House Standing Committee on Judiciary & Hawaiian Affairs

Welcome, everyone. Thank you for being here today. This is an informational briefing from the House Committee on Judiciary and Hawaiian Affairs for the Hawaii State Legislature. My name is David Tarnas. I'm the Chair. We have Vice Chair Mahina Poepoe. Representative Shimizu is here.

Other Members will come presently or they may be watching from their office, as are many other people. And we are recording this so that we would be able to have this archived and people would be able to watch it at another time. It's Wednesday, January 29th, 2:00pm here in Conference Room 325.

And the purpose of today's informational briefing is to learn from experts, both from Hawaii here and from the continent, about the current regulatory framework and industry trends in Hawaii for medical cannabis and hemp, as well as best practices from other states for managing legalized cannabis for adult use that protects public safety and public health and supports a viable and well regulated industry that successfully attracts consumers and suppliers away from the illegal and unregulated market.

The briefing will also address the need for a robust public health campaign in a dual use market, that means it's both medical and adult use, to prevent cannabis use by those under 21 and prevent impaired drivers from operating a vehicle while under the influence of cannabis.

We have a bill, HB 1246, which we'll have a hearing on next Tuesday. And that bill is one that we've worked on based on last year's bill, and over the interim, we continue to work on it. And the bill really is... It's to make sure it's a comprehensive draft of reforms to transition the state safely, efficiently, and equitably from what is now a medical use only state to a dual use state that legalizes adult use cannabis while maintaining the protections for current medical patients.

We also want to make sure that we create not only a robust industry with multiple opportunities for entry and participation by small businesses here in Hawaii, but also social equity components that allow for disadvantaged people to participate in the industry. And very importantly, multiple public education campaigns, again, to make sure that we address the adverse effects of cannabis use for minors and adults alike.

This has been something that is an important matter for me. You know, I first got into Legislature 30 years ago, and I first proposed legalization of cannabis back then. We weren't ready. We're getting closer to being ready, and I'm hopeful this session we can make good progress. This bill is an important piece of legislation.

I want to commend the state for their work so far, and we'll learn more about what we've done in the state here. We have seven individuals with us that I want to introduce briefly, and then each one of them will speak in turn. First, we have Karen O'Keefe, director of state policies at Marijuana Policy Project, a national organization. Online, we have Kaliko Castille, CEO of ThndrStrm Strategies and former president of the Minority Cannabis Business Association, with experience on the mainland and in Hawaii.

Also, we have Jennifer Flanagan, attorney with the Liberty Square Group, senior advisor for Vicente, and former Member of the Massachusetts State Legislature, and also former member of the Massachusetts Cannabis Control Commission. So she has a unique perspective that she can share with us about her experience with the cannabis industry and in Massachusetts.

Tai Cheng, president of Aloha Green Apothecary, which is an Oahu medical cannabis dispensary, and also chair of the Hawaii Cannabis Industry Association of multiple dispensaries that join together in association. We have Andrew Goff, deputy attorney general with expertise in medical cannabis, hemp, and adult use. Appreciate you being here.

And we have also the acting administrator, acting program manager from the Office of Medical Cannabis Control and Regulation at the Hawaii State Department of Health. Welcome. Thank you for being here today. And Kai Luke, community advocate and a member of the Cannabis Society of Hawaii. Thank you for being here.

So what I'd like to do is start out the... And I want to... Lynn Lei is an epidemiologist at the State Department of Health and acting program manager for the Office of Medical Cannabis Control and Regulation. Thank you for filling in as manager there because I know you're going through the process of selecting a new manager, and so we'll look forward to learning more about that when it's appropriate. Okay. So I'm going to introduce each of the individuals I just mentioned, and then they'll give a presentation.

Members, we just listen to the presentations first, and then we'll come back and ask questions afterward. And that way we'll have the full breadth of information that these individuals will provide to us. There's some handouts that each one of you have. It's a brief summary of the bill, which we'll deal with next week.

Couple of handouts from the Marijuana Policy Project, and so far, that's what we have presented to you. I want to welcome Representative Chris Todd is here. Representative Diamond Garcia. I've already mentioned Rep Shimizu. And then here we have Representative Amy Perruso. Thank you for being here.

Okay, let's go ahead and get started. First, with Karen O'Keefe, director of state policies at the Marijuana Policy Project. Ms. O'Keefe, thanks for being here. You traveled a long way to get here, and I appreciate that. Please share with us your presentation first.

Mahalo for holding this hearing and for inviting me to be a participant. It is so nice to be here with you. When I started, I started at the Marijuana Policy Project, which is a nonprofit that works to change cannabis laws. We don't think that adults or other individuals should be criminalized for using cannabis, and we think that regulation is a better approach than prohibition to deal with the risks of cannabis.

And when I started, I had done a lot of work in human rights and social justice and peace, and a lot of my friends just didn't quite get it, why I thought of it as a social justice issue. But right before I started back in 2003 at MPP, I'd been a student practitioner in criminal defense law in New Orleans. And I had seen just staggering racial disparities, which we've seen in the data throughout the country and sentence that truly shocked the conscience for cannabis.

And I also had had friends in college who had gotten caught up in the criminal justice system. Two different people that had wanted to be teachers and didn't end up pursuing that career path because of a conviction that they had. They didn't spend any jail time, but that scarlet letter had put a stop to their dreams.

So to me, I also saw the abject failure that cannabis provides prohibition had had at keeping young people from accessing cannabis. I thought cannabis policy reform was a moral imperative, that it was a civil liberties issue, a civil rights issue, and also just an issue of good public health policy.

And those friends, like most Americans, have evolved their thinking in the last 20 years. I think, hope they evolved a little bit quicker. Back in 2003, when I started working on this issue, as you can see on the screen graph, cannabis legalization had 34% popular support among Americans. And no state had legalized cannabis.

There were only eight states, one of which was Hawaii, that had allowed medical cannabis back then. And in the past 20 years, we've had seen a transformation. We have double the amount of popular support for making cannabis legal for adults throughout the country. It's also up in the 60s here in Hawaii.

And now we have 24 states where cannabis is legal for adults 21 and older, which are home to 54% of the U.S. population, also two U.S. territories as well. And now 38 states have medical cannabis. The states in dark blue are the ones that have adult use legalization, and light blue are the ones with medical cannabis only on the map.

Voters have been way ahead of elected officials on this issue. Most of the early medical cannabis laws were by voter initiative, and the first state legalization laws were also by voter initiative. But since then, a lot of legislatures have dove in and worked on the issue, and that's where I focus my work.

I work on state legislative work, and I've had the pleasure of working with people to craft laws in a number of the states, including the first two states to legalize through the Legislature in Illinois and in Vermont, and also Connecticut, Maryland, Delaware, and several other states that I've had the pleasure of working to help balance stakeholder input and craft good public health measures.

So Hawaii, of course, if you pass a cannabis legalization law, has 24 states that have gone before you, and you've been able to incorporate the lessons of so many of these other states that have gone first. And I commend the Chair and Sean Aronson and the Attorney General's Office for their work to build a cannabis legalization and regulation bill that puts public health and public safety at the forefront and that also is grounded in equity.

Some of the key features that we think are important for cannabis regulation, which are reflected in the bill, are first, preserving the medical cannabis program and preserving medical access to cannabis. Some of the states have not done as good of a job as others. It's very, very important that seriously ill patients be able to continue accessing their medicine, and not only that they continue to from the existing locations, but also have additional places so they don't have to travel so far.

So this bill sensibly allows all of the new retailers to serve both medical patients and adult use consumers, and doesn't impose that kind of syntax tax that has the lower existing tax rate for medical cannabis, which is very important to us. It's also very important to us, as was mentioned, that it includes small local businesses and have an opportunity for that. There are caps on the number of businesses that any one licensee can have an interest in.

And it also has a craft dispensary option, which is really important to let small businesses grow cannabis and also sell it direct to consumers. And it has the provisions that were mentioned to make sure that people have opportunity to succeed, to have technical assistance for those individuals from impacted communities.

And it also has limited numbers of square footage that each of the grows can have to make sure there's space for small, small growers. Next up, to me, one of the biggest advantages of legalization is that it allows for regulation. You cannot control something, of course, that's prohibited.

And on the illicit market, when people are buying illegal cannabis, there are sometimes pesticides that are maybe safe for shrubbery, but certainly not safe to light on fire and inhale. And there are heavy metals that are extremely dangerous that can be an illegal cannabis. Sometimes it has even been laced with fentanyl. This bill puts public health at the forefront.

It has regulators control the production process. It has the possibility of secret shopper programs and testing by the state itself, in addition to independent laboratories that do testing. And it has a lot of robust regulations to make sure that the products are in childproof packaging, that there's not flashy graphics.

There can't be any graphics on the outdoor outside packaging. And it has regulators provide warning signs that will be in all of the cannabis businesses, that people will be reminded of the dangers of driving under the influence, which some cannabis consumers are not fully aware of.

