summer - representing hawaii's medical marijuana...

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Summer

Summer 2016 Industry Update

Update

successful conclusion of the 2016 legislative session, profile one of the Big Island dispen-saries, and learn about PTSD and medical marijuana. Patients and physicians who want to be involved in the industry will find step-by- step guides to certification. The dispen-saries will learn about successful community relations program at mainland dispensaries and about potential revenue projections for the industry. The final article surveys all fifty states to provide context for Hawai?i's future development.

As the islands await Hawai?i's first medical marijuana dispensaries this Fall, the Hawai?i Dispensary Alliance will be here to empower you to successfully engage with the industry.

A hui hou!

Christopher H . GarthExecutive Director

IN THIS ISSUE:

FROM THE EXECUTIVE DIRECTOR

Aloha Summer 2016!

The Hawai?i Dispensary Alliance is pleased to bring you this summer omnibus edition of the HDA Industry Update.

These pages contain something for everyone - dispensaries, patients, ancillary businesses, and physicians alike. In this issue we recap the

Note from the Executive Director............... 1

Sine Die: 2016 Legislative Update ............. 2

Dispensary Profile: Lau Ola ...................... 4

PTSD: Helping patients suffering from post- traumatic stress disorder.................... 6

Physician's Guide to M edical M arijuana Certifications .............................................. 8

How to Register as a Patient in Hawaii...... 11

Infographic: Qualifying Conditions Across the United States ......................................... 13

Industry Forecast: The Potential Futures of Hawai?i's M edical M arijuana M arket ........ 14

Case Studies in Compassion: Dispensaries and Community Relations........................... 22

The Legislation Game: A State- by- State Guide to M edical M arijuana Laws............. 27

Calendar of Events...................................... 44

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SINE DIE: 2016 LEGISLATIVE UPDATE

M ay 5th marked the adjournment of Hawai?i?s 2016 legislative session. Known as ?Sine Die? by capitol insiders, this day provides an op-portunity for short but earnest celebration for the efforts put forth by the Hawai?i Dispensary Alliance. Our experience at the legislature confirmed that a tactful approach to handling or advancing the success or defeat of legislative measures was appropriate. Through this lens the Alliance found success in passing its hall-mark bill for the industry, HB 2707, through both chambers, out of conference committee, and onto the Governor's desk.

Of course, the successful path of this bill was by no means delivered via a singular persuasive effort by Alliance staff. Our legislative cham-pions, Representatives Belatti, San Buenaven-tura, Creagan, Rhoads and Senators Baker, Espero, Dela Cruz, English, N ishihara, and Keith- Agaran, our policy partners (Drug Policy Forum Hawai?i, and M CCHI), and you, our esteemed membership, are the real heroes to whom the credit is due!

Looking back at the 2016 legislative session, Alliance members provided scores of testimony submissions and ideas for legislative priorities. Alliance representatives attended hearings,

hosted events, fostered conversations, and tracked legislation. Here are the numbers from the Alliance?s freshman legislative season:

- Hearings attended: 28- Testimony (spoken or written): 18- M easures Tracked: 42- Legislative Briefings: 1- Press Conferences: 1- Speaking engagements: 6

With the close of the legislative session, we begin the next chapter of our continued gov-ernment relations campaign. Throughout the legislative break, Alliance leadership will con-tinue to foster strategic relationships with state administrative agencies including but not lim-ited to the Department of Health, Department of Public Safety, DBEDT, Hawai?i Tourism Authority, Hawai?i Strategic Development Corporation, H igh Technology Development Corporation, City and County Councils, and local permitting and law enforcement depart-ments. We will also seek your input for the next wave of legislative priorities as we develop these relationships over the coming months.

Potential priorities for the next legislative ses-sion and our agency relationships include:

Industry Growth- Expansion of patient numbers by diver-

sifying qualifying conditions and certi-fying parties.

- Diversification of the available product

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lists for dispensaries.- Creation of direct subsidies for the dis-

pensaries and grow operations to build in particular areas to boost economic activity.

- Implementation of public education campaigns in schools and local commu-nities run through the Department of Health and the Department of Education regarding the benefits, cautions, and uses of medical marijuana.

- Solicitation of Department of Business,

Economic Development, and Tourism support through its Creative Industries Division for medicinal product and cannabis technology development.

- Classification of the medical marijuana industry by the Department of Business, Economic Development, and Tourism Strategic Industries Division as a strategic industry with the associated state sup-port for such industries.

- Attraction of venture capital investment for the industry and for the development of new, exportable technologies through the Hawai?i Strategic Development Corporation and H igh Technology De-velopment Corporation.

- Funding of Hawai?i Tourism Authority sponsored marketing campaigns and medical cannabis friendly tourism poli-cies once reciprocity with other states?

medical marijuana certifications kicks-off in 2018.

- Reduction of the dispensary advertising restrictions as contained in the Interim Rules from the Department of Health.

Tax Reform- Channeling funds resulting from any

future state taxes imposed on the indus-try to benefit appropriate state and local programs such as education and infra-structure maintenance.

- Requalifying the industry to participate in Enterprise Zone exemptions.

- Creation of tax credits to encourage the industry, much like renewable energy credits and technology investment credits facilitated those industries, yet with a more direct effect on corporate prof-itably, employee wages, and expansion.

- Development of state tax credits or subsidies meant to directly offset the high federal tax burden.

- Formulation of tax credits or other benefits rewarding the industry for em-ploying local talent and contracting with local businesses.

- Establishment of subsidies or tax credits for medical marijuana patients to in-crease the affordability of medical mari-juana in the absence of insurance coverage.

- Redirection of tax credits to related businesses for conducting business with medical marijuana dispensaries and grow operations.

Regulatory Reform- Funding for State Agencies to improve

industry oversight and agency responsiveness.

- Encouragement of further decriminal-ization efforts to reduce the risk for dis-

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pensary employees and patients.- Origination of a program to transition

Hawai?i?s fallow agricultural land and expertise to the outdoor, large- scale production of medicinal cannabis and hemp for medicinal production and export.

- Incorporation of state sponsored envoys and working groups investigating med-ical marijuana industry successes around the world.

ConclusionLet us know what you think of these priorities. The next few months will be spent adding to and refining this list as we create the research and public support necessary to foster legisla-tive success in the next session. But we need to hear from you ? the dispensaries, doctors, patients, and ancillary businesses - to know what the industry needs to grow into a true medical marijuana economy.

Dispensary Spotl ightLAU OLA, LLC

Retail LocationsHilo and Kona

Mission StatementTo provide safe, advanced, affordable, high-quality cannabis medicines that bring healing and comfort to patients and families in our Hawai?i Island community.

Call to ActionI was aware of Jari Sugano's challenges raising a child who had severe seizures and how med-ical marijuana helped her child like nothing else could. The more I looked into medical mari-juana, I saw the many different healing prop-erties that it possessed. I thought if it could help Jari, it could help countless others.

I wanted to participate in this industry for three reasons: We had decided earlier to shut down our farming operations and this was an op-

portunity to provide jobs to some of my workers; By setting up external cameras that observed traffic, we could help to make our neighbors more secure; Being offered the CEO position, it put me in a position to make deci-sions that aligned with my values. It's about all of us, not just a few of us. Sustainability means, socially, environmentally, and economically sustainable.

Richard Ha, CEO

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Target Patient DemographicWe are extremely honored to have received this license and will be targeting all patient demo-graphics of Hawai?i Island. We believe this medicine should be available to all that need it and we want to help as many patients in our community as possible.

PatientsLau Ola will be offering a diverse range of cannabis strains in the form of flowers and extracted oils. Lau Ola?s research and devel-opment team will be continually creating medicinal formulations that we will sell in the form of capsules, lozenges, tinctures, ointments, skin lotions, transdermal patches, and pre-filled orally ingested products. Every patient is different and therefor we must focus on all products so that we may help as many patients in the healing process as possible.

OperationsLau Ola is working with the best cultivators and healers in the world. We are taking every opportunity presented to us very seriously and strive to ensure we provide the best cannabis and cannabis- manufactured products to our patients. We are also aiming to work directly with Americans for Safe Access to obtain Pa-tient Focused Certification for all of our oper-ations. Safety is our number one priority.

Americans for Safe Access created Patient Fo-cused Certifications to address product and distribution safety in the medical cannabis in-dustry. The program provides components for operators, legislators and regulators to promote the adoption of safe and reasonable industry standards and regulations from seed to con-sumption. Patient Focused Certification is a third- party certification program for the med-ical cannabis industry based on the new quality standards for medical cannabis products and

businesses issued by the American Herbal Products Association (AHPA) and the Ameri-can Herbal Pharmacopeia (AHP) Cannabis monograph.

Future of the IndustryHawai?i has a unique opportunity in that we can truly be a world leader in this industry. Lau Ola is determined to make sure this happens.

Community RelationsWe have met with the community several times both in the pre- and post- application phases. We are here to listen and address any concerns people may have. Everyone has been extremely grateful that we have involved them in the process and we have received an incredible amount of support.

Industry LocationsLau Ola will look to other dispensary license holders as allies with the same common goals of providing safe, effective tested medicines to the patients that have waited too long.

