill — he declined to comment Monday.

Meanwhile, HB 321 is expected to clear both chambers, given the extraordinary lengths to which House and Senate leadership went to keep it alive. If it becomes law, it will open the door to more access to medicine as well as a potentially lucrative new industry.

Comparing the Bills

HB 321 would allow for eight dispensary licenses, including three on Oahu; two on the Big Island; two in Maui County; and one on Kauai. Each licensee could have up to two retail locations and two production centers.

Individual applicants must have been legal residents of Hawaii for at least five years, be at least 21 years old and have no felony convictions. Business applicants must have been Hawaii-owned for at least five years and have $1.2 million in the bank, among other requirements.

Representative Della Au Belatti walks out with Chair/Senator Will Espero during 1 hour recess.  4 may 2015. photograph by Cory Lum/Civil Beat

Rep. Della Au Belatti walks out with Sen. Will Espero after a conference committee on medical marijuana dispensaries.

Cory Lum/Civil Beat

The version of the measure that passed Monday stuck to Green’s preference that whoever owns a marijuana dispensary also owns its production center. But many other aspects reverted back to Belatti’s original preference for a larger program rolled out over a longer time frame.

Green had wanted to require businesses to have at least $2 million and individual applicants to be limited to health care providers. The final version doesn’t have any such requirement — during Friday’s negotiations, Green had dropped his preference for a requirement that applicants be health care provider.

Green also had originally pushed for allowing just one licensee per county, while Belatti originally requested 26. The new bill will allow eight total, with three on Oahu.

Finally, Green originally wanted the state to start accepting applications as soon as July 15 this year, with licenses being awarded first-come, first-served. Belatti said the license awards should be merit-based. This was the final sticking point that halted negotiations Friday night.

Under the version approved Monday, the state Department will start accepting licensee applications on Jan. 11, 2016.

“You’re going to see an explosion on the number of patients especially on the island of Oahu and the number of licenses is going to be inadequate.” — James Anthony, medical cannabis attorney

The application window will close Jan. 29, after which the Department of Health will evaluate the applications. Licensees will be announced April 15.

James Anthony, an attorney who specializes in medical marijuana, criticized the requirement that licensees must own both dispensaries and production centers.

Anthony, who is originally from Hawaii, has worked in several states including California, Rhode Island and Nevada consulting on medical cannabis.

He’s glad that the final version deleted the requirement that licensees must be health care providers and that legislators decided to stick with a merit-based application process instead of first-come, first-served. But he asserted that with the establishment of dispensaries, the number of patients on Oahu will grow astronomically.

“You’re going to see an explosion on the number of patients especially on the island of Oahu and the number of licenses is going to be inadequate,” Anthony predicted.

Rafael Kennedy, executive director of the Drug Policy Forum of Hawaii, said that he is generally happy with the bill, although he is concerned about a plan to phase out the caregiver program and wishes that there could be more than one license on Kauai.

Still, he’s grateful that the measure has made it this far. The group’s success has been aided Bob Toyofuku, an influential lobbyist whom the Drug Policy Forum of Hawaii hired three years ago.

“There’s no such thing as a perfect bill,” Kennedy said.

A Potentially Lucrative Market

Based on his analysis of San Jose’s medical marijuana market, Anthony thinks Hawaii’s industry could grow to $25 million and $50 million in annual sales.

Nationally, medical and recreational marijuana is a $2.7 billion industry and growing. Locally, lawmakers and lobbyists have been tight-lipped about who is interested in cashing in on Hawaii’s new law, but there’s definitely a lot of interest.

Hawaii already has more than 13,000 medical marijuana patients and that number is expected to increase substantially once dispensaries are available. HB 321 would also make more people eligible to buy the drug by adding post-traumatic stress disorder to the list of qualifying sicknesses.

The bill is designed to attract businesses with lots of resources: the application fee is $5,000 and applicants awarded with licenses must pay $75,000 within a week. Licensees must also pay an annual fee of $50,000.

Senators group together before 1 hour recess during marijuana dispensary meeting. 4 may 2015. photograph by Cory Lum/Civil Beat

Lawmakers group together during the medical marijuana dispensary hearing.

Cory Lum/Civil Beat

Sen. Will Espero, who replaced Green as lead Senate negotiator, confirmed Monday that many individuals and companies have expressed interest in the legislation, although he shook his head when asked if he had spoken with any of them.

Belatti also denied talking to companies. In an interview last week, so did Green, although the senator alleged during last week’s hearings that he had received threats from the mainland about his insistence on keeping dispensaries local.

One California-based company, Pacific Eclipse, which describes itself as an “industry leader in producing high quality and safe medical marijuana products,” registered for a business license in Hawaii on Jan. 22 this year, the day after the legislative session began.

Michael Nguyen, vice president of policy and strategy, said that the company is providing policy consulting for United Food and Commercial Workers Local 480, a union that is supporting the dispensary bill.

The company and the union are being represented by Capitol Consultants, one of the top lobbying firms on the island.

“At this time, our only business in Hawaii is providing policy and technical advice,” Nguyen wrote in an email to Civil Beat.

It’s Not the First Time for Green

In the midst of Friday’s negotiations on HB 321, Green admonished Belatti for making eye contact with his colleagues rather than him as she spoke.

“You’re not actually looking at me when you say those things, and I will be making the decision on this bill,” he told her.

Perhaps he should have known better — it’s not the first time the lawmaker has lost his committee conference chairmanship during heated negotiations.

Sen. Josh Green during marijuana hearing. 27 april 2015. photograph Cory Lum/Civil Beat

Sen. Josh Green speaks during a hearing on medical marijuana dispensaries.

Cory Lum/Civil Beat

Rep. Calvin Say, who has served in the state Legislature since 1977, said the only other time he remembers a lawmaker losing his or her chairmanship during conference committee occurred when Green was a representative.

Back in 2007 when Say was House Speaker, the lawmaker said he removed Green as chair of a conference committee that was negotiating a bill to reorganize the Hawaii Health Systems Corporation.

The switch came less than two hours before a midnight deadline, Say said, because the speaker thought Green was being too stubborn the bill.

Say said Green has “mellowed out” since then, although he can still be “hard-headed.”

Say actually agrees with Green more so than Belatti on many aspects of HB 321, but thinks that House and Senate leadership did the right thing by passing the bill because most lawmakers wanted to do so.

“Sometimes I think chairs grasp the issue so much that they want control of everything,” Say said.

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