So we'll educate them about that as well as other risks, which is very important. Next up is being realistic and making sure it's not set up in a way that the illegal industry can out compete the legal industry. Washington state initially had a 25% tax at three different points of sale.

They had to reduce that because that was excessive and you couldn't compete with the illicit industry. So this bill sensibly has robust regulations and it will generate a significant amount of tax revenue, but it's not so high as to make it impossible to compete with the illegal market.

It's also very important, and I believe that Mr. Goff will talk about the issue of intoxicating hemp regulations to make sure that there are also regulations on these Delta-8 products to make sure you have a level playing field and a uniform regulatory authority for both products. Next up is investing in social equity, youth, and communities.

The bill would earmark 70% of the revenue for dedicated funding to make sure that youth have healthy things to do. It has after school programs are a possibility, summer programs, rec centers, and other things to help young people make good decisions and have a productive life.

It also has funding for substance abuse treatment and public safety and other priorities of the state, including, as I mentioned, having those businesses have a chance to succeed. And perhaps most important to me is that it would stop derailing lives for cannabis legalization.

Right now, if you possess more than 3 grams, which is a very small amount, you face possible jail time and a life altering criminal record here in Hawaii. And if you have a tiny amount, less than 3 grams, you still get police interaction and $130 citation. So it would stop that.

And it also includes important provisions that other states have had to, for example, make sure if somebody is simply responsibly using cannabis, that they don't lose custody of their children or lose the opportunity to get an organ transplant if they need, which has happened in some cases.

So, moving back to looking at how legalization is working, it's been 13 years since the first two states legalized cannabis. When they were first debating the issue, a lot of people thought that perhaps it would cause young people to access cannabis more. However, we have a lot of data now, and just the opposite is what we have seen in the government surveys. Under prohibition, high school students are often the ones that are selling cannabis.

On the eve of the first two states legalizing in 2012, a Columbia University researchers did a survey and they found that 40% of high schoolers had a peer who sold marijuana at school school that they knew of. Probably they all had a peer because those 40% were at the school. Since legalization, we've seen very high compliance rates with age gating at the stores, which are in almost all cases 21 and up, only for even entering the store.

And in the new data from 2024, if you look at the data from immediately before each state legalized to the most recent government surveys, 19 out of the 21 states with before and after data have seen decreases in cannabis use by high school students, which is exceptionally reassuring and which shows what I suspected would be true, which is that when you sell cannabis to adults, young people have less access to it.

We also have some nationwide surveys now that half the 54% of the public lives in a legalization state. This is also, you know, something that's happening nationwide. Monitoring the Future is a national survey that's been going on for 40 years. Every year it was 80% or more of high school students said it was fairly or very easy to get marijuana. After states started legalizing, for the first time ever it dropped below 80%. It was down to 65% in the most recent survey. And the CDC also does a survey. They don't ask that question.

But both Monitoring the Future and CDC have seen drops nationwide in all of the surveyed grades for using cannabis currently too. So it's extremely reassuring now. While middle schoolers and high schoolers have less access to cannabis post-legalization, we've seen the one age group that we've seen an increase in is people that are over 65.

There are a lot of older people in Colorado, the numbers tripled. It's still only 9%. But of people over 65, there are a lot of people that have very hard decisions to make if they suffer in pain or with sleepless nights, or if they take medications that can have very damaging side effects.

And for many, cannabis is a safer alternative that allows them to have a more comfortable life. And a lot of those people don't want to register in a medical cannabis program. And insomnia is not a qualifying condition anyways. Next up is the issue of growing the economy.

Certainly I wouldn't say do something that's wrong for the purpose of generating revenue, but I think legalization and regulation is the right thing to do. And it certainly is an added benefit that you can bring in a lot of money for desperately needed services that can really improve people's lives.

Since state started legalizing, just through 2023, they have brought in $20 billion in cannabis specific taxes, not counting general income taxes, with over 4 billion in 2023 alone. Where I live in Michigan, the state brought in $473 million in cannabis tax revenue in 2023. It's a state of 10 million people with a 16% tax rate.

They give 15% back to the cities where the sales occurred. And there was one township with under 14,000 people that was able to buy a $840,000 fire rig that they desperately needed that they can now use to help the whole county just with cannabis tax revenue. So I did a quick calculation just based on Nevada, which makes for conservative numbers to see how much potentially Hawaii could expect adjusting for its population and tax rate.

If it was just extrapolated from Nevada, I would anticipate about $33 million in cannabis tax revenue in the first full year of sales and over $15 million every year starting in the third year. So it's real money that could really help people get after school programs, substance treatment, housing, and things that they otherwise don't have. In addition...

in the interest of time, if you could begin to wrap up.

Sorry. And the last thing is tourism. I'll just mention that tourism skyrocketed, and there have been concerns that tourism could be hurt. Tourism skyrocketed in Colorado post-legalization and has also increased in California. Of course there was a plummet post-Covid, but it has recovered and was the most record year for tourism in the past year.

And it actually, I know there was concern particularly about tourism from Japan. And tourism from Japan actually increased post-legalization in California from 2016 to 2019 too. So in conclusion, I would say that 19% of Hawaiians residents have admitted to using cannabis in the last year. Under 3% are registered patients.

That means that 16% of Hawaii residents are using cannabis illegally. And while it's not risk free, it is far less dangerous than alcohol and even many medications. Support this bill. I think it's time that we let adults make their own decisions about cannabis and simply educate them about the risks. No state has ever repealed its legalization law because they enjoy very strong popular support. So mahalo for your time and consideration. I have a written statement that has citations for all of the data I provided, too.

Thank you, Karen. And I did pass out to Members the two documents from Marijuana Policy Project, so you have those for your further study. If I could ask Members just to hold onto your questions, write them down so that we can follow up and ask questions after the presentations, that'd be great.

Next we'll hear from Kaliko Castille, who is a former president of the Minority Cannabis Business Association. I think with a very useful perspective when it comes to the involvement of disadvantaged communities in the cannabis industry. You're on Zoom. Yeah. So please go ahead. You're up. Welcome. Please proceed.

Aloha and good afternoon, everybody. Appreciate you having me. Thank you, Chair and other Members of the Committee. I don't have a presentation available today. I've been battling the flu here in the house, but wanted to make sure I was still able to show up today. So really appreciate it.

Thank you for not coming here in person and sharing your flu. But please get better. But please continue.

I appreciate it. So, like I said, my name is Kaliko Castille, and I'm honored to speak today on the upcoming legalization bill, but more specifically about the critical importance of social equity and ensuring robust participation from Native Hawaiian communities in the emerging cannabis industry.

You know, for some context, I've spent the last 13 years deeply involved in cannabis advocacy as well as the legal industry. I started as an intern for the National Organization for the Reform of Marijuana Laws, NORML, in 2011, and most recently served as president of the Minority Cannabis Business Association, a national trade association working to make an equitable and inclusive cannabis industry.

Devoted nearly every moment of my professional career to ending cannabis prohibition and ensuring the communities who are disproportionately impacted by prohibition have the opportunity to disproportionately benefit from the legal marketplace. That's really the idea behind a lot of the social equity provisions that we're going to be talking or that I'm going to be talking about today.

As we move forward in this process with cannabis legalization Hawaii, I think it's crucial that we recognize both the unique opportunities, but also the potential pitfalls that can arise when we fail to intentionally design a framework that promotes equity, inclusion, and restorative justice to those who have been most impacted by prohibition, and particularly in this state, Native Hawaiians.

We know that cannabis prohibition has disproportionately impacted communities of color and indigenous communities around the country and Hawaii. This historical inequity is compounded by the legacy of illegal occupation and its long term effects on Native Hawaiians. For generations, Native Hawaiians have been subject to systemic marginalization, economic disparities, and cultural erasure.

It's essential that as Hawaii legalizes cannabis, we do so in a way that prioritizes the inclusion of Native Hawaiians in the opportunities that arise from this new industry. To put it simply, cannabis prohibition did not simply criminalize a plant, it criminalized communities. Families were torn apart, livelihoods destroyed, and opportunities lost.

In the wake of legalization, many states have made strides towards repairing these harms through social equity programs that directly benefit those communities who have been most affected by the war on drugs. And Hawaii must do the same, and we must ensure that the benefits of legalization go to those who have borne the brunt of cannabis prohibition, most notably Native Hawaiians. To truly achieve social equity in the cannabis industry, the legislation must include specific provisions to ensure Native Hawaiian participation.

And these provisions shouldn't be afterthoughts or secondary considerations, but must be woven into the very fabric of the bill. And I know some of these already are, and I do want to talk about some of the best practices that we've seen across the country, sort of in three buckets. Number one being priority licensing. Right.

And so this is sort of the key aspect of any social equity framework is the allocation of licenses for those who have been historically excluded. In Hawaii, this must include set asides for Native Hawaiian or other equity entrepreneurs, ensuring that they're not just consumers of cannabis products, but active participants in the production, distribution, and sale of cannabis.