ChallengesThe biggest challenge facing the medical cannabis community is the stigma that is asso-ciated with this medicine and our industry. As time moves on and more information and knowledge is saturated into the community, we feel that barriers and stigmas will be a thing of the past.

Final ThoughtsWe are extremely excited to have this oppor-tunity to service the island residents with safe, high- quality medical cannabis. This process has been an incredible learning experience for our whole team and we are going to do every-thing in our power to ensure that we meet the needs of the patients.

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Post-traumatic Stress Disorder(PTSD) is a condition that causes extreme anxiety, resulting from exposure to dangerous or life- threatening events like sexual assault, physical abuse, car accidents, exposure to vio-lence, robbery, natural disasters, and combat exposure. The sudden and severe emotions experienced at the time of the threat? fear, abandonment, impending doom? cause the body to release massive amounts of adrenaline and hyper- responsive stress hormones that may alter a victim?s brain chemistry with last-ing effects that can worsen over time. People diagnosed with PTSD are often prescribed pharmaceuticals and various talk therapies with mental health professionals, but many patients insist that cannabis offers exceptional symptom control over other treatment options.

Trauma victims with PTSD experience any number of debilitating effects? depression, isolation/ antisocial behavior, attention deficits, sleep disorders, and persistent negative thoughts. They may have sudden flashback episodes, where they are forced to relive the original trauma, or spontaneous fear or anxiety spurred by certain trigger stimuli. The effects are so intrusive that a staggering percentage of PTSD sufferers develop substance abuse prob-

lems or contemplate suicide, seeking any means of escape from the persistent stress.

M any physicians who are legally permitted to prescribe marijuana to PTSD patients report marked progress in minimizing patients? dis-tress, saying it strengthens their ability to cope with the trials of daily life. Those who use medical marijuana tend to experience a no-ticeable reduction in the three categories of PTSD manifestation? re- experiencing, avoid-ance, and hyper- arousal? without many of the risks or side effects of anti- depressants and anti- psychotics, like weight gain, sexual dys-function, lethargy and emotional numbness.

Currently, the federal government lists mari-juana as a Schedule 1 drug in the Controlled Substances Act with no medical benefits, but anecdotal evidence shows that the use of ther-apeutic cannabis offers multi- faceted treatment applications that translate to improved quality of life for PTSD patients. M arijuana has the potential for significant symptom relief because of its unique role in memory extinction. When cannabinoids, the active compounds in mari-juana, enter the brain and bind to the cannabinoid receptors in the amygdala, or fear center, they work to suppress the aversive memories of trauma. Supporters suggest that marijuana helps reduce the hallmarks of PTSD? impaired fear extinction, aversive memory consolidation and chronic anxiety. Recommended in conjunction with talk ther-apy, marijuana can help PTSD patients better manage stress.

In 2009, New M exico became the first state in the nation to add PTSD as a qualifying condi-tion for medical marijuana use, and today around 50 percent of its permit holders are

Medical Marijuana is Helping Patients Suffering from Post-traumatic Stress Disorder

By Lindsey Kesel

POST-TRAUMATIC STRESS DISORDER

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veterans with PTSD. Though many veterans have other conditions that qualify them for medical cannabis, PTSD sufferers without dual diagnoses are being largely ignored? only 16 states list PTSD as a qualifying condition today.

In Hawai?i, the barriers to getting marijuana treatment to those who could benefit from it, like PTSD sufferers, are slowly eroding. Thanks to recent approval by the Hawaii State De-partment of Health, PTSD is now a qualifying

condition for the recommen-dation of med-ical cannabis and the first condition to be added to the list since Hawai?i?s medical mari-juana program

began in 2000. Since the prevalence of PTSD in soldiers is off the charts? as many as one in five military personnel who were deployed to Iraq and Afghanistan and nearly one- third of Vietnam veterans? this greatly improves access to the natural treatment benefits of cannabis for Hawai?i?s military population. Considering the death rate from opioid use among VA pa-tients is nearly double the national average, and that there are no reported overdose deaths from cannabis, it may actually save lives in addition to enhancing them.

Nationally, the landscape is improving as well. On M ay 19, a measure that removes hurdles to medical marijuana for armed services members was accepted by the U.S. House of Represen-tatives and the Senate. The amendment pro-hibits the U.S. Department of Veterans Affairs from using the federal budget to stop physi-cians from recommending medical cannabis? translating to easier access to mari-juana as a treatment for ailments like PTSD. Once the chambers of Congress agree on the wording, the amendment is slated for inclusion

in the 2017 M ilitary Construction Appropria-tions Bill.

Since much of the failure to legitimize PTSD as a qualifying condition for medical marijuana is connected to lack of major research, random-ized and controlled trials are starting to gain momentum. Dr. Sue Sisley, M .D., a researcher for the nonprofit M ultidisciplinary Association for Psychedelic Studies (M APS), is currently serving as Site Principal Investigator in Scotts-dale, Arizona, for the only federally approved scientific study on marijuana as treatment for military veterans with PTSD. After M APS se-cured $2.1 million in funding, Dr. Sisley was eventually awarded a DEA Schedule I license in M ay to purchase, store, and distribute cannabis to study subjects. The research team expects to receive the cannabis from the National Institute on Drug Abuse this summer.

Proper research is necessary to pinpoint if cannabis is truly effective, and if so, what strains or varieties of cannabis will offer the greatest benefit for PTSD patients. ?In my full-time practice, I treat many PTSD patients who say they are getting better with help from cannabis, and I believe them, but I recognize these are only subjective reports,? says Dr. Sis-ley. ?Once we get going and begin to see real results from this study, marijuana may prove to be a legitimate treatment and lawmakers will have to make room for it.? The early hypothe-

Thanks to recent approval by the Hawaii State Department of Health, PTSD is now a qualifying condit ion for the recommendation of medical cannabis.

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For Hawai?i?s new patients to remain safe, for Hawai?i?s medical marijuana economy to grow and flourish, and for the state?s registry pro-gram to function properly, it is critical that Hawai?i- licensed physicians step up to the plate and operate within the Department of Health's M edical M arijuana Registry Program to certify patients. There are only a dozen physicians across the entire state who are

openly certifying patients, a paltry number considering the state?s population. In contrast, M aine, with a similar population to Hawai?i, contains over 300 medical providers actively certifying and monitoring patients. If physicians register with DOH to provide certifications, patients will have greater access to the medi-cines they need and physicians will gain access to effective new tools and treatments.


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sis of the M APS study is that strains rich in cannabidiol, a non- psychoactive key ingredient in cannabis, will be the most effective with the least side effects? but that remains to be con-firmed through the process of a controlled trial.

PTSD patients accessing cannabis on the black market cannot rely on obtaining a consistent product. Access to safe, lab- tested cannabis that is pure and traceable is key. Now that PTSD has joined the ranks of cancer, glau-coma, and severe pain on medical marijuana?s qualifying conditions list in Hawai?i, the eight dispensaries across the state can facilitate the delivery of cannabis to PTSD victims and start to log the effects. ?The legalization of cannabis

for PTSD will allow us to do rigorous obser-vational studies to evaluate which strains vet-erans prefer and query them about why,? says

Dr. Sisley. After the close of the M APS trial, Dr. Sisley plans to kickstart multi- site obser-vational studies in Hawai?i, both to tackle the public health crisis of opioid dependence by studying marijuana as a treatment alternative and to evaluate cannabis use for veterans with PTSD.

Though definitive research has a long way to go, many physicians who are legally allowed to recommend marijuana for PTSD relief say it works. Dr. Sisley feels the benefits are undeni-able and continues to track the positive progress in her patients. ?They are reporting improvement in multiple areas, including sleep and suppression of flashbacks,? she says. ?A peaceful night?s sleep with less nightmares has a beneficial ripple affect on other symptoms like depression, anxiety, and hypervigilance. They?re more functional and relaxed, and that improved quality of life is priceless.?

PHYSICIAN'S GUIDE TO MEDICAL MARIJUANA CERTIFICATION

"They?re more functional and relaxed, and that improved quality of life is priceless.?

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Click on a link to go directly to the source.

Is it Legal?Under Hawai?i law (Section 329- 126, HRS), certifying physicians are protected from arrest or prosecution, and from being denied any right or privilege, for providing a written cer-tification for the medical use of marijuana by a qualifying patient. Physicians do not prescribe medical marijuana, they certify that a patient is afflicted by one of the qualifying ailments. With the passage of HB2707, Advanced Practicing Registered Nurses will also be able to certify patients, this guide will be updated accordingly once DOH issues new regulations.

Licensing RequirementsTo certify a patient for the M edical M arijuana Program, the certifying physician must be a Hawai?i- licensed medical doctor or doctor of osteopathy, who holds a current and valid li-cense to prescribe drugs. The physician must also be registered with the Department of Public Safety to prescribe controlled substances. Participating physicians do not need to register independently with the Department of Health, but they will need to create an online account with DOH in order to fill- out their patient's paperwork.

Step 1: Electronic Signature AgreementThere are several steps certifying physicians must take before being able to submit elec-tronic patient applications and certify patients to legally use medical marijuana. First, physi-cians must complete an Electronic Signature Agreement. The form simply affirms that the physician?s electronic signature used to register

qualifying patients carries the full force and effect of the physician?s handwritten signature. It also allows DOH to accept the physician?s electronic signature. Physicians must download the form, complete, sign, and date the form, and return it to DOH via mail: 4348 Waialae Avenue, #648, Honolulu, Hawaii 96816. A short video by DOH gives an overview of the process, Physician: Create a M EDM J account.

