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Hawaii Sees Legalizing Adult Use Marijuana As Huge Boon to Island Economy

Legal marijuana is certain to appeal to the 9 million annual visitors but industrial hemp also could boost self-reliance in the Aloha State.

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Liberal voters and cannabis advocates can be loud and proud in Hawaii. Even conservatives in the Aloha State don't match the profile of mainland conservatives. Many are pro-gay rights, believe in climate change and even support cannabis legalization.

Matt Emrich

Perhaps that's in-part what made the island of Kauai a perfect host to the recent International Cannabis Business Conference (ICBC) December 1-3, 2017. Hawaii is just one stop of the ICBC conference series that takes place around the world in emerging cannabis markets like Berlin and Vancouver.

Related: 9 Business Ideas for People Looking to Cash in on the Marijuana Boom

Cannabis, culture and complications.

An abundance of locally grown cannabis and subjective law enforcement have woven the tolerance of cannabis into Hawaii's culture. It's more c'est la vie than clandestine. After all, Hawaiians are less stressful and happier than residents of any other state. In fact, as long ago as 1979 Rolling Stone named cannabis Hawaii's No. 1 crop, above sugar and pineapple.

If the state is so progressive, why then has it not fully legalized recreational cannabis consumption? That was one of many key talking points at this island cannabis conference.

The Hawaiian black market has worked just fine for most of its residents, so there's been no huge grassroots push for legalization. Banking and tax challenges, retail management and laws are all unappealing elements one needn't be concerned with when things are seemingly working just fine behind the scenes. And precedent hasn't been inspiring.

Related: Why Your Cannabis Business Is Failing, and How You Can Fix It

Medical marijuana legislation has been a painfully long and restrictive process in Hawaii. The state's initial Medical Use of Cannabis law was introduced in 2000 but it took 17 years for the Hawaii's first dispensary to open. Legislators hadn't thought things all the way through originally: the state law decriminalizing medical use of marijuana for registered patients didn't specify where these patients were supposed to get their supply.

Sure, you could now grow it yourself and now carry it around without problems, but if you weren't the horticulture type, there was no place to buy it other than the black market. And your friend's cousin Hopaka doesn't require paperwork.

All that changes when you factor in the state's greater overall needs, which could reach as much as $80 million in revenue by 2018 in medical marijuana sales alone. That's where legislators are trying to make a difference. An eager ICBC audience got to hear from powerful local activists and lawmakers, each having the same universal sentiment: adult-use, recreational cannabis can fundamentally change Hawaii.

"The Hawaii brand is as strong as any other in the world," declared Hawaii State Senator Will Espero (D), speaking to the ICBC audience. With nine million annual tourists, Espero envisioned how blissful "cannabis vacations" would naturally lend themselves to Hawaii's aloha reputation of warm and accommodating hospitality. Espero said he believes the current needs for state revenues outweigh the sources for it, and legal recreational cannabis can fill those needs.

"Marijuana will be legal for adult recreational use in Hawaii within the next three to five years," Espero predicted.

Related: How Will Businesses Handle Legalized Marijuana in the Workplace?

Introduced earlier this year, Hawaii's 2017 Senate Bill 548 would legalize the personal use, possession and sale of cannabis for adult use, and license and regulate retail marijuana establishments. The bill states its purpose is to:

  1. "Decriminalize and regulate small amounts of marijuana for personal use;
  2. "Establish a licensing scheme for the cultivation, sale and use of small amounts of marijuana for personal use;
  3. "Tax marijuana sales in the same manner as state excise taxes; and
  4. "Subject income derived from marijuana sales to state income taxes."

Industry experts at 420 Intel feel this bill has a better likelihood of passing than other state measures this year. Since Hawaii is still dealing with the medical dispensary licensing process and even product supply, they may want to wait until dispensaries are open and firmly established before moving on to legalization.

But, passing that bill won't solve the state's production problems.

How do you move state-legalized cannabis from one island to another when the ocean is a federal territory? Products need to be tested and testing facilities aren't located on each island. Technically, you can't.

Related: Some Universities Offer Classes On Marijuana. LSU Plans to Grow It.

It's like so many other scenarios made unclear by overlapping and undermining federal-to-state legislation. The federal government stands by its laws, and states stand by their right to have their own laws, but none of that resolves anything.

Speaking at ICBC, Hawaii Congresswoman Tulsi Gabbard (D) called current federal laws relating to marijuana, "archaic." "[They] are hurting people, tearing families apart, turning everyday Americans into criminals, and negatively impacting our economy, all at a tremendous cost to taxpayers as billions are spent on an overburdened and broken criminal justice system."

Rep. Gabbard, who some consider a future presidential candidate, is a sponsor of the Industrial Hemp Farming Act of 2017 that would remove industrial hemp from the federal classification of controlled substances. This would allow farming industrial hemp in Hawaii and nationwide without fear of violating federal law.

Hemp could provide a huge economic boost to a state consistently struggling to diversify its revenue streams. And Hawaii has several good legislators who understand the economic incentives behind this crop and feel legalizing its growth would be a notch not only for the state but, across the entire country.

Speaking at the conference, professional surfer, one-time Kauai mayoral candidate, and local cannabis activist Dustin Barca suggested that introducing a community co-op in Hawaii would create a community-based economic driver that replaces seed experimentation and development. Kauai has become a testing ground for genetically modified chemical experiments for years, land there has been leased to DuPont, Dow, Syngenta and Beck's -- all corporations that chose Kauai to experiment because its tropical climate enables them to work their fields year-round.

Related: What Is Schedule I and Why Is Marijuana on the List, Anyway?

Barca, like many of the state's cannabis activists, is pushing to place power in the hands of the community and way from out-of-state global corporations. Go away federal and big commercial, "aloha" state and community.

That allegiance to state rings loudly across Hawaii when it comes to hemp, and for sensible reasons. There are over 25,000 uses for industrial hemp (including BMW parts), and the more that can be produced locally, the less dependent the state is on the mainland. This holds particularly true for agriculture; textiles; furniture; food/nutrition/beverages; paper and construction materials; as well as personal care products, up to 85 percent of which are imported.

By rejecting any need for federal approval, Hawaii's decriminalization of hemp sets the stage to nullify the federal hemp ban in practice.

When you visit a destination, you learn more about it. Cannabis in Hawaii was no exception. Bringing local cannabis thought leaders, eager Hawaiian entrepreneurs and passionate activists together is precisely how to generate education around and visibility to the plant.