This can be done through setting aside a percentage of licenses designated specifically for Native Hawaiian and equity owned businesses, much like we see in other states with successful social equity programs. And that's not to be, even in having those set asides, there's obviously a lot of political discussions around those, but this is what we have seen, that in the successful programs that are having more equitable outcomes in their industry, we are having set asides for equity entrepreneurs. It's also really important.

The other bucket is access to funding and technical assistance. Equity in cannabis cannot be achieved simply by offering licenses or waiving fees. It must be accompanied by a robust and targeted support system. In particular, Native Hawaiian and equity entrepreneurs need access to resources such as business incubators, mentorship programs, and financial services.

This is especially true when we consider the historical barriers that have made it difficult for Native Hawaiians to access capital or navigate complex regulatory requirements in other industries. To address this, any bill must include grants, low interest loans, and or access to business incubators that are specifically targeted to Native Hawaiians and other equity licensees.

This includes ensuring access to timely funding that can help Native Hawaiian businesses overcome startup costs, buy equipment, and hire staff. And I'll make a finer point on that, that a lot of times in some of these states, they will allocate some portion of the tax dollars coming from the revenue of sales and then putting that into a social equity program to fund some of these businesses.

But that comes after the the industry has already started or after the market has already opened. Right. And that's often too late for a lot of these social equity entrepreneurs that need to get up and started even earlier than that. So in order to avoid these pitfalls, we need to ensure that any equity program is backed by real practical resources that give Native Hawaiian and equity entrepreneurs the best chance to succeed. My apologies. Also, restorative justice measures, I know this is also included in the bill. But social equity isn't just about economic opportunity. It's about restorative justice.

Any bill should include provisions for expunging past cannabis related convictions and offering financial compensation to those who have been disproportionately impacted by criminal convictions related to cannabis. This also includes not barring people from getting involved in the industry. I know that's one of the provisions in this bill is to allow folks with cannabis related convictions that aren't related to guns or other things to allow them to still be in the industry. Most states have still not fixed that wrong.

There's a lot of states that are still barring people from medical programs and elsewhere from getting involved with any cannabis related convictions. So making sure that that's in this bill would be super important. And then I think, you know, talking largely about the sort of economic potential of making sure specifically Native Hawaiians are active in the industry.

You know, I think this legalization of cannabis in Hawaii offers a unique opportunity to create a thriving, diverse, and sustainable, sustainable industry. By making sure the Native Hawaiians have access to these economic opportunities, we can build an industry that reflects the values of equity, justice, and community empowerment.

As many of you know, Native Hawaiians have long been stewards of the land or of the Aina. And many have been have deep connections to the agricultural traditions. Cannabis cultivation provides an opportunity for Native Hawaiians to leverage their agricultural expertise in a new and profitable way. By fostering Native Hawaiian involvement, we not only help to right past wrongs, but also build a more vibrant and resilient cannabis industry that benefits all of Hawaii islands.

Additionally, ensuring that Native Hawaiian participation can enhance Hawaii's reputation as a leader in cannabis equity, Hawaii is uniquely positioned to set a national example for how cannabis legalization can be carried out in a way that respects the rights of indigenous people and uplifts historically marginalized communities.

With the right social equity provisions, Hawaii can become a model for other states to look to when implementing fair and just cannabis policies. Lastly, you know, as Hawaii moves forward with cannabis legalization, we have a responsibility to make sure that Native Hawaiians are not left behind.

This once in a generation opportunity to right past wrongs, promote restorative justice, and build an inclusive industry reflects the diversity values of our communities, and I urge community to ensure the cannabis legalization bill includes strong provisions for Native Hawaiian participation, funding, technical support, restorative justice, and cultural integration.

We must take bold action now to ensure that Native Hawaiians have an equal seat at the table and a fair share of the economic opportunities that will come with cannabis legalization. By doing so, we will create a cannabis industry that's not only profitable, but also just, equitable, and deeply rooted in the traditions and values of our islands. Thank you for your time and I look forward to working together to build a more equitable and inclusive future for Hawaii. Mahalo.

Mahalo, Kaliko. Thanks for that information, that perspective. Please stick around. We'll have some questions after all the presentations. Okay, next we'll hear from Jennifer Flanagan Long, who, as I mentioned, is an attorney working with some firms that she can describe. But of interest to Members here, she was one of us. She was a legislator, and she says, I remind you, I voted no the first time around. And she tell us the story that happened after that. Jennifer.

Thank you, Mr. Chairman. Thank you, Madam Vice Chair.is my. So I am not technologically advanced. See, this is why Tai's here. Yeah, that is it. There we go. So a lot of what you've heard here today are the reasons why...

Move the mic closer to you. We want to make sure everyone on YouTube hears you.

Oh, YouTube. So that you've heard a lot of reasons why today that the importance of the bill passage and why cannabis legalization is important to a state not only for social justice purposes, for economic purposes, and for inclusion purposes. The question that I was asked as I was debating whether to vote for or against our ballot question in Massachusetts in 2016, and what I was asked when I was in the state Legislature in 2017 when we were voting on the final passage of the bill, is why does this matter from the government's perspective?

We can talk about the importance of righting the wrongs of yesterday. We can talk about the importance of social justice. We can talk about all the programs that should be put in place to help people enter the community cannabis space. From a government's perspective, it's an opportunity for the government to take part in legalizing and intoxicating substance, just like we have other intoxicating substances all throughout the state.

If you look at my background, I serve as a senior vice president for government affairs at Liberty Square Group. It's a policy and campaign organization that I work with. But as my time as a cannabis control commissioner, I will give you this brief visual. In November of 16, I voted no on the ballot question.

As a citizen of Massachusetts. I had pledged no during the campaign, much to the detriment of everyone who was for it. I was a sitting state senator. I was making sure that I was working on the issues that were important to me. I was the chairman of the Mental Health and Substance Abuse Committee.

I was helping people get to rehab for the drug addictions that they suffered from. I was the vice chair of Public Health. I was helping with our public health systems, making sure that we have a quality health care systems across the State of Massachusetts.

Never once did I suspect I was going to be one of the first five commissioners at the Massachusetts Cannabis Control Commission. So when I went to the ballot box In November of 16, then in July of 17, I voted yes on the legislation because we cleaned it up a little, made it a better bill.

The governor called me and said, I need you to be my public health appointee to the commission. And I looked at him and said, as he was a Republican Governor, you know, I voted no. Right? Like that's a thing. He's like, that's why you're going. That's one of the reasons.

I want you to make sure we do this right. I want you to make sure that we look at the regulations and that we have strong regulations. And I want to make sure you do right by the people of the Commonwealth of Massachusetts. So I left the Legislature in 2017 to go on to the Massachusetts Cannabis Control Commission where I spent four years helping to stand up, not only a legalized substance, but an entire agency.

My first day on the job was five people in five cubicles who couldn't talk to each other because of the open meeting laws that we had to abide by. And we were told that we had to have our regulations completed by December 22nd of that year. So it was like, welcome, congratulations. We all got this new job.

I left my beautiful office at the Massachusetts State House for my nice little cubicle. We didn't even know who answered our phones that day. We didn't even know what our phone numbers was. And so the lessons that we learned, and what I'm really here to tell you, is that we had to implement a ballot initiative.

People of Massachusetts said they wanted legalized cannabis. It was our job to take the will of the people and make sure that that was implemented. But not only that, one of the most important things in wearing all of my hats, citizen, Senator, and regulator, is that you want a bill that has the ability to have balanced regulations.

You don't want everything set in statute because to change a statute is sometimes like moving rocks. You want regulators who are committed to making sure that you have a robust and a safe industry. As the public health appointee, it was my job to work with the public safety appointee to really make sure that these two entities were also at the forefront while we worked on social justice issues at the same time. And by design, the social justice appointee and I didn't always agree. I'm saying limited advertising.

She's saying first amendment rights. I'm saying, this is for over 21. She's saying, let people choose. That's the way democracy is. That's what happens. But that was one of the robust conversations that we, as regulators, could have and change the regulations as we see fit.

The other thing about the economic opportunities you don't often hear not only about the types of licenses. You'll have outdoor growers, you'll have indoor growers, you'll have people who are manufacturing in the kitchens, but you're also going to have people who may want to do delivery.

You talk about social consumption sites, talk about the various types of licenses that people want to get into. People have said to us in Massachusetts, you don't have a lot of diversity in the initial license types that you offered. Many people would say to me, I was waiting for delivery. You didn't offer delivery for five years.

I wasn't opening up a grow facility just to get in the industry and it's going to cost me $3 million. I was waiting for my license type, and that's an important conversation to have is the types of licenses that people want to see see in a particular state. The other thing for economic opportunities is about your ancillary businesses. One of the things that we don't talk about is who's painting the building, who's putting in the electrical wiring to set up the actual infrastructure, who's the person that's going to come in and put the plumbing into a building.