Step 2: Logging in to DOHNext, physicians must link their M yPVL license before creating their first online application for a patient. Click the Physician M yPVL Instruc-tions (PDF) to read the instructions, and then go to M yPVL to link the account. Physicians must use their Hawaii M edical License Number without the M D or DOS and they must use their Hawaii Controlled Substance Registration Number. Next, physicians must go to the DOH M edical M arijuana Registry website and click ?Doctor?s First Time Log In? and enter all of their information. Only then can a physician submit a patient?s application for a 329 card.

Step 3: Reviewing Patient ApplicationsThe new electronic registration process for patient- initiated applications allows the physician to review the patients application and

A physician's step-by-step guide to certifying medical

marijuana patients in Hawai?i

Image courtesy of stockimages at FreeDigitalPhotos.net

http://www.capitol.hawaii.gov/hrscurrent/Vol06_Ch0321-0344/HRS0329/HRS_0329-0126.htmhttp://www.capitol.hawaii.gov/hrscurrent/Vol06_Ch0321-0344/HRS0329/HRS_0329-0126.htmhttp://www.capitol.hawaii.gov/hrscurrent/Vol06_Ch0321-0344/HRS0329/HRS_0329-0126.htmhttp://www.capitol.hawaii.gov/hrscurrent/Vol06_Ch0321-0344/HRS0329/HRS_0329-0126.htmhttp://www.capitol.hawaii.gov/hrscurrent/Vol06_Ch0321-0344/HRS0329/HRS_0329-0126.htmhttp://health.hawaii.gov/medicalmarijuanaregistry/wp-content/blogs.dir/97/files/2014/11/CBD-011-Electronic-Signature-Agreement-FINAL-9-30-15.pdfhttp://health.hawaii.gov/medicalmarijuanaregistry/wp-content/blogs.dir/97/files/2014/11/CBD-011-Electronic-Signature-Agreement-FINAL-9-30-15.pdfhttp://health.hawaii.gov/medicalmarijuanaregistry/wp-content/blogs.dir/97/files/2014/11/CBD-011-Electronic-Signature-Agreement-FINAL-9-30-15.pdfhttp://health.hawaii.gov/medicalmarijuanaregistry/wp-content/blogs.dir/97/files/2014/11/CBD-011-Electronic-Signature-Agreement-FINAL-9-30-15.pdfhttp://health.hawaii.gov/medicalmarijuanaregistry/wp-content/blogs.dir/97/files/2014/11/CBD-011-Electronic-Signature-Agreement-FINAL-9-30-15.pdfhttp://health.hawaii.gov/medicalmarijuanaregistry/wp-content/blogs.dir/97/files/2014/11/CBD-011-Electronic-Signature-Agreement-FINAL-9-30-15.pdfhttp://health.hawaii.gov/medicalmarijuanaregistry/wp-content/blogs.dir/97/files/2014/11/CBD-011-Electronic-Signature-Agreement-FINAL-9-30-15.pdfhttps://www.youtube.com/watch?v=b6tfjltZE-0&feature=youtu.behttps://www.youtube.com/watch?v=b6tfjltZE-0&feature=youtu.behttps://www.youtube.com/watch?v=b6tfjltZE-0&feature=youtu.behttps://www.youtube.com/watch?v=b6tfjltZE-0&feature=youtu.behttps://www.youtube.com/watch?v=b6tfjltZE-0&feature=youtu.behttps://www.youtube.com/watch?v=b6tfjltZE-0&feature=youtu.behttps://www.youtube.com/watch?v=b6tfjltZE-0&feature=youtu.behttps://www.youtube.com/watch?v=b6tfjltZE-0&feature=youtu.behttp://health.hawaii.gov/medicalmarijuanaregistry/files/2014/11/Creating-a-MyPVL-Account-12-30-14-Revised-FINAL.pdfhttp://health.hawaii.gov/medicalmarijuanaregistry/files/2014/11/Creating-a-MyPVL-Account-12-30-14-Revised-FINAL.pdfhttp://health.hawaii.gov/medicalmarijuanaregistry/files/2014/11/Creating-a-MyPVL-Account-12-30-14-Revised-FINAL.pdfhttp://health.hawaii.gov/medicalmarijuanaregistry/files/2014/11/Creating-a-MyPVL-Account-12-30-14-Revised-FINAL.pdfhttp://health.hawaii.gov/medicalmarijuanaregistry/files/2014/11/Creating-a-MyPVL-Account-12-30-14-Revised-FINAL.pdfhttp://health.hawaii.gov/medicalmarijuanaregistry/files/2014/11/Creating-a-MyPVL-Account-12-30-14-Revised-FINAL.pdfhttp://health.hawaii.gov/medicalmarijuanaregistry/files/2014/11/Creating-a-MyPVL-Account-12-30-14-Revised-FINAL.pdfhttps://medmj.ehawaii.gov/medmj/welcomehttps://medmj.ehawaii.gov/medmj/welcomehttps://medmj.ehawaii.gov/medmj/welcomehttps://medmj.ehawaii.gov/medmj/welcomehttps://medmj.ehawaii.gov/medmj/welcomehttps://medmj.ehawaii.gov/medmj/welcomehttps://medmj.ehawaii.gov/medmj/welcomehttps://medmj.ehawaii.gov/medmj/welcome

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return it to the patient if there is a need for corrections; to certify their patient?s condition, to upload documents on behalf of the patient; , to create a patient record for patients unable to enter their own data; and to submit the elec-tronic application to DOH. DOH offers Patient Initiated Application instructions online and a brief video overview of the process.

Step 4: Assessing the PatientBefore a physician can certify a patient to use medical marijuana, the physician is required by Hawai?i law to maintain a bona fide physician- patient relationship with the quali-fying patient? an ongoing responsibility for the assessment, care, and treatment of a qualifying patient?s debilitating medical condition with respect to medical marijuana. The physician must complete a full assessment of the patient?s medical history and current medical condition,

including an in- person physical exam. The physician must also provide follow- up care and maintain records of the qualifying patient?s treatment and condition.

A list of eligible debilitating medical conditions is posted on the state?s medical marijuana program website. A certifying physician must certify that in their professional opinion, the qualifying patient has a debilitating medical condition and that the potential benefits of the medical use of marijuana would likely out-

weigh the health risks for the patient. Physi-cians do not prescribe or control dosing of medical marijuana under the state?s medical marijuana laws. Once a physician has met all the necessary administrative and physician-patient requirements, they can submit the 329 application on behalf of the patient to obtain the patient?s 329 registration card for the legal use of medical cannabis.

Step 5: In Case of TroubleIf a physician meets the licensing requirements to certify patients to use medical marijuana, but is having trouble linking their medical license to their M yPVL account or logging in to the medical marijuana registry website, customer support is available at (808) 695- 4620 from O?ahu and (866) 448- 0725 from neighbor is-lands.

For More InformationIn order to squash stigmas, create a positive perception of medical marijuana in the com-munity and develop a legitimate medical mari-juana industry, it is imperative for certifying physicians to act consistently within accepted professional and ethical practices. The Federa-tion of State M edical Boards recognizes the more tolerant attitudes towards medical mari-juana and has developed model guidelines for the recommendation of marijuana. The guide-lines recommend a collaborative physician-patient relationship, a documented, in- person medical evaluation and collection of relevant clinical patient history, informed and shared decision making, a written plan or treatment agreement, and ongoing monitoring and adoption of the treatment plan.

Additional Information and Support:

