Hawaii Officials Seek Expert Analysis On Potential Marijuana Market Demand As Lawmakers Continue To Consider Legalization

Hawaii officials are seeking proposals to assess the state’s current medical marijuana program—and also estimate demand for recreational cannabis sales if the state eventually moves forward with adult-use legalization.

The Hawaii Office of Medical Cannabis Control and Regulation (OMCCR) has put out a request for proposals (RFPs), soliciting input from existing vendors to “conduct an independent assessment of the Medical Cannabis Dispensary Licensing framework and an analysis of the demand for cannabis, both for medical cannabis and adult-use, in Hawaii should the State legalize adult-use of cannabis.”

While Hawaii’s Senate approved a recreational marijuana legalization bill in March, proposals to end prohibition have consistently stalled out before reaching the finish line. But the regulatory agency evidently sees a need to prepare to the potential reform—a policy change that is supported by Gov. Josh Green (D).

There are two key parts of OMCCR’s RFP: 

1. Evaluate Hawaii’s current medical cannabis dispensary licensing framework; and
2. Conduct a market analysis of the demand for medical and adult-use cannabis and assess the economic, health, public safety, and environmental impacts of an adult-use cannabis market in Hawaii.

“In recent years, there has been growing interest in the legalization of cannabis for adult use,” the RFP says, noting that the legislature has considered at least four comprehensive reform proposals in recent years.

“OMCCR requires a market demand study to predict total demand (including demand from Hawaii residents and tourists) for cannabis and cannabinoid product from all sources, including medical cannabis, adult-use cannabis, home cultivation, hemp-derived cannabinoid products, and the illicit market,” the notice says.

“The market demand study should also assess the economic impact of an adult-use cannabis program, as well as its effects on the medical cannabis program, public health and safety, and environmental health and safety. The assessment and study will guide the development of regulatory frameworks, including licensing, production quotas and taxation levels, and will inform the planning of policies, education campaigns, and measures to protect public health and safety and environmental health and safety.”

Submissions for the RFP are due by November 1, and contractees are being offered $94,100 to carry out the analysis. The contracted work and final report must be done by March 15, 2025.

Whichever organization receives the contract must use predictive modeling on cannabis supply and demand over the next five years “under the scenario that Hawaii legalizes adult-use cannabis.”

They’d need to examine the future market size from all cannabis sources, the number of retailers and dispensaries that would be required to meet anticipated demand, the number of different license types that’d be needed and market saturation points “using historical data from other states with similar population and socioeconomic characteristics to Hawaii.”

The contractee “shall assess long-term costs associated with adult-use cannabis, including on the medical cannabis program, regulation and enforcement, public health and environmental health and safety.”

“The market demand study for adult-use cannabis should draw from experiences in other states that have transitioned from legalizing medical cannabis only to legalizing both medical cannabis and adult-use cannabis,” the notice says.

The RFP was released just weeks after the governor signed into law a bill to create a task force charged with crafting legislation that would expunge certain criminal records, likely including some past marijuana arrests and convictions.

In the meantime, Green signed a separate bill into law, HB 1595, to create a single-county pilot program that will expunge certain non-conviction marijuana records.

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As originally introduced, that measure from Rep. David Tarnas (D) would have directed state officials to automatically expunge tens of thousands of arrest and conviction records for low-level marijuana possession. But the Senate Judiciary Committee later gutted the proposal, replacing the statewide plan with a pilot program in Hawaii County that would apply only to non-conviction arrest records.

Advocates have said the limited reform measures represent victories despite the legislature’s failure to pass a marijuana legalization bill this session. A separate bill to expand the state’s existing law decriminalizing small amounts of cannabis also failed to pass this session.

Following the failure of the broader legalization push, Green said in April that he has “a possible solution” to the situation: vastly expanding the Hawaii’s existing medical cannabis system to allow people to register based on any health concern rather than needing to have one of a specific list of conditions.

“This would make it very available—that’s marijuana—for those who choose it in their lives,” the governor said in an interview with Hawaii News Now, “and it would still keep kids safe, which has been everyone’s priority.”

At the same time, Green reiterated his support for full recreational legalization.

“I think for adults who can responsibly use marijuana, it should be legal,” he said.

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Photo courtesy of Chris Wallis // Side Pocket Images.