These are economic opportunities for people who want to take part in the cannabis industry, but who don't want to touch the plant. Not everybody wants to be plant touching. And I think that's an important piece to any piece of legislation when it comes to adult use cannabis legalization.

Not everyone wants to touch it, but people want to be a part of it. The same thing happens in a lot of our sports teams, right? You're not working for the sports team, but you help them build the stadium, you're helping build the roads to get to the stadium. The same thing happens here.

Some people are paving roads to get to facilities. And so non-plant touching opportunities is one of the most un-talked about subject when we talk about cannabis legalization. And one of the other things is why does it matter? Why should we legalize cannabis? There's a huge connotation that comes with the word cannabis.

Either people take it a particular way. Sometimes, because I have a background in mental health, I say it's triggering for some families. You have families who have lost their livelihoods, you have families that have lost their parents to go to jail, you have lost their houses, and some people have thrived. There's both sides of this.

And so for legalization in any state, and I think Hawaii has an opportunity now where you, you may be coming in a little late, but you're not, you're not too late to come in because you've learned from all of us that didn't have anyone to learn from. When we got into Massachusetts, we had seven states before us.

I literally would call the people in Colorado and Washington and Oregon and say, what did you do wrong? Tell me what you did wrong because I really don't have time to hear what you did right. Right now I have three months to write regulations. And that's how it all starts. But if creating a regulated industry brings it in line with other intoxicating substances. We have caffeine, we have alcohol, we have nicotine, we have tobacco. They're all intoxicating, they're all regulated.

And they're all regulated in a way that people can make the choice whether or not to consume. The economic benefits to the state through the generated tax revenue. In FY24, Massachusetts took in $272 million in taxes. That's $272 million we would not have had for some of the programming that we have in Massachusetts on a robust list of issues. In FY23, we took in $263 million, and it only cost us an initial startup of $7.5 million.

We got an initial allocation of 2.3 because we started September 1st, so we were mid-year, and then we got another allocation of 5.2. So it only took us 7.5 million. And you look at me and say, only. We didn't have a secretary, we didn't have a receptionist. I had to hire inspectors and legal teams and researchers and staff people. The only people that were hired on day one were the five of us. And so 7.5 million in the, in the big scheme of things wasn't a lot of money to create an industry.

Public health is protected with regulations through safe tested products for consumers. We have 23 different public health regulations regarding youth prevention and public health in Massachusetts all embedded into our regs that probably nobody in Massachusetts has read unless they care about what the operation systems look like. You can embed them in your regulations.

There are ways to protect for diversion, making sure there is no diversion, looking at advertising regulations, making sure people don't go into the store if they're under 21, making sure the packaging looks a certain way, what the products are actually going to look at.

We went so far as to look at the colors of the edibles, which takes a very long time to get agreement on colors of anything. And one of the biggest things, and this is what I told the governor when he appointed me, is you have got to have a public awareness campaign, which is included in this legislation.

We were not going to open up doors until our public awareness campaign was done because they had me at the helm saying I'm a public health person. And so if you look at our website, moreaboutmarijuana.org, we call it More About MJ. You will see that there are sites for parents to understand this, there are sites for people to understand this.

Because the one thing we overlook is that for everyone who wants to be involved in cannabis, there are people that have never used this stuff and don't know how and they need consumer education just as we would give them education on the level of caffeine in coffee or the level of sugar in candy.

It's the same type of work that we did at the commission. And regulating cannabis works to decrease outside this legal market. You may never get rid of the illegal market, but you can work to reduce it with also having tested products and making sure that products are safe for people.

And so I think that's where, in the four years that I spent, the 13 years I spent in the Legislature, the four years I spent on the Cannabis Control Commission was, how do we make sure that this is going to work for people? Because if you don't have a regulated body that's working for the people, then it's never going to work. I'm happy to take any questions that you may have.

Thank you very much, Senator. Appreciate that. Please write your questions down so we can ask questions after the presentations. Next we'll hear from Tai Cheng, president Aloha Green Apothecary dispensary here on Oahu, and also chair of the Hawaii Cannabis Industry Association. Thank you, Mr. Cheng, please proceed.

Thank you, Chair, Vice Chair. Happy New Year. Thank you for the opportunity to present today. I'm here to talk about really the current medical market, how the licenses have been doing so far, and how what the state of affairs is really with hemp as well as cannabis.

This is a slide that I put up once in a while about regulate, educate, and tax. This works for many of the intoxicating substances that Ms. Flanagan spoke about, but really it works for anything that is illicit and that our community or people believe to be normal to be used.

Move that closer to, if you would.

This is a little bit of a snapshot of where we are. Medical cannabis started... It started in 2000, but in 2017, we had eight vertical licenses in the states. The first licenses opened their dispensaries in 2018. There's currently 24 retail dispensaries operating in Hawaii. One was lost in The Lahaina fires. MedCan.

The entire program has generated about 759 jobs. That's a very surprising for most. Aloha Green, the company that I founded, we have about 80 to 85 employees that work for us so far. And the DOH will confirm, I'm sure later. No criminal complaints or no serious adverse health cases have been reported with the MedCan program.

We're at about almost $70 million each year right now in total revenue. And there's about 3 million in GET that is collected each year. Yes, you can see the patient numbers here on my slide have come down just a little bit. But we're somewhere between 31,000 and 34,000 registered patients in the State of Hawaii.

We talk a lot about tax. You know, some, some, some legislators believe that there is no tax to be made. My numbers are slightly higher than Ms. O'Keefe's. We include income and corporate tax that is generated, and so it does get higher because of the number of jobs that we predict that will be created.

The MedCan, I said, yeah, like I said, 67 million was the peak in 2023. We collect a little over 3 million in GET that year. Flower prices have dropped from the initial high, about 550an ounce to about as low as 99 when on sale. But that competes with the illicit market which is at about $150 an ounce.

Now I know a number of bottles that predict revenue are dependent on the price per ounce of the dispensary stores because that is the main competition that a regulated market will face. But in accordance with other states, we've estimated about a three to four times factoring of the medical market versus a dual use market.

HICIA, the industry association, estimates that our dual use market is between about 170 to 430 million dollars annually. And if we pulled out the taxes, then we'd say about 39 million in the first year and about 109 million in the fourth year or when the, when it's mature. The reason for that delay is because it takes time to set up production, it takes time to set up retail. New jobs. I can talk a little bit about jobs that we've created. You know, Ms. O'Keefe talked about has some projections based on the Nevada market.

They thought there could be up to 6,446 new jobs in a dual use program. The local association HICIA projected about 3,375 new jobs. And, and that was from last year. Aloha Green. We operate a 60,000 square foot facility up near Wahiawa. You can see the facility there in the top right corner. We built that from scratch.

So we brought everything in. We hired local contractors to build that. That's about 6 million I think that we sunk into the cultivation site. We have 80 employees, 30 cultivators, many of them, UH bachelor holders, some master students as well in soil science and agriculture and botany. We have five lab technicians.

I'm super proud of a KS graduate that we had. He went to MIT, he returned home to Hawaii to work for us. We have PhDs that work on our lab technician staff. And currently our head director, he went to Kailua High School and he went to UH as well and is a science graduate.

So we have a number of employees and there's a lot of great opportunities for jobs that wouldn't really be there in Hawaii if not for the medical cannabis industry. Finally, I have another story about returning Hawaii residents that come back. We currently carry this Auntie Aloha brand.

It's two wahine that grew up here in Hawaii, but left because they didn't receive one of the medical cannabis licenses to grow. So they went to California and started their own brand. And it harkens back to a lot of the Hawaiian of Hawaiiana and like ideas of Aloha. We now license that brand.

And now one of them have moved home with her family and they're going to school here now and the other partner is hoping to move back as well. So there's a lot of opportunity for Hawaii residents who have been displaced either to Nevada, Colorado, California.

If we had, if we could open up a new market for these people. So illicit cannabis. We kind of talk about what's available now, and I think a number of legislators. It's difficult to see when you're in the capital because you're not surrounded by it, but I don't think that it's a good idea to keep our heads in the sand. Illicit cannabis is available in Hawaii. It's available outside the medical system.

This is a picture of a online store that will deliver to schools to your hotel room with products that are 10 times the limit of what is allowed by the medical cannabis dispensaries. This is not lab tested. If it is, it's not properly lab tested. It's not in childproof containers.

It's in bright packaging that is appealing to children. And this is what's being sold to children and to unsuspecting visitors that come to visit Hawaii. There's a number of. There's a lot of information here that I put about the farm bill and about hemp itself. Not all hemp producers are violating and producing illicit product, but it's an easy way to make a quick buck at this current time with the loopholes that are there. So in addition to dual use, regulating hemp is super important.

One of the dispensaries has been going around just taking pictures and submitting all these illegal dispensaries to the Attorney General. And the number one dispensary on Google reviews for Hawaii is an illegal dispensary that delivers in Waikiki. And my final slide is that Hawaii really is an island.