Hawai?i Dispensary Alliance

M edical Cannabis Coalition of Hawai?i

Hawai?i M edical Association

http://health.hawaii.gov/medicalmarijuanaregistry/wp-content/blogs.dir/97/files/2014/11/Physician-Instructions-Patient-Initiated-11-12-15.pdfhttp://health.hawaii.gov/medicalmarijuanaregistry/wp-content/blogs.dir/97/files/2014/11/Physician-Instructions-Patient-Initiated-11-12-15.pdfhttp://health.hawaii.gov/medicalmarijuanaregistry/wp-content/blogs.dir/97/files/2014/11/Physician-Instructions-Patient-Initiated-11-12-15.pdfhttp://health.hawaii.gov/medicalmarijuanaregistry/wp-content/blogs.dir/97/files/2014/11/Physician-Instructions-Patient-Initiated-11-12-15.pdfhttp://health.hawaii.gov/medicalmarijuanaregistry/wp-content/blogs.dir/97/files/2014/11/Physician-Instructions-Patient-Initiated-11-12-15.pdfhttp://health.hawaii.gov/medicalmarijuanaregistry/wp-content/blogs.dir/97/files/2014/11/Physician-Instructions-Patient-Initiated-11-12-15.pdfhttp://health.hawaii.gov/medicalmarijuanaregistry/wp-content/blogs.dir/97/files/2014/11/Physician-Instructions-Patient-Initiated-11-12-15.pdfhttp://health.hawaii.gov/medicalmarijuanaregistry/wp-content/blogs.dir/97/files/2014/11/Physician-Instructions-Patient-Initiated-11-12-15.pdfhttp://health.hawaii.gov/medicalmarijuanaregistry/wp-content/blogs.dir/97/files/2014/11/Physician-Instructions-Patient-Initiated-11-12-15.pdfhttps://www.youtube.com/watch?v=Bjls5Ezwqvs&feature=youtu.behttps://www.youtube.com/watch?v=Bjls5Ezwqvs&feature=youtu.behttp://health.hawaii.gov/medicalmarijuanaregistry/providers/debilitating-medical-conditions/http://health.hawaii.gov/medicalmarijuanaregistry/providers/debilitating-medical-conditions/http://health.hawaii.gov/medicalmarijuanaregistry/providers/debilitating-medical-conditions/http://health.hawaii.gov/medicalmarijuanaregistry/providers/debilitating-medical-conditions/http://health.hawaii.gov/medicalmarijuanaregistry/providers/debilitating-medical-conditions/http://health.hawaii.gov/medicalmarijuanaregistry/providers/debilitating-medical-conditions/http://health.hawaii.gov/medicalmarijuanaregistry/providers/debilitating-medical-conditions/http://health.hawaii.gov/medicalmarijuanaregistry/providers/debilitating-medical-conditions/http://health.hawaii.gov/medicalmarijuanaregistry/providers/debilitating-medical-conditions/http://health.hawaii.gov/medicalmarijuanaregistry/providers/debilitating-medical-conditions/http://health.hawaii.gov/medicalmarijuanaregistry/providers/debilitating-medical-conditions/http://health.hawaii.gov/medicalmarijuanaregistry/providers/debilitating-medical-conditions/http://health.hawaii.gov/medicalmarijuanaregistry/providers/debilitating-medical-conditions/http://health.hawaii.gov/medicalmarijuanaregistry/providers/debilitating-medical-conditions/https://www.fsmb.org/Media/Default/PDF/BRD_RPT_16-2_Marijuana_Model_Guidelines.pdfhttps://www.fsmb.org/Media/Default/PDF/BRD_RPT_16-2_Marijuana_Model_Guidelines.pdfhttps://www.fsmb.org/Media/Default/PDF/BRD_RPT_16-2_Marijuana_Model_Guidelines.pdfhttps://www.fsmb.org/Media/Default/PDF/BRD_RPT_16-2_Marijuana_Model_Guidelines.pdfhttps://www.fsmb.org/Media/Default/PDF/BRD_RPT_16-2_Marijuana_Model_Guidelines.pdfhttps://www.fsmb.org/Media/Default/PDF/BRD_RPT_16-2_Marijuana_Model_Guidelines.pdfhttps://www.fsmb.org/Media/Default/PDF/BRD_RPT_16-2_Marijuana_Model_Guidelines.pdfhttps://www.fsmb.org/Media/Default/PDF/BRD_RPT_16-2_Marijuana_Model_Guidelines.pdfhttps://www.fsmb.org/Media/Default/PDF/BRD_RPT_16-2_Marijuana_Model_Guidelines.pdfhttps://www.fsmb.org/Media/Default/PDF/BRD_RPT_16-2_Marijuana_Model_Guidelines.pdfhttps://www.fsmb.org/Media/Default/PDF/BRD_RPT_16-2_Marijuana_Model_Guidelines.pdfhttps://www.fsmb.org/Media/Default/PDF/BRD_RPT_16-2_Marijuana_Model_Guidelines.pdfhttps://www.fsmb.org/Media/Default/PDF/BRD_RPT_16-2_Marijuana_Model_Guidelines.pdfhttps://www.fsmb.org/Media/Default/PDF/BRD_RPT_16-2_Marijuana_Model_Guidelines.pdfhttps://www.fsmb.org/Media/Default/PDF/BRD_RPT_16-2_Marijuana_Model_Guidelines.pdfhttps://www.fsmb.org/Media/Default/PDF/BRD_RPT_16-2_Marijuana_Model_Guidelines.pdfhttps://www.fsmb.org/Media/Default/PDF/BRD_RPT_16-2_Marijuana_Model_Guidelines.pdfhttps://www.fsmb.org/Media/Default/PDF/BRD_RPT_16-2_Marijuana_Model_Guidelines.pdfhttps://www.fsmb.org/Media/Default/PDF/BRD_RPT_16-2_Marijuana_Model_Guidelines.pdfhttps://www.fsmb.org/Media/Default/PDF/BRD_RPT_16-2_Marijuana_Model_Guidelines.pdfhttps://www.fsmb.org/Media/Default/PDF/BRD_RPT_16-2_Marijuana_Model_Guidelines.pdfhttps://www.fsmb.org/Media/Default/PDF/BRD_RPT_16-2_Marijuana_Model_Guidelines.pdfhttps://www.fsmb.org/Media/Default/PDF/BRD_RPT_16-2_Marijuana_Model_Guidelines.pdfhttps://www.fsmb.org/Media/Default/PDF/BRD_RPT_16-2_Marijuana_Model_Guidelines.pdfhttps://www.fsmb.org/Media/Default/PDF/BRD_RPT_16-2_Marijuana_Model_Guidelines.pdfhttps://www.fsmb.org/Media/Default/PDF/BRD_RPT_16-2_Marijuana_Model_Guidelines.pdfhttps://www.fsmb.org/Media/Default/PDF/BRD_RPT_16-2_Marijuana_Model_Guidelines.pdfhttps://www.fsmb.org/Media/Default/PDF/BRD_RPT_16-2_Marijuana_Model_Guidelines.pdfhttps://www.fsmb.org/Media/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Click on a link to go directly to the source.

Certification RequirementsFor patients seeking to obtain medical cannabis to treat their debilitating health conditions with full legal protection from arrest and prosecu-tion, individuals must qualify and register with the Hawaii State Department of Health's M edical M arijuana Registry Program before using marijuana for medical purposes. Once a qualified patient has established a bona- fide physician- patient relationship with a certifying physician and the physician certifies that the patient has a medical condition that can benefit from medical marijuana, the physician can submit the patient?s registration forms to DOH. Once the patient receives their 329 Registration Card from DOH, they can safely use medical marijuana.

329 Card FactsThe 329 Registration Card allows the qualify-ing patient to maintain one grow site with no more than seven marijuana plants. It also al-lows the patient to possess no more than four ounces of useable marijuana. The patient must be in possession of the 329 card when in pos-

session of usable marijuana or marijuana plants. The card is valid for one year. If the information provided to DOH and listed on the 329 card changes, the registered patient must report the change to DOH within ten working days of the change.

Step 1: Establish a Patient-Physician RelationshipThe first step for a patient seeking to obtain a 329 Registration Card is for the patient to es-tablish a patient- physician relationship with a certifying physician. The certifying physician will determine if the patient is eligible to use medical marijuana to treat their debilitating medical condition. The list of debilitating medical conditions is located on the M edical

M arijuana Registry Program website. Once a patient- physician relationship has been estab-lished and the certifying physician recommends that the patient can benefit from medical cannabis, then the actual registration process can begin.

A Step-by-Step Guide

HOW TO REGISTER AS A PATIENT IN HAWAI?I

http://health.hawaii.gov/medicalmarijuanaregistry/providers/debilitating-medical-conditions/http://health.hawaii.gov/medicalmarijuanaregistry/providers/debilitating-medical-conditions/http://health.hawaii.gov/medicalmarijuanaregistry/providers/debilitating-medical-conditions/http://health.hawaii.gov/medicalmarijuanaregistry/providers/debilitating-medical-conditions/http://health.hawaii.gov/medicalmarijuanaregistry/providers/debilitating-medical-conditions/http://health.hawaii.gov/medicalmarijuanaregistry/providers/debilitating-medical-conditions/http://health.hawaii.gov/medicalmarijuanaregistry/providers/debilitating-medical-conditions/

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Step 2: Fill-out an ApplicationThe applying patient must have a valid ID (driver?s license, state ID, or passport). First, the patient must go to DOH's website and create a free, secure online account. Next, the patient must visit the patient registration wel-come page, log in with their new information, and then fill out the online application and upload any required documents. The patient must pay the $38.50 application fee online via credit card, debit card, or direct withdrawal from a savings or checking account. Applica-tions completed with a credit card or debit card payment will have a shorter turnaround time.

Step 3: DOH VerificationFollowing the submittal of the initial applica-tion, the certifying physician must review the application, certify the patient?s condition, and re- submit the application to DOH. Once DOH has verified the application, a 329 Registration Card is mailed directly to the patient. The program?s website lists the current turnaround time at 10 business days.

For More InformationThe M edical M arijuana Registry Program website has several online tools to assist pa-tients with the application and registration process. There is an instructional video, a PDF guide with detailed instructions, and a webpage with other helpful tips.

The M edical M arijuana Registry Program in-formation hotline is (808) 733- 2177 and gives general information about the program.

For outer- island specific assistance, call:

Big Island, (808) 974- 4000, ext. 32177.

M aui, (808) 984- 2400 ext. 32177.

Kaua?i, (808) 274- 3141 ext. 32177.

To contact DOH via email, use [email protected], but expect a delayed response. If you must speak to DOH staff, you can call (808) 733- 2164 between 1pm and 4pm on Tuesdays and Thursdays.