We are now the last democratically controlled state without dual use cannabis. This is a list of Democratic trifectas. So the House, Senate, and the governor is Democratically elected. Hawaii is the only one that's not have adult use. In fact, there's three Republican trifectas, Ohio, Montana, Missouri that have adult use before Hawaii. So Hawaii really is the last one. Is it too late? No, you know, I think it's there's still time to build on what we have now in MedCan, but we definitely are behind when over 55% of the United States can access cannabis. Thank you.

Thank you very much. I appreciate your perspective, Mr. Cheng. Let's move on now to Andrew Goff, deputy attorney general, who has spent a lot of time providing legal expertise in the medical cannabis and hemp and adult use area on behalf of the attorney general. Mr. Goff.

Yes, thank you, Chair.

There we go. All right. I am a Deputy Attorney General, so I will begin with a legal disclaimer. This is for informational purposes only. This is not legal advice and doesn't constitute a legal opinion of the Attorney General or an endorsement of the bill or cannabis legalization of my office.

That being said, I've been asked to give an overview of HB 1246 and the enforcement provisions that are put in there. And the general focus of these enforcement positions are to move from a criminal-focused criminal law to a more compliance-focused regulatory law. Now some of you might be asking, this bill is gigantic. It's 300 pages.

It's complicated. Why don't we just use the same existing laws that we have? We have laws on the books. Why don't we just expand the laws that are there? Why don't we just enforce the laws that are there?

And to that I would say after working with these laws for 10 years, when you're talking about medical cannabis, when you're talking about illegal cannabis, when you're talking about hemp, these laws are fragmented over a bunch of different HRS sections. They're fragmented over a bunch of different jurisdictions for enforcement.

And it's extremely confusing for not only the consumers and the operators within the space, but for regulators themselves and for judges. When I go in front of a judge to explain what is going on, it is really hard to connect all of these dots.

Every year there is legislation trying to open up these medical markets, open up the existing laws, deregulate hemp. I would suggest that if the Legislature is going to move more towards more open markets, there need to be more safeguards in place and a more streamlined law in place to enable effective enforcement.

And if the Legislature does want to move in that direction, this kind of bill would create a uniform framework with uniform terminology, uniform standards, all in one place that everybody can look at clear enforcement provisions that focus on compliance and more than anything, funding from tax revenues.

This would be sustained funding that the Legislature doesn't have to come up with every single year, for not only enforcement, but for harm reduction aspects such as substance abuse and mental health programs and other public health initiatives like education and community building money for youth programs, for childcare, for school lunches, for things that we can use to rebuild community.

Now, the bill does include several enforcement mechanisms. I'm going to go over these real high level very quickly. So if you have any questions, feel free to reach out to my office. I could talk about this stuff for hours.

So first up, regulatory enforcement so this does provide for very clear enforcement for inspection, not only of licensed entities, but unlicensed entities. Inspection by the cannabis office and the Attorney General's Office. It provides for the authority to seize. So if you see something that is illegal, you can take it off of the shelves.

That is something that we do not have currently. Administrative holds and embargoes. The office can also issue cease and desist orders and levy fines. And again, this is not just licensed businesses, anybody that chooses to sell this stuff, you can walk in and tell them to stop. Civil law enforcement.

This is something that already is on the books. Nuisance abatement. Nuisance abatement actually enables criminal drug laws to be enforced through civil mechanisms. You can go, if there is somebody selling drugs illegally, you can go to a court, have a court, and join them. This is a civil action, not a criminal action.

The court can prevent the nuisance, can suspend any business license or professional license that's involved, can issue fines and liens on the property directly. Now this is important because it can get the landlords involved. Landlord doesn't want liens on his property. It can also shutter the business, shutter it for an entire year.

It doesn't matter who is using it. So the landlord will lose rental income from that business for an entire year. So this will pressure a landlord to force their tenants to comply. The bill provides resources to the Attorney General Nuisance Abatement Unit for cannabis-related enforcement. The AG's does have a nuisance abatement unit.

It has not been funded since 2005 and to the extent it does still operate, it focuses on moving more serious crimes. The bill also explicitly makes selling cannabis or hemp without a license or proper authorization a consumer protection violation.

This implicates the unfair and deceptive acts and practices law, gives you another civil mechanism to approach people that are acting illegally. And you don't have to invoke criminal laws. As far as DUIs, I know that that is a very serious concern of everybody, driving under the influence. The Bill does provide open container provisions and consumption while driving.

So those would be violations to reduce actually using while you are driving. It also provides grants for impairment detection. It has a public safety grant program that can provide drug recognition training to not only law enforcement officers, but prosecutors.

Anybody that could benefit from this kind of training to enable you to detect impairment, not whether the cannabis caused impairment, but impairment in general. And then it includes public education initiatives for regarding the dangers of driving under the influence and aimed at reducing. And studies have shown that those kind of initiatives for drinking have had an impact.

Now I do want to point out that there are serious criminal law enforcement issues that could spring up. And this is not only for legalization. This could be current. The way that the current rules are written.

The hemp, as Ty pointed out, hemp markets creates a certain gray market and that even with expanded medical programs like they did in Maine, where they kind of rolled back the inspection aspect, they prevented law enforcement from really looking at the medical program at all.

And that led to money laundering and illicit operations on the scale that they had to get the Federal Government involved and you could look that up. To get ahead of that, HB 1246 includes first ownership restrictions.

So anybody who's applying for a license will have basically their ownership vetted to make sure that their finances come from a clean source and that their ownership is not organized crime related. It also offers funding, again a sustained funding source from the tax revenue to the Attorney General for this kind of white-collar financial investigation.

The bill would also encourage participation of illicit operators. Currently there are legacy operators that are operating all throughout the state. And this bill provides for smaller craft cannabis licenses with lower barriers to entry that are specifically to be given to small farms that focus on indigenous crops and farming practices.

Now this is to encourage legacy operators to get a license and operate legally and come into the light essentially. The bill also has grant programs that can offer technical assistance to boost compliance of smaller operators. These people have not been, they're not used to following compliance, they're not used to regulations.

If you can get them assistance, tax assistance, bookkeeping assistance, compliance assistance in general, it will help with compliance and help bring illicit operators on board. There's also licenses can be reserved for social equity applicants and social equity grants can be provided to community groups for essential services such as childcare, youth programs, school lunch programs.

So the cannabis tax money can go to something that builds the community. Now, regarding hemp and hemp-derived cannabinoids, Ty already went over the dangers of those. I'm going to skip most of that. When people think of hemp initially, you think of industrial aspects, you think of fiber, textiles, that kind of thing.

Hemp-derived cannabinoids have become a little more prolific, especially the CBD at the beginning. But the more and more that CBD is gaining less of a market share, you're seeing an increase in intoxicating cannabinoids. These have problematic public health implications.

They're usually created through more chemical means, through solvents that aren't always washed away and they're not tested correctly. We don't know exactly what's in them. And they are in. I mean, these are 50 milligrams of Delta 8 THC. And this is just a small one.

You know, the suggested dose of a medical cannabis, one dose is 10 milligrams. So this alone is 5 milligram, or five times the legal amount. As far as hemp regulatory enforcement, the bill would basically give you an administrative enforcement.

Like I said, the current enforcement is fragmented across multiple jurisdictions, so it's really difficult to enforce and to get everyone who has jurisdiction to enforce to buy in. There's no dedicated funding for the regulatory enforcement at all. And this problem is ubiquitous. It's in every smoke shop across the state.

And there are still questions on whether something is criminally legal or just regulatory illegal. And that means the police have to be involved. What this bill does basically is creates a consistent enforcement from a single agency funded by cannabis use tax sales. It ensures uniform regulations consistent with medical cannabis.

It provides clear enforcement authority for restricted cannabinoids and ensures industrial hemp is not regulated as a cannabis cannabinoid program. So, so you can still get the benefits of the hemp Crete, of textiles, of building materials that come with industrial hemp without having to go through the hoops of a restricted cannabinoid product.

So on those products, the bill would give you clear authority to restrict or ban these products. You would need a permit to sell them. And again, you have inspection authority with the AG's and with the office. They can go in. If you don't have a permit and you're selling it, they can seize them right off the shelves.

They can fine you, they can order you to cease and desist. And this is something that currently does not exist. And then again, industrial hemp is not regulated. So if you have any questions, I would love to talk about it more, but I am over time.

Thank you very much, Mr. Goff. You're a wealth of information and yes, we will have some questions, but first let's go to Linh-Vi Le, who is the acting manager of the Department of Health, Office of Medical Cannabis Control and Regulation. As an epidemiologist, you've been asked to do a tough job as you were managing the office.

We look forward to your presentation. You can tell us more about how it's going. Please proceed.

Thank you for understanding. Good afternoon, Chair, Vice Chair and Members of the Committee. First of all, happy Lunar New Year. That's in Vietnamese, if you're wondering.

Thank you.