Additional Information and Support:

Hawai?i Dispensary Alliance

M edical Cannabis Coalition of Hawai?i

Hawai?i Veterans Cannabis Alliance

https://login.ehawaii.gov/lala/https://login.ehawaii.gov/lala/https://login.ehawaii.gov/lala/https://medmj.ehawaii.gov/medmj/https://medmj.ehawaii.gov/medmj/https://medmj.ehawaii.gov/medmj/https://medmj.ehawaii.gov/medmj/https://medmj.ehawaii.gov/medmj/https://medmj.ehawaii.gov/medmj/https://medmj.ehawaii.gov/medmj/https://medmj.ehawaii.gov/medmj/https://medmj.ehawaii.gov/medmj/http://health.hawaii.gov/medicalmarijuanaregistry/application-information/http://health.hawaii.gov/medicalmarijuanaregistry/application-information/http://health.hawaii.gov/medicalmarijuanaregistry/application-information/http://health.hawaii.gov/medicalmarijuanaregistry/application-information/http://health.hawaii.gov/medicalmarijuanaregistry/application-information/http://health.hawaii.gov/medicalmarijuanaregistry/application-information/http://health.hawaii.gov/medicalmarijuanaregistry/application-information/http://health.hawaii.gov/medicalmarijuanaregistry/application-information/http://health.hawaii.gov/medicalmarijuanaregistry/application-information/http://health.hawaii.gov/medicalmarijuanaregistry/application-information/http://health.hawaii.gov/medicalmarijuanaregistry/application-information/https://www.youtube.com/watch?v=BM7LLz0gjRE&feature=youtu.behttps://www.youtube.com/watch?v=BM7LLz0gjRE&feature=youtu.behttps://www.youtube.com/watch?v=BM7LLz0gjRE&feature=youtu.behttps://www.youtube.com/watch?v=BM7LLz0gjRE&feature=youtu.behttp://health.hawaii.gov/medicalmarijuanaregistry/wp-content/blogs.dir/97/files/2014/11/Patient-Instructios-How-to-Complete-an-Application-11-12-15.pdfhttp://health.hawaii.gov/medicalmarijuanaregistry/wp-content/blogs.dir/97/files/2014/11/Patient-Instructios-How-to-Complete-an-Application-11-12-15.pdfhttp://health.hawaii.gov/medicalmarijuanaregistry/wp-content/blogs.dir/97/files/2014/11/Patient-Instructios-How-to-Complete-an-Application-11-12-15.pdfhttp://health.hawaii.gov/medicalmarijuanaregistry/wp-content/blogs.dir/97/files/2014/11/Patient-Instructios-How-to-Complete-an-Application-11-12-15.pdfhttp://health.hawaii.gov/medicalmarijuanaregistry/wp-content/blogs.dir/97/files/2014/11/Patient-Instructios-How-to-Complete-an-Application-11-12-15.pdfhttp://health.hawaii.gov/medicalmarijuanaregistry/wp-content/blogs.dir/97/files/2014/11/Patient-Instructios-How-to-Complete-an-Application-11-12-15.pdfhttp://health.hawaii.gov/medicalmarijuanaregistry/wp-content/blogs.dir/97/files/2014/11/Patient-Instructios-How-to-Complete-an-Application-11-12-15.pdfhttp://health.hawaii.gov/medicalmarijuanaregistry/wp-content/blogs.dir/97/files/2014/11/Patient-Instructios-How-to-Complete-an-Application-11-12-15.pdfhttp://health.hawaii.gov/medicalmarijuanaregistry/patients/registration-process-application-form-tips/http://health.hawaii.gov/medicalmarijuanaregistry/patients/registration-process-application-form-tips/http://health.hawaii.gov/medicalmarijuanaregistry/patients/registration-process-application-form-tips/http://health.hawaii.gov/medicalmarijuanaregistry/patients/registration-process-application-form-tips/http://health.hawaii.gov/medicalmarijuanaregistry/patients/registration-process-application-form-tips/http://health.hawaii.gov/medicalmarijuanaregistry/patients/registration-process-application-form-tips/http://health.hawaii.gov/medicalmarijuanaregistry/patients/registration-process-application-form-tips/mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]://www.hawaiidispensaryalliance.org/http://www.hawaiidispensaryalliance.org/http://www.hawaiidispensaryalliance.org/http://www.hawaiidispensaryalliance.org/http://www.hawaiidispensaryalliance.org/http://mcchi.org/http://mcchi.org/http://mcchi.org/http://mcchi.org/http://mcchi.org/http://mcchi.org/http://mcchi.org/http://mcchi.org/https://www.facebook.com/hvcaoahu/https://www.facebook.com/hvcaoahu/https://www.facebook.com/hvcaoahu/https://www.facebook.com/hvcaoahu/https://www.facebook.com/hvcaoahu/https://www.facebook.com/hvcaoahu/

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IndustryTHE POTENTIAL

FUTURES OF HAWAI?I?S MEDICAL

MARIJUANA MARKETBY: GARRETT I. HALYDIER


Forecast

Now that the dispensary licensees have been announced, it is time to begin thinking about the future fiscal landscape of the medical mar-ijuana industry in Hawai?i. Specifically, what patient numbers should the industry expect, how large could the industry become, and what do these numbers mean for dispensaries and patients alike. While this task is obviously complicated by the incredible youth of the medical marijuana industry across the United States, there is enough data to begin to make broad estimates relevant to Hawai?i?s potential.

As discussed in the Hawai?i Dispensary Al-liance?s recent White Paper, Hawai?i?s Medical Marij uana Economy: A Roadmap for the Fu-ture, Hawai?i has a brief window of opportu-nity to emerge onto the world stage as a provider of quality medical marijuana products and as a center for medical research and tech-nology development. This article will provide a little more detail about the economic potential of these futures for Hawai?i?s medical mari-juana economy.

LAYING A FOUNDATION

The first order of business is to identify solid statistics on which to base projections for Hawai?i?s medical marijuana market. Chiefly this means creating accurate projections for both the number of registered patients and the amount each patient is likely to spend at a dispensary every year in Hawai?i. The num-bers in this article were developed indepen-dently by the Hawai?i Dispensary Alliance based on raw statistics from the Hawai?i State Department of Health; the Hawai?i State De-partment of Business, Economic Development, and Tourism; the Hawai?i Tourism Authority, and state agencies administering medical marijuana programs across the country (as detailed in an upcoming article in the Hawai?i

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Dispensary Alliance's monthly HDA Industry Update, The Legislation Game: A State- by-State Guide to the Medical Marij uana I n-dustry). Nationwide pricing statistics were sourced from The M arijuana Business Fact-book 2016; and the Alliance's independent twelve month projections align with those in the Factbook.

In addition to simply identifying numbers on which to base projections for Hawai?i?s market, it is important to understand the various fac-tors that affect these numbers in order to ap-propriately adjust the results for Hawai?i. These factors include everything from the length of time a state?s medical marijuana program has been established and the unique demographics of that state to the particular set of laws gov-erning a medical marijuana regime and any controversy surrounding its establishment. Right now, only nineteen states both host open medical marijuana dispensaries and collect data on them; only three of those programs have existed for more than five years; and the oldest dispensaries in twelve of those states are less than two years old. This does not mean that the numbers from these states cannot be trusted, but it does mean they must be treated as a baseline from which to extrapolate as op-posed to a set metric for Hawai?i?s medical marijuana economy to follow as it develops.

Calculating Registered Patient Numbers

The first element in calculating po-tential revenue figures is the number of registered patients in the state. Today, the number of registered medical marijuana patients in each state varies widely across America - from under five hundred patients in New Hampshire to almost one mil-lion in California (Table 1).

Those numbers are growing across the board, though not uniformly. In the last year alone, both new and established programs have seen in-credible growth. In fact, the oldest

dispensary program on the list, New M exico, almost doubled its patient count in the last year after almost ten years of slow growth.

The other important number that the industry considers is the percentage of population in each state who will not only qualify, but who is likely to register to receive a medical marijuana certification. This percentage is notoriously hard to pin down because of the youth of the industry across the country. For instance, based on 2014- 2015 growth in medical marijuana markets, the number was pegged by leading industry organizations at around 1.25% of a state?s total population. Now, based on patient growth through the middle of 2016, the con-ventional wisdom is that approximately 2% of a state?s population will eventually obtain their registration. Yet, looking at all of the numbers together over time tells a third story: a story of continuing growth with no identifiable upper- bound.

Every state?s registered medical marijuana population is continuing to grow at rates most economies and markets would be envious of. In fact, only five states currently see less than double- digit annual growth; and with good reason: Colorado, Oregon, and Washington are the only states on the list with legal recreational marijuana dispensaries; California?s system does not require registration with the state; and

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2016 Industry Forecast

M ichigan shut down its medical marijuana dispensary system in 2016. These five states maintain the highest medical marijuana patient percentages to date at 2.01%, 1.96%, 1.85%, 2.26%, and 1.84% respectively and are the source of the idea for a 2% ceiling. Yet, despite the addition of a recreational market providing easy access to products without the need for registration, medical marijuana registrations continue to grow between three and nine per-cent a year ? fast enough to soon exceed the 2% ceiling by a considerable margin.

One issue then with treating any of the current patient numbers as the ceiling for patient growth is assuming that the current numbers reflect mature medical marijuana markets. In-stead the majority of medical marijuana mar-kets are nascent at best, with the vast majority less than three years old (Table 2). Unfortu-

nately, the young age of the markets and the large differences between state regulations make it quite difficult to extrapolate potential patient numbers based on other factors as well. For instance, there is not yet an identifiable correlation between either elderly populations, veteran populations, or qualifying conditions and medical marijuana patient numbers.

So the idea of a 2% ceiling is predicated on the experience of three markets whose growth was

forestalled by the introduction of a recreational market; one state with no registration require-ments; and one state which no longer main-tains a dispensary system. Of greater relevance then to our purpose in projecting Hawai?i?s market are those markets like New M exico, Arizona, and M aine which have had their medical marijuana programs for a number of years (like Hawai?i), but which have seen greatly increased growth rates after the intro-duction of dispensaries or in concert with re-laxed restrictions and greater public awareness. Arizona?s market is doubling in size every two years, New M exico every year, and M aine is doubling every six months. M aine's growth is blowing past the 2% ceiling with almost 3.5% of its population registered as patients. New M exico, with a dispensary program started in 2007, has seen a tremendous uptick in growth in the last year which the dispensaries attribute to greater public awareness of the industry, generally decreasing social stigma, and dispen-sary advertising. Based on these examples, Hawai?i will see an increase in its patient numbers simply from the establishment of the dispensaries and institutionalization of the in-dustry. Further efforts by the industry to reduce public stigma and encourage physician and patient registration will likely increase regis-tration numbers further, even in counties that are already over the 2% number.

Calculating Patient Spending Numbers

The second element in calculating potential revenue figures is the amount that each patient is likely to spend at a dispensary in a year. While it is difficult to determine a ceiling on patient numbers, it is possible to be consider-ably more certain about the amount of money that medical marijuana patients are likely to spend at dispensaries.

The average transaction amount at medical marijuana dispensaries across the country is

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$72 - as low as $50 on the West Coast and as high as $100 on the East Coast. The average wholesale price per gram for indoor grow medical marijuana across the country is $5.20 - as low as $4 on the West Coast and as high as $7 on the East Coast. Wholesale prices per pound range from $1,500 to $3,200 across the United States. The average markup per gram over wholesale price for medical marijuana dispensaries across the country is $7.13.

These numbers are the averages reported by M arijuana Business Daily across states that vary widely in both the number of dispensaries competing, the severity of the regulations lim-iting the amount of product sold to each pa-tient, taxes the customers bear, and whether or not the dispensaries are required to operate as non- profits. Hawai?i performs on the high- end of each of these metrics with a few dispensaries competing in each county, a maximum pur-chase amount of one- half pound per customer, no additional taxes, and a for- profit regulatory scheme. Additionally, indoor grow marijuana, like that in Hawai?i, commands a premium across the country, often 30% higher than outdoor grow prices.

The money that medical mari-juana patients in Hawai?i could spend each month will depend on prices and the severity of a patient?s ailments. This will re-sult in a range of potential in-dustry revenue numbers for Hawai?i, but this is a reflection of current national trends, for instance: the least expensive wholesale product in Connecti-cut is $600 more expensive per pound than the most expensive product in M aine and $800 more expensive per pound than the most expensive product in Washington. In Nevada,

wholesale product will sell for between $2,100 and $3,300 per pound; and in California, wholesale product will only sell for between $1,650 and $2,100 per pound. Add to these wholesale costs the average markup of $7.13 a gram at medical marijuana retailers and the range grows even larger.

Based on these national benchmark prices, in Hawai?i each patient could spend as little as $50 per month to well over $2,000 per month (if a patient actually buys the monthly limit of one- half pound, which is unlikely). Assuming conservatively then a range on the lower end, each patient in Hawai?i will likely spend be-tween $100 and $300 per month, or between $1,200 and $3,600 a year, at the dispensaries.

Now, this range may be narrowed to an extent. Rather than working from current medical marijuana prices in dispensaries, it is possible to work backwards from patient numbers and statewide industry revenue. Table 5 shows both a high and low annual spend per patient based on state population projections for 2016.

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These numbers range from $764 per patient in Washington, which has a vibrant recreational industry and the lowest electricity costs in the nation, to $3,200 in New York?s very tightly regulated market. On average then, patients in medical marijuana states spend between $1,300 and $2,000 per year, with full patient partici-pation. Given the high electricity costs in Hawai?i, indoor grow requirements, lack of a recreational market, and fairly strict product and testing standards, Hawai?i?s average patient spend will likely be towards the higher end of approximately $2,000 per patient, per year.

Armed with both of these metrics for annual patient spending as well as the population projections for Hawai?i, it is possible to envi-sion Hawai?i?s current medical marijuana dis-pensary market at both the county and state level.

ANALYZING THE PRESENT

Now equipped with information about current population statistics and average annual patient spend, it is a fairly straight forward calculation to determine potential industry revenue at current population levels. There are 14,074 registered medical marijuana patients in Hawai?i as reported by the Hawai?i State De-partment of Health in M ay 2016. Based on those patient numbers, the $1,200- $3,600 annual patient spend, and a 75% participation rate due to the continuing service of caregivers, gives a rough range for statewide dispensary revenue at current patient numbers between: $12,666,000 - $37,999,800. Or at the $2,000 per patient average: $21,111,000.

The same calculations for potential countywide revenue:

Kauai: For 1,689 patients, countywide rev-enue could vary from $1,159,992 - $4,559,976.

M aui: For 3,237 patients, countywide rev-

enue could vary from $2,913,318 - $8,739,954.

Honolulu: For 3,378 patients, countywide revenue could vary from $3,039,984 - $9,119,952.

Hawai?i: For 5,770 patients, countywide revenue could vary from $5,193,306 - $15,579,918.

On a per dispensary basis, simply divide the county revenue by the number of dispensaries in the county ? one on Kauai, two on M aui, three in Honolulu, and two on Hawai?i. So based on current patient numbers and generic patient spending habits, each dispensary can expect revenue somewhere in the appropriate ranges below, in the first 12 months of opera-tion, all else being equal:

Kauai: $1,519,992 - $4,559,976.

M aui: $1,456,659 - $4,369,977.

Honolulu: $1,013,328 - $3,039,984.

Hawai?i: $2,596,653 - $7,789,959.

If patient numbers remain at 14,074, these projections match those of the M arijuana Business Factbook 2016 at between $15,000,000 and $20,000,000 for the first twelve months of total industry revenue.

PROJECTING HAWAI?I?S FUTURE

In an effort to demonstrate the potential of the medical marijuana industry as a whole for the state of Hawai?i, it is now necessary to look beyond the current revenue projections and peer into the future to determine what the in-dustry has the potential to develop into over the next few years. This number will chiefly vary based on the growth of the patient popu-lation across the state. This section will rely on population statistics and projections from the Hawai?i State Department of Business, Eco-nomic Development, and Tourism and the Hawai?i Tourism Authority for 2018.

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Baseline Projections

The first order of business is to establish a rough calculation of future revenue projections. Recall the current revenue projections for the first twelve months of operation: $12,666,000 - $37,999,800 for 14,074 patients. Building on these numbers, the most basic projections for the potential size of Hawai?i?s medical mari-juana industry require a general move towards patient numbers across the state totaling 2% of the population. State population projections for 2018 place the total population at 1,450,000 people, and 2% of that is 29,000 potential pa-tients. Based on those patient numbers, the $1,200- $3,600 annual patient spend gives a rough range for potential statewide industry revenue of: $34,800,000 - $104,400,800. At the alternative annual, per- patient revenue number of $2,000, the medical marijuana in-dustry in Hawai?i will likely bring in $50,000,000 annually in 2018.

Specif ic Projections

It is possible to further refine these initial esti-mates at the county- level. The difficulty with the rough, baseline projection comes from us-ing a statewide 2% patient population that does not accurately reflect county- specific popula-tion considerations. Consider again the current county- specific patient totals, this time with added information concerning the patient count as a percentage of population.

Patients % of Pop.

Kauai: 1,689 2.52%

M aui: 3,237 2.24%

Honolulu: 3,378 0.35%

Hawai?i: 5,770 3.12%

Patients in Hawai?i currently total only 1.01% of the population. To reach the generic 2% population target while remaining true to that same generic 2% rule would require Kauai,

M aui, and Hawai?i to lose between 25% and 65% of their currently registered patients.

A more likely scenario, based on the discussion above about the origin of the generic 2% number, is that patient numbers in all of the counties will grow in response to the new le-gality and ease of access to medical marijuana at rates similar to those in other states. Those counties with a current patient population percentage over 2% will grow at monthly rates similar to Oregon or Washington ? about 7%; and Honolulu, the only county currently below 2%, could grow as quickly as M aine or Con-necticut, at approximately 19% per month.

Kauai: 1,689 current patients, 7% monthly growth rate for 2017, is a 2018 patient pop-ulation of 5% or 3,322.

M aui: 3,237 current patients, 7% monthly growth rate for 2017, is a 2018 patient pop-ulation of 4.5% or 6,367.

Honolulu: 3,378 current patients, 19% monthly growth rate for 2017, is a 2018 pa-tient population of 2% or 19,236.