So thank you for the opportunity to present OMTCR's work. We were asked to give also an overview of the staffing and our budget as well. I'd like to begin with our mission, which is to ensure safe access to medical cannabis and promote public health and safety for cannabis and hemp-derived cannabinoid products as well.

To achieve this, we prioritize fast and efficient patient registration to ensure timely access to our medication. Our registry team processes the 329 patient cards within two to three business days, often within one day. We also advocate for patient well-being by engaging with the community.

We survey patients and hold listening sessions with providers to help us inform the rules and also our legislative proposals. Our dispensary licensing team is committed to ensuring cannabis and cannabinoid product safety. They have dedicated significant time to addressing multiple bills and acts.

Recently the team completed the hemp rules and is returning their focus to completing the medical cannabis rules all while conducting 180 to 200 inspections annually.

The office recently completed a reorganization to add a surveillance education and science section. We have established an adverse event reporting and response system. Along with other public health surveillance, we are providing in person education about medical cannabis to our patient community and working to bringing continuing medical education to Hawaii's licensed healthcare professionals.

The team conducts studies to support informed decision making, including a market demand study which will help inform your decisions around adult use cannabis legislation. So, I was asked to talk a little bit more about this.

What we've done is we've engaged a public policy consulting firm to independently assess Hawaii's medical cannabis licensing regulatory framework, but also mainly to predict the demand for adult use.

And this will be they're conducting surveys to among the residents of Hawaii in a market research panel and as well as among tourists and of farmers as well who may be looking in order to provide information, you know, on the taxation levels, impact on the revenue, the gray market share, the licensing needs that current farmers have and the effects on medical cannabis program and public health and the environmental health as well.

We expect that the market demand report will be available to you by mid-March and are working to try to facilitate to make sure that these surveys actually will happen on time and be able to provide you that data. So, our staffing is organized by three key functions I just covered.

We have 19 established positions and will be 32 in total. With the completion of our reorganization. The registry team is fully staffed. The dispensary team will have a new hemp unit to enforce hemp cannabinoid product regulations. We had to reassign two of the dispensary surveyors to handle hemp responsibilities when hemp was brought under OMCCR.

For the surveillance education and science team, we are acquiring the expertise needed to ensure that chemical, occupational and environmental health safety standards are there. In recent years we receive about 2.5 annually in special fund revenue from patient registrations and dispensary licensing fees.

So, you can see in the pie chart there that before the increase in licensing fees, about 80% of the revenue were from the patient registration. Sorry. Now the revenue is balanced between patient registrations and dispensary licensing. We are working on a budget of about 2.1 million in expenditure.

In current years we have been appropriated general funds to cover most of the personnel and operations costs. So, we have a cash balance of approximately $11.6 million. Our office was set up to be self-sufficient. So, our future projected future use will be to supplant the general funds with the special funds.

Once at full staff staffing capacity, we will be able to apply the accrued revenue to enforce for enforcement activities to address the growing number of retailers carrying prohibited products. We have already begun to collaborate with law enforcement on this.

Staffing of the hemp unit will provide the bodies needed to educate retailers on what is prohibited and to work with law enforcement to identify and remove the prohibited products. There will be costs associated with this. They include product testing, engaging the prosecutors, embargoing products, and ongoing surveillance.

We are requesting access to the funds to ramp up our education efforts. These were included in our budget request last year but they were not approved and so we are requesting them again this year. We have begun and will expand medical education for healthcare professionals.

Less than 10% of medical schools in the US is teaching about the endocannabinoid system which is the largest signaling system in our body and how medical cannabis works to help balance that system.

So what we're trying to do with the continual medical education is to have more physician nurses and healthcare providers to know how cannabis works so that they can help so they are informed in their clinical care and support to not only the medical patients but also to other users as well who maybe not be medical patients but are using and there are implications with using and drug interactions as well.

Our patient survey shows that more of our patients rely on dispensary retail staff than their providers to help them choose their medication. So, we will also equip retail staff with skills to help patients without recommending medications.

There will not only be youth cannabis use prevention campaigns but also public education so that adults are aware of the potential risk of cannabis as well as hemp cannabinoid products. Many are not aware for example that even the non-intoxicating CBD have cannabinoid drug interactions with prescriptions but also over the counter drugs.

And we would like for the public to know that public education efforts are costly. Other states annual campaigns cost about 1 to 2 million. We have a youth campaign that's starting under our ADAT program for 1 million. So, while they're costly, they are very critical.

Education is needed now even before adult use because our population-based surveys are showing that 11 to 12% of our general population are already using or have report to use in the past month. Finally, we welcome the opportunity to work with a legislator to ensure that the medical patients are protected under the adult use bill.

In addition to the providers listening sessions that we're holding, we're also planning to do patient outreach in their communities and hold listening sessions with the patients and get their Input to ensure their safe access.

Before I end, I would like to bring your attention to four bills which we would like your support, including three for hemp covering minimum age requirement, the definition of manufactured hemp products, and registration requirement.

We also propose that the one-to-one patient caregiver relationship includes caregivers' ability to cultivate given that the patients there are patients who cannot grow and who do genuinely need their caregivers. So, you know, because some of them do not purchase from the dispensaries for various reasons.

Two very important support we need are extensions to the medical cannabis interim rules. We continue to need the flexibility to adapt to the changing cannabis landscape. We have also received requests from the licensees for changes to the rules.

Most urgently, our six dispensary positions are expiring in five months, and we request that their positions be extended for at least another two years. So, our legislative liaison is helping to identify the sponsors for these extensions. Thank you very much for your attention. The offices staff are here as well to help answer any of your questions.

Thank you, Dr. Le, very much. Appreciate your overview of the current programs and your legislative proposals. Let's go on to our last presenter and then we'll go to questions. Next, we have Kai Luke, who is a Member of the Cannabis Society of Hawaii. Kai has actually worked in the industry both here in Hawaii and in Missouri.

Has a very strong resume in cannabis retail production, inventory management, operational and product development, compliance and consulting. And you're from Hawaii and you've got an important perspective for us to hear. So let me turn it over to you, Mr. Luke.

Appreciate the time to talk today. I'm here with a lot of smart people in the room, so I'm glad that we have a chance to share some information, education and perspective. So, my name is Kai Luke. I'm a community advocate and I know cannabis is a big buzz, C-word, but community is very much included in cannabis.

So, my transparency statement. There is no external funding for this presentation, not receive any funding from any pharmaceutical, alcohol or tobacco industries. This testimony is personal, and it does not constitute any official position of Cannabis Society of Hawaii. And while this presentation may touch on. Oops, sorry.

May touch on regulatory developments in other states, it does not imply any endorsement of these policies by us. And so, a brief overview of Cannabis Society of Hawaii. We're a nonpartisan community group based in Hawaii. We are not political or a lobbying group.

The group actually started from a project from the University of Hawaii Community College's Good Jobs Hawaii Initiative in 2020 when there was the COVID epidemic. We did get a chance to organize the first Medical Cannabis Day at the Capitol this past June which featured doctors, farmers, and other community advocates.

Our primary focus is bringing the community together by sharing information, education and perspective. Quick personal history I am born and raised in Hawaii. I am a DARE graduate.

I got a chance to go to Khmer Explorations part of OHA entrepreneurship program for hemp in 2005. I was part of UH Cannabis Research Study as participant at Queens Medical Center. I am a 329 medical card patient as well. Previously a caregiver.

I got a chance to work on CBD distribution in 2015 with health food stores and head shops. I did get a chance to work in the licensed medical dispensary locally from 2017 to about 2020.

After that I had gotten a chance to get contracted to open up a medical dispensary in Lake of the Ozarks, which then we actually won Best Dispensary Award by Missouri Magazine in 2022 and 2023 because it was all about the dispensary experience in Missouri. We actually went through a ballot process.

We were actually one of the polling stations to help get our information and we did transition from medical to dual use which is a eye opening experience because I think a lot of people think that there's just a bunch of young people that just want weed, which was not the case.

A big wave of I think it was about median age was about 55 and up were the largest demographic of adult use patrons in the beginning of the program and I do understand the seed to sell tracking system.

So, I have Biotrack experience and a METRC certified. Brief history because there is maybe these points that maybe need to be touched on. It goes farther back than this, but these are just some notables. 1741: the Gardener's Dictionary mentions cannabis and its medical uses.

In Hawaii someone did a great article in 2016 about Konoa Noa, which is the Hawaiian newspaper that featured cannabis as medicine. In 1988, the endocannabinoid system was discovered in Israel with Dr. Raphael McCallum. In 1998, a US patent is filed by the Department of Health as cannabinoids as antioxidants and neuroprotectants.

In 2000, Ben Caetano created the Medical Marijuana Act, and we were the first in Legislature to do it, not by ballot. 2017, First Medical Dispensary opened up in Hawaii and here we are to present day 2025.