Hawai?i: 5,770 current patients, 7% monthly growth rate for 2017, is a 2018 patient pop-ulation of 6% or 11,350.

This creates countywide revenue in 2018 of:

Kauai: $3,986,400 - $11,959,20.

M aui: $7,640,400 - $22,921,200.

Honolulu: $23,083,200 - $69,249,600.

Hawai?i: $13,620,000 - $40,860,00.

Together these numbers paint a more specific picture of potential statewide dispensary rev-enue in 2018: $48,330,000 - $144,990,000, with a likely target of: $80,550,000.

This number is necessarily higher than the $50,000,000 predicted by the flat 2% popula-tion number because it includes actual growth for both the outer islands and for Honolulu.

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Visitor Projections

The final piece of the puzzle in predicting po-tential industry revenue numbers for 2018 is the potential for a medical marijuana tourism market. Act 241 stipulated that the Department of Health may begin recognizing medical mar-ijuana certifications issued by other states in January 2018. If the Department of Health chooses to open this door to medical marijuana tourism, then dispensary revenue across the is-lands could grow considerably. In fact, states that currently maintain medical marijuana reciprocity, such as Arizona and Nevada, re-port that out- of- state visitors generate 20%-40% of their annual dispensary revenue. This percentage, applied to Hawai?i?s 2018 projec-tions from above, yields rough potential visitor revenue figures of $9,666,000 - $57,996,000.

But these numbers for the potential size of the visiting medical marijuana market in Hawai?i can be further refined by looking at county-by- county visitor projections of medical mar-ijuana card holders, visitor length- of- stay numbers, and average medical marijuana pur-chase numbers. The Department of Business, Economic Development, and Tourism publishes predictions for the number of visitors- per-county from those states which currently allow medical marijuana in some form. Applying the metrics for the percentage of a population with medical marijuana cards yields the following range of potential medical marijuana visitors in 2018:

Visitors 1% 2%

Kauai: 947,945 9,479 18,959

M aui: 1,914,835 19,148 38,297

Honolulu: 2,502,761 25,028 50,055

Hawai?i: 1,023,327 10,233 20,467

Total: 6,388,868 63,889 127,777

It is also necessary to adjust the per- patient spend on medical marijuana for visitors.

On the very low end, if the $72 average trans-action amount reported for all medical mari-juana dispensary patients is taken as a patient?s total monthly spend (considerably lower than discussed above); then, for the average 8.5 days that registered patients stay in Hawai?i, each will spend $21. Conversely, on the very high end, visiting patients could purchase the full 8 oz. monthly allowance permitted under the Interim Dispensary Rules for upwards of $2,000. A more realistic high end number would be the $300 monthly patient spend dis-cussed above. Adding in these patient spending numbers yields potential visitor revenue per county of:

$21 Low End $300 H igh End

Kauai: $199,068 $5,687,671

M aui: $402,115 $11,489,008

Honolulu: $525,580 $15,016,568

Hawai?i: $214,899 $6,139,960

In sum, if the Department of Health chooses to open the door to medical marijuana tourism, total potential visitor spending in 2018 could range between $1,341,662 and $57,996,000.

Bringing It All Together

To recap: at 14,074 patients, Hawai?i?s medical marijuana dispensary system can expect rev-enues between $12,000,000 and $38,000,000 annually.

Projecting forward to 2018 and beyond as the caregiver system is phased out and the patient count grows across the state to between 30,000 and 40,000 patients, the dispensaries may ex-pect industry revenues between $30,000,000 and $144,000,000.

Similarly, visiting patients may supply an ad-ditional $1,300,000 to $58,000,000 in statewide industry revenue.

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In total, dispensaries in 2018 and beyond may expect industry-w ide,

annual revenue between

$31,300,000 and $202,000,000.

This range is very w ide, the number w ill most likely land somewhere

around $80,550,000 plus some level of revenue from visit ing patients.

These projections will be updated over the next eighteen months based on the specific contours of Hawai?i?s emerging medical marijuana economy as it gets off the ground, establishes prices, and experiences patient growth.

CONCLUSIONThe numbers discussed here are possible, even the largest numbers, but many things will need to go right: qualified patients must obtain cer-tifications, doctors must be willing to certify patients, and dispensaries must routinely pro-duce good products - establishing a solid rep-utation that encourages patients to return in-stead of relying on the black market. Patients are sophisticated consumers with experience in established markets and expectations of qual-ity, product diversity, and presentation that the dispensaries will need to exceed in order to at-tract new patients to the industry. But eight businesses with individual reputations for pro-ducing quality medicine is not enough to grow an industry.

Industry revenue is directly tied to the number of patients in the state and it will take funding to grow the current patient counts: doctors and nurses need to be trained on the medicinal properties and uses of cannabis and the system for certifying patients; potential patients across the islands need to learn that their ailments qualify for medical cannabis and how to talk to their doctor about certification; the public at

large needs to hear about the positive medical, crime, tax, and addiction outcomes in other states; and visitors from across the country will need to know how to use their own medical marijuana certifications in Hawai?i so that they can have uninterrupted access to their medi-cine. The dispensaries, related businesses, pa-tients, and state agencies need to work together to fund programs that provide this education to all levels of society.

And the dispensaries will not be the only ones to benefit from the growth of this industry. For every $1 spent in dispensaries, states with es-tablished medical marijuana industries report that $3 of additional economic value is injected into the economy at the local level. This ex-pansive economic benefit comes through com-petitive wages and local businesses who will provide products and services to both dispen-saries and patients across the state. The State of Hawai?i and the Department of Health will also benefit substantially from the resulting dispensary licensing fees, normal GET taxes, and state- income taxes collected from the dis-pensaries and ancillary businesses.

Hawai?i has the momentum right now to de-velop, grow, and evolve. The Hawai?i Dispen-sary Alliance believes that the best way forward is through the creation of a dynamic, creative, regenerative, local, world- class medical mari-juana economy here in Hawai?i. As discussed in the Alliance?s White Paper, Hawai?i?s Medical Marij uana Economy: A Roadmap for the Fu-ture, the dispensaries will have to collaborate with the government, the public, related in-dustries, and with each other for this to work. We must integrate the values of transparency, compliance, flexibility, proactivity, and vision into the industry and capitalize on Hawai?i?s strengths in agriculture, medical tourism, medical innovation, technology development, and social climate. Together, Hawai?i?s com-munity can build this industry right the first time ? creating great medicine, good jobs, and a brighter future for all of Hawai?i.

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IntroductionHawai?i?s medical cannabis industry is set to grow by leaps and bounds. By the end of 2016, dispensaries will provide patients with medicine and improve the quality of life for thousands of people. Yet stigmatization of medical cannabis use remains prevalent across the state and dispensaries will need to invest in community outreach to better reach their cus-tomers, expand the patient base, and change the mind of the general population. Dispen-saries must also keep in mind that communi-cation is a two- way street: while the dispen-saries should foster patient and community understanding of medical cannabis; the dis-pensaries will also need to use their community education efforts to listen and respond to the concerns of the community. Only by under-standing the consumers and the community, by anticipating their needs and exceeding their expectations, will dispensaries generate patient loyalty and increase their market share.

The Hawai?i Dispensary Alliance maintains relationships with dispensaries across the country who excel in community outreach and education. In particular, The M idwest Com-passion Center in Illinois and Harborside Health Center in California are both out-standing examples of dispensaries that invest in and benefit from a well- informed community. This article looks at what these dispensaries are doing to succeed in the areas of community outreach and education and draws a few gen-eral lessons for Hawai?i?s new dispensaries and local communities to consider.

Midwest Compassion CenterLocated in Romeoville, Illinois, the M idwest Compassion Center (M CC) is one of the na-tion?s leaders in medical cannabis community outreach and education. M CC has established a thriving relationship with both their local law enforcement and their local community. The dispensary is primarily focused on patient ex-perience, responsibility, and compassion. Through their programs, M CC has gained vital information about their patient base, expanded patient acquisition, and cultivated a welcoming reception for themselves in their local community.

Local Law EnforcementPrior to opening, M CC initiated a relationship with local law enforcement by inviting the po-lice to tour their facility. The village chief of police, lieutenant colonel, and five other offi-cers were in attendance. Additionally, M CC provided extra product packaging and con-tainers so that the police would know what M CC?s medical cannabis products looked like if found on the street. Establishing a strong and positive relationship with local law enforce-ment opened the lines of communication and created goodwill that is helping to reconcile the stigma created by the War on Drugs within local law enforcement agencies.

Best Practices from Dispensaries Across the Country for Building Strong Patient and Community Relations

By Kasie Kashimoto

COMMUNITY EDUCATION & OUTREACH

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The ?Push? Strategy - Street TeamM CC engages in ?push? style community out-reach and education through its Street Team. The team?s focus is interacting with the com-munity at local events such as 5ks, fairs, and festivals. They attend two to three events a month as both sponsors and participants. Amongst many other community events, M CC?s Street Team has participated in events with the AIDs Foundation of Chicago, the Illi-nois M otorcycle Freedom Run, and Delnor Hospital?s Fibromyalgia Support Group. M CC values the performance of each of its Street Team members and compensates them ac-cordingly. Each team member distributes a unique handout which directs potential patients to submit M CC membership applications - 25% of all handout recipients apply. M CC notes that the success rate of this type of ?push? outreach depends heavily on the type of event and the prospective patient pool.