One thing I was asked to talk about is the potential for workforce development, college training and how that relates to community service. St. Louis University was really ahead of the curve by understanding what is to come with their adult use. So, prior to adult use, while they had medical, they already got started on programs which are - they have minor programs and major programs to help the workforce development in the industry. And this actually allowed for a better qualified workforce which entails better operations, actually a higher return on their investment to serve more of the community. So, without investing into the community, you do have a high turnover like we do currently in the system.

So, this actually just outlines some of the initiatives that St. Louis University did. They actually won outstanding program of the year by university professional and continued education for their cannabis program. So, I think this goes to show that there is an investment by colleges and education to create a workforce that can help the community, really.

And there are other states that start with M that do have college programs like Maryland, Massachusetts and Maine. So, there are multiple programs that do have college training to help the workforce. Some of the road bumps, I call these roadblock plus speed bumps. The current federal position is still where it's at.

There's still a lot of propaganda and reefer madness and there is perpetuation of the propaganda. We definitely need more law enforcement education to have more of these conversations.

But even for the regular, even for the cannabis community, and that's part of why I'm here to speak on, is there's a lot of fear, a lot of stigma, a lot of miseducation, and this is where it adds to the bureaucratic red tape and hindering of the legislative process.

Yes, there is over regulation, but we do know that there has to be a work together. But because of the high barrier to entry, it does lose a lot of public trust from, you know, the opposition outside the cannabis community, but also within the cannabis community, which doesn't allow for community engagement and cooperation.

Like Dr. Linh just mentioned about this, the survey and study that's going on right now, I think it's worth mentioning that even with a opportunity to engage into a survey that can provide more data, a lot of the legacy growers and farmers, they're very skeptical to participate because of the traumatic experiences and the war on drugs, period.

So even getting good data is a little bit hard. But, you know, that's, that's the fight is, you know, who wants to participate with the data and hopefully the data will show. But I did want to mention that because there's still a lot of distrust in the system.

You know, I hear this thing about, you know, people don't like lawmakers, but at the same time, lawmakers make the laws. So, there's definitely a way to work together here, but without outlining and making actually really strong points for legacy farmers. That's where there's a big void.

Because a lot of people feel that there's still a lot of wrongs that they would like to see right. And some people are trying to wait for it to be 100%, which nobody's going to be 100% happy. But there needs to be progression as we move forward.

And also, there's no clear way for local participation and opportunities, even though it's outlined in some of the surveys as well as these future bills. And, you know, just to kind of speak on that, we're not here to discuss any bills or take a position.

We're here as information and education and just perspective on things that we've heard and seen in the community. So, I hope you guys can just appreciate that side of it. What are some of the future visions that we did here?

Accessibility medicine is one of the hugest points. In my experience going through transition from medical to adult use, especially in a heavy amendment to state. There are a lot of people who are highly considerate about not being on a list. You know, there's a lot of that feeling.

And with accessibility to medicine, we find that making it available with more distribution points gets the medicine. There's more competition where you have medicine being offered at a higher quality at a lower price. This is very impactful for the many people that come to the plant as medicine within the medical or the adult use opportunity.

I think that's why one of our top things besides public safety is accessible medicine. Public education is obviously being started with OMCCR. I think they're starting to do a great job with newsletters and the community in person, opportunities to learn. But we also need more legal protections for cannabis in general and even safe spaces.

I think this is one thing that gets overlooked a lot as we have medical and potential adult use. But where are these safe places? Right. DEI is always a hot term, but I feel like even with the current presidential recommendations, DEI is still a important factor, especially in Hawaii. So, it definitely needs more concern and awareness.

Some of the things that we've heard that could help is expediting licensing programs for Native Hawaiians or other minorities from our local community that is impacted heavily. And the ACLU reports does say that Native Hawaiians are the most impacted. This is where the consideration for expedited licensing I think will definitely help.

Protections for land, environment, those are things that can be created through the potential revenue of this new opportunity. As more people get the opportunity to join this legally. More social equity programs and technical assistance. That is definitely things that have helped other states.

And we think that that is one way that the people that are looking to get in can get the extra care that they need so that they have a good chance to launch. We do hear prioritizing indigenous growers and incentivizing small locally owned farms would help if they're producing food that also might help.

One thing that is a concern is insurance as well as funding. So, there is, you know, really no local funding source. We know the federal issue.

However, maybe the revenue from generating a dual use campaign can start to create its own fund where it can be used almost as a bank through, through a, maybe a local nonprofit like OHA or CNHA.

And then some of the bigger vision is like a cannabis research center that can help some of the issues locally with maybe universities that can take on some of the things like cancer or epilepsy and things like that that are autoimmune diseases and things like that.

And I guess the last thing I'll say is the cultural recognition about the - where the native Hawaiians stand and where these, where the chance to give back is.

And that's with things like these and opportunities like this to show up, to create space for others, to help push it forward, because these are the local people that really want to pay it forward and help provide more medicine out to the community. I did have some pictures on here that show the hemp home on Maui.

And I thought that was a really good way to, you know, to talk about the industrial hemp side, which, you know, we could definitely using hemp to cleanse the land. Growing hemp can actually create these bioproducts to build with, so we're not importing as much wood, I guess you would say, to build.

But, also, it employs people locally. Right. It gives them good jobs that are meaningful to the land because it's also naturally sustainable. Hemp homes are naturally fireproof, mold resistant. I think there definitely should be more conversations about that and some of the other considerations. We have some of these on the bottom right here; New Jersey, they've set up a way where police officers are allowed to use cannabis off duty, and Utah, where firefighters are first responders, are able to use medical cannabis off duty. I think those are some really considerate ideas that take in not just cannabis, but the community in general, because it affects us all.

And, you know, even with this cannabis opportunity, we want to make sure that it's helping the greater community. And how is that? Well, there's a bigger picture and hopefully that's where everyone can be part of that conversation, engage and kind of pay it forward for each other.

Thank you. You want to wrap it up? It'd be great.

Yes. This past summer, I did get to go to see three cannabis hotels throughout the Midwest. So, I just want to mention that these are the safe places that we're kind of mentioning talking about. In Oklahoma, there's a Hemp hotel. In Phoenix, there's the Clarendon. In Vegas, there's the Lexi Hotel.

So, all of these places allow for consumption. And even the Phoenix one has a room for people that aren't staying that they can rent a day pass even. So having safe places when you have cannabis available is, I think it, needs to be on the list.

And I just want to say thank you for your time here for questions. I appreciate the opportunity.

Thank you, Mr. Luke. I appreciate that.

Well, members, we've had a lot of information provided to us, and I wanted to now open up to questions. I have a number of questions but let me open it up to the committee first to see if you have anything. Otherwise, I can go ahead. Anybody want to start with anything? Vice Chair? Anything.

So maybe I'll just start the conversation. You know, there's - as we look at our status quo and we look at potential changes at the federal level with whether rescheduling or legalization, President Trump said that he had supported the legalization vote in his home state of Florida.

It's difficult to predict what the new administration will do, but it seems to me it would be advantageous for us to have a regulatory regime in place for adult use before the federal government makes those changes. I would like your opinion on that.

Maybe I could first go to you, and then first let me ask from Karen O'Keefe and then maybe to Jennifer, and then others might want to chime in.

I agree. At some point, given that we have 24 legalization states, federal law inevitably is going to change. For the first time ever, we have a U.S. president that said he supports legalization and the state's making their own decision.

At the point you have federal legalization, there's a very real chance there could be interstate commerce, that it might just be automatic unless they explicitly say there's not. So, if Hawaii has passed legalization, then you'd have the possibility of being up and ready to export it, and that'll be important to have not have other states be shipping to Hawaii in the future years down the road, you're more likely to be able to be, you know, at least competitive at the national level with the brands, the Hawaii grown that's included in the bill.

And otherwise, I think it would behoove the state.

I think you're right.

I think, you know, from when we were crafting our regulations back in 2017, 2018, 2019, we knew in the back of our heads, because President Trump was there at the time, that we very well could use our regulations but then have allowed the transportation piece, the commerce piece, which coming from the East Coast, we're thinking people from the West Coast who have a better climate for year round outdoor grows would then benefit because you're able to now transport it to the East Coast.

So, we were worried about our farmers because we get one grow season and that's basically what you get in Massachusetts. But I think the commerce piece is going to be the biggest part of it. And you see it in other regulatory bodies anyway, right?

We all have our alcohol regulations; we all have certain regulations that we have in the states. We're expecting that the regs will be up and ready, you know, in each state and that the feds may make tweaks to it. So, if Hawaii legalizes before that happens, then like Karen said, you're already in and ready to go.

And I pretty sure you have some people in this state who are ready to just back up, you know, cargo and move it to the, to the continent.

Well, certainly the export is one opportunity, the other is dealing with import.

If there is interstate commerce allowed under any federal changes, then we would be looking at a flood of, you know, California, Oregon, Washington, other states sending their goods here, and we would need to be able to regulate that or else it's the wild west, no regulation.

I don't know if anybody else would like to comment on that. If not, I can go. Oh, please go ahead.

I would add to that that one of the considerations probably should also be there are protectionist aspects of the bill that require residency for licensing and those would not be available if that becomes federally legal.