The ?Pull? Strategy - Condit ion Related Support Groups

The real value from M CC?s community out-reach and education has come from connecting with condition- related groups such as the AIDS Foundation; support groups for fi-bromyalgia and epilepsy; and veterans. This ?pull? strategy enables dispensaries to tap into pre- established prospective patient networks with very high numbers of viable patient can-didacy. For example, M CC gave a presentation to 150 caseworkers of the AIDS Foundation, each of whom managed five to six patients,

totaling a potential 900 new patients. M CC guides these potentially qualifying patients through the medical cannabis card and dis-pensary application processes.

Within these specific groups, M CC also en-gages in social media marketing. For example, they join closed Facebook groups and align themselves with influential medical cannabis bloggers. M CC has found that infographics are one of the most successful social media out-reach tools with consistent shares and re- shares.

M CC?s community outreach and education has grown to such a point that the dispensary is planning to host a patient networking event. Patients enjoy talking to each other, and most of these conversations are happening online in closed groups. Through in- person events, M CC seeks to provide patients with opportu-nities to further these conversations while ex-panding patient?s knowledge and experience about medical cannabis. The end result is loyal customers, greater patient buy- in, postive me-dia coverage, and changing hearts and minds.

Harborside Health Center

Harborside Health Center is respected nationally as a model dispensary. Harborside has two lo-cations one in Oakland and the other in San Jose, California. With over 200,000 registered pa-tients, it is the largest dispensary in the United States. Harborside?s holistic healing philosophy takes a patient- centric approach that encom-passes affordability, compliance, and neigh-borhood safety.

Harborside offers a variety of free classes, support groups, and special discounts to its patients. These support groups are a very fo-cused type of community outreach and educa-tion that provide continuing education about medical cannabis use and generate patient loyalty and community goodwill.

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Medical Cannabis 101The first of the support groups hosted by Harborside is M edical Cannabis 101, a weekly class that helps patients understand everything they need to know about responsible medical cannabis use. ?[This] small, informal group emphasizes factual infor-mation, harm reduction, and experience sharing. While there is a behavioral and information- sharing emphasis, you decide how much or how little personal information is shared.? Increasing patient educa-tion and understanding allows Harborside to assure effective treatment and raise patients? quality of life. Areas of discussion include the different con-ditions that medical cannabis treats effectively, what to expect, how to choose and use the best product for the patient, side effect manage-ment, consumption methods, cannabinoids (THC, CBD, CBN), new research results, and how to talk to friends, family, and physicians about medical cannabis use.

SeniorsHarborside?s Senior Citizen Support group is for patients over fifty who face opposition to their medical cannabis use from friends and family; feel prescription medication is not for them; have questions about medical cannabis use; or seek to improve their quality of life with medical cannabis use, but are unsure of where to begin. The topics that this group dis-cusses include the benefits of medical cannabis; how to talk to doctors, friends, and family; safe access and transportation; healthcare; re-source sharing; and life coping skills. The support group is based on the idea that senior citizens are best understood by their peers.

Families - CBDThe Family CBD Support Group is tailored to CBD patients under 18 years of age and their parents. This support group covers topics in-cluding safety, treatment regiments, the role of medical cannabis, the impacts of CBD use, and

how to breakdown stigmas surrounding medical cannabis use.

What Might Hawai?i?s

Dispensaries Do Sometimes it can be hard to sift through the abun-dance of information available nationally and apply it to our local market and to Hawai?i?s specific needs. Yet, the exercise is worth the effort, and

Hawai?i?s dispensaries will find a lot to emulate in the examples of their mainland counterparts. Here are a few key takeaway strategies for how Hawai?i?s dispensaries might consider investing in the local community through outreach and education.

Relationships w ith Government Agencies

Using M CC?s relationship with the local police force as an example, Hawai?i?s dispensaries should initiate contact with key local govern-ment agencies and establish a strong and posi-tive relationship from the start. Key govern-ment and regulatory bodies that Hawai?i?s dispensaries should be in communication with include the State Department of Health, the county police and sheriff departments, the State Department of Public Safety, and the Federal DEA to name a few. In addition to the law enforcement and the regulatory side, the dis-pensaries might also forge valuable relation-ships with the Department of Business, Eco-

Frequently Asked Patient Questions

How to I talk to my doctor about medicating w ith cannabis?

What?s the difference between medical cannabis and the black

market?

How do I get my certif ication?

How do I learn about dosage, strain selection, use frequency, etc...?

Do I have to smoke it or are there alternative consumption methods?

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nomic Development, and Tourism; the Hawai?i Tourism Authority; local Chambers of Com-merce and Development Corporations; and of course with trade and advocacy groups like the Hawai?i Dispensary Alliance.

Market Information Every business owner knows that understand-ing one?s consumer is key. This can be difficult in the medical cannabis industry due to the in-herent public suspicion of the industry and because the spectrum of patients includes in-dividuals from all ages, walks of life, medical conditions, and knowledge levels about medical cannabis. To interact effectively with the com-munity and tailor their efforts to specific pa-tient groups, dispensaries need to gather and act on the following information:

- Pre- existing levels of cannabis related knowledge

- Current black market purchasing trends- The types of products patients are most

interested in and why- Patient concerns about speaking to

doctors, family, and friends- Product guidance (dosing, strain selec-

tion, frequency of use, consumption method, etc)

- Why patients choose medical cannabis over prescription drugs

One of the best ways for dispensaries to gather this invaluable information about the wide spectrum of patients is through community outreach and education. Rather than pure, impersonal market research, this information can be gathered organically through regular and consistent interactions with the patient community. This can come in the form of support groups, regular educational seminars, patient and customer surveys, and both on and off- line social networking.

?Push? and ?Pull? StrategiesAs M CC?s efforts indicate, ?push? type strate-gies generally have a pretty high direct return rate on potential patient application numbers. Hawai?i?s dispensaries should engage in active and frequent community engagement that en-courages new patients to enroll. The key fea-ture of this approach to local community rela-tions for dispensaries is the opportunity to put a human face on the dispensary. When the dispensary becomes a collection of humans actively engaged in the community, working alongside the people at local events instead of sitting behind locked gates 24/ 7, then the community will respond in- kind and the dis-pensary will be more likely to act in a manner aligned with the spirit of the community. It is up to the dispensaries to create the relationship they want with their communities. The reward for the dispensaries is goodwill locally and higher patient numbers across the state.

?Pull? type strategies likewise benefit the dis-pensaries by serving as a critical source for the information that dispensaries need about the market. The key recommendation here is that Hawai?i?s dispensaries should look to connect with existing condition based support groups and tailor the information they provide to those group?s specific medical needs. For example, like Harborside, one specific group that dis-pensaries should actively seek out is senior cit-izens and their families. Those over 55 make up

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over 40% of the current patient base in Hawai?i, and they are often poorly educated about medical marijuana, highly stigmatized by their peers and caregivers, and lack easy access to online information sources. Dispensaries should initiate strong patient relationships on the individual level by providing appropriate resources to walk potential applicants through an ongoing educational process as each patient identifies the medicine they need. The funda-mental element of the ?pull? strategy in the medical cannabis industry is to market the dispensary as an accessible information re-source for each ailment and patient type.

Final Words of Advice from MCCIn addition to the strategies discussed above, the M idwest Compassion Center kindly pro-vided a few pro- tips for Hawai?i?s Dispensaries regarding community outreach and education:

- Employee training: Dispensaries should train their employees to interact with patients who are sick. Employees will establish relationships with patients who may overcome their illness and get better with medical cannabis use. At the same time however, employees will inevitably create relationships with terminal pa-tients who pass on. The emotional strain of working with the sick is often an unanticipated strain on employees. Dis-pensaries should care for their employees

just as much as they care for their pa-tients, and provide emotional training so that employees may better cope with such sad, yet inevitable, experiences.

- Patient Intimacy: Dispensaries should

make every effort to get to know each patient on an individual level and staff and schedule operations accordingly. No two patients will be the same. Patient interactions should be personal and tai-lored to an individual?s specific set of circumstances. M CC has found that initial patient consultations take 45 minutes to an hour, and that repeat pa-tient?s average visits are 20- 25 minutes.

- Form a close relationship with your local community: Start conversations with neighborhood boards, nearby home-owners associations, police, nursing homes, memory care, the ?4/ 20 crowd,? condition- related groups, and more! Dispensaries should be willing and ready to talk to anyone and everyone, and to spread the word about medical cannabis. Only through continuous positive en-gagement will hearts and minds be changed across the islands.

ConclusionThe Hawai?i Dispensary Alliance is looking forward to working with each of the dispen-saries, state agencies, and local communities to implement community education programs like these with the potential to change the conver-sation about medical marijuana in Hawai?i. M ore information about potential community relations efforts and how the dispensaries and the communities can work together are dis-cussed in our recent HDA White Paper: Hawai?i?s Medical Marij uana Economy: A Roadmap for the Future. We would like to extend a special thanks to N icole van Rens-burg, co- owner of the M idwest Compassion Center for her contributions to this piece.

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