So, if the intention of the state, the legislature is to give advantage to residents in some way, then that would only be pre-federal legalization.

Please go ahead.

I'll add to that. It also is possible under federal law to explicitly say the Dormant Commerce Clause, which is what means that you have to have interstate commerce, and you can't have residential requirements can be waived.

So, if Hawaii already has legalization, you could have a seat at the table and say we really care about this residency piece. Please say that there's an exception to this, for example.

Any other comments I can go to the next question? Yes, please go ahead, Kaliko.

Appreciate it. Thank you very much.

I think one of the other things I would highlight is that being able to get it done before a potential rescheduling or a federal regime comes down, make sure that you do have some homegrown businesses that are starting to get up and build some sort of, you know, sort of experience behind them before the larger players are trying to enter the Hawaii market.

Because I do think that under a rescheduling regime, you're going to see even more consolidation by the largest multi-state operators and they're going to be able to try to get out into some of these other markets through an interstate commerce compact.

But I think if you guys had homegrown Hawaii cannabis companies, if there was that interstate commerce and a potential bill like Representative Huffman of California has put forth that you could have direct to consumer commerce through online sales, I think that would put Hawaii in a competitive position later on down the road.

Thank you, Kaliko. I appreciate that. Representative Bilati.

Just a follow up because I do not practice commerce law: can you say that again? I think I just heard you say that if we do this before there's legalization at the federal level, we could actually protect our market more possibly.

So, what I was suggesting is the default, if the federal law says nothing about interstate commerce, the default is the dormant commerce clause would mean every state has to allow the import and export of any federally legal drug. And it's arguable that even with it being prohibited, that would be the case.

But most courts have said it's only in the context of something that federally legal. So, the default would be that you couldn't have residency restrictions, and you couldn't bar imports or put rules on them. However, you can - Congress can choose to have an exception to the dormant commerce clause because it's dormant.

They can say explicitly in the law that legalizes cannabis federally, it's allowed. You can have state specific rules for three years, two years, forever.

So what I'm saying is it would perhaps if you already had a legalization market, you could have a stronger voice with other states that want to keep being able to make their own rules and to advocate at the federal level to have an exception to it, to say, you know, we have a three year buffer or we can have residency or whatever the case might be.

Yeah, but just to clarify on that, that's at the federal level. So, the state, if you did enact something with a residency requirement, it would have to be during federal legalization that the federal government says that you can keep that in. You would not be protected otherwise.

Yeah, that would not be guaranteed. Did you have a follow up question?

No.

Okay.

It is worth mentioning that most of the Republicans who are obviously now in power at the federal level, most of their orientation to cannabis, if they're supportive at all, is to leave it up to the states. Right.

So being able to really set up your own regime and be able to set yourself up for that future conversation also allows Hawaii to be able to be in a negotiation perspective when they actually do write the federal law that like they're likely going to be able to defer to a lot of states.

And doing that ahead of time puts you in a better bargaining position.

Good point, good point. Let me ask a question of you Ty, about the current industry. You know what, what, what would you describe as the current State of the dispensary industry? You showed us on the graphs, slight decline in revenue, but from my understanding the projections for this industry were much rosier than what's actually happened. Could you talk about that?

Yeah. I think a number of the dispensaries that entered the industry believe that dual use could come within five years of the new dispensary of the dispensaries opening. I think what's happened in the last few years, post COVID, is that just as a higher cost in doing business in home Hawaii; I think there's been inflation.

The cost of substrate and the cost of, you know, workers have gone up, but the price of cannabis has continued to fall. Even though cannabis sold at the medical dispensaries were quite high, the prices were high at the start, they've come down by a lot.

The amount of cannabis and the DOH can report to that, even though the revenues have been pretty steady or have had a slight downturn. The amount of cannabis that sold like 2,3,4 times each other year just because the prices have cut out. And that's similar to other states as well.

I think cannabis is a commodity and it's treated as such. And it really comes down to who can operate most efficiently with the low cost. Some of the neighboring islands have a much more difficult time.

There's two licenses that are not doing well just because the number of patients, we only have a captive market of whoever's registered as a 329 patient, and the regulatory hurdles that patients have to jump through versus buying hemp products that are available in smoke stores or buying it online is much easier than having to register.

So, I don't think it's as rosy. I think I would say half the licenses are breaking even and are cash flow positive. I'd say the other half are not cash flow positive.

So, we've got an industry that needs attention. And I'd say understanding that the hemp industry is struggling as well, I don't know if there's anyone who could speak to that. Kai, would you be able to speak to that, to the current state of the hemp industry in Hawaii?

From what I understand, you know, there's different types of hemp, as Andrew mentioned, there's industrial hemp and then there's the cannabinoid side. So, I feel like it's who's working on what because we do need hemp homes. I'm not sure how many people are working on that. I'm not sure.

And I do hear the price of land is obviously really expensive, but the price to bring things in, especially with the Jones Act, is, makes things even more expensive because we're not employing people.

So, I do hear there are struggles especially - I know the hemp industry is also trying to secure loans and because they say it's mixed up with cannabis, they're having a hard time. But I just feel like it depends on what you're working on because I don't think there's restrictions for hemp homes and hemp plastic.

But it seems that, you know, some of the other cannabinoid, hemp cannabinoids that, that, you know, we like CBD. We want to see more CBD, but I'm not sure if there's enough incentives or producers. I hear there's insurance costs that are tough lands always tough. So, there's not as much incentives to get into that.

Where we want to see, you know, we want to see hemp fields cleaning up the soil. Right. We want to see all that, but no one's really taking that first step and I'm not sure if it's because of funding or the loans or just the opportunity. So potentially tax incentives could help.

Yeah. I met with members of the hemp industry and their really worried about their own businesses that they're going to need to close down, just not able to operate.

But they're looking forward to the proposed legislation because they felt it would be better to be operated, to be regulated by an office that is really dealing with all aspects of the cannabis plan. And I wonder if anyone could speak to that because this is really a one plant approach.

And I'm wondering from your perspective, is that, you know, why is that the best solution? Because from what I've understand, that really is the best solution. If you want to...okay, you can start here and then we'll get others as well. Go ahead.

You know, Aloha does have a subsidiary. We are - we have a Hemptuary Hawaii brand that does local hemp products. We are a USDA registered hemp producer here in the State of Hawaii. We're one of only five - or five or six. It's difficult because the rules keep changing when it comes to hemp.

And you know, Hemptuary has always taken the position that they won't have any THC in the products that they sell. We really focus on CBD only. But it is a diminishing market. I think, you know, to, to make money in the hemp industry, you have to look towards it.

It's very lucrative to go towards the THC Delta 8 side or even the Delta 9 side just because it has less regulations. And I think what the hemp industry previously did not like about being controlled under the cannabis office or this new authority was that they had concerns about being treated exactly like cannabis.

But I think they've come now to the understanding that just because there is this authority doesn't mean that hemp will be cannabis. Hemp will have likely lesser regulation and different laws as it's when it comes to its the amount of THC and the types of THC cannabinoids that will be allowed.

So, I think that is something that the hemp industry is starting to understand. I think the recent DOH rules that have come out have really upset the hemp industry. The DOH has come out with new rules that allow for manufactured edibles, but these edibles, the amount of THC that's allowed, are the lowest in the entire nation.

And it makes it very difficult for any producer to produce a product just for the Hawaii market. And so that's something that really, I think is bothering them industry.

Thanks. Any other comments about this one plant approach?

Yes, I'd just like to clarify the comment. Thank you, Ty, for the comment on our regulations. There are other states that have lower regulations and zero allowance of intoxicating THC in their hemp cannabinoid products.

Okay, other comments on the one plant approach? Go ahead.

I would say that I think it's ideal to have one group actually run it because they need to have a really deep understanding of cannabis and hemp. And if you have multiple different organizations, there's extra money that needs to be involved because you need to train more staff.

So having one group dedicated to cannabis and hemp, I think it is ideal because the learning curve and there's less staff needed, really.

Andrew?

Yeah. I would also like to, you know, reiterate my point earlier. Where the current laws are kind of split over a lot of different agencies and jurisdictions and that kind of creates gaps in enforcement. You know, is this DOA's aspect, is this DOH's aspect, is this a criminal aspect?

So having everything under one umbrella, so to speak, does ensure that there is one set of experts, one authority to go to say what is legal and what is not illegal, and one jurisdiction to kind of determine what is this. Right.

In other places, like I know in Colorado, this is difficult because it's regulated by Department of Ag, and then if somebody grows cannabis, they're illegally; they're supposed to be regulated by the cannabis folks. But it also is a criminal thing. So, they don't really know who to talk to at that point. Right.

Is it you're growing hemp wrong or is it you're growing cannabis illegal or is it you are a criminal? So having everything kind of streamlined under one agency kind of will eliminate those kind of gaps.

Thanks.

From a regulatory perspective, you know, you want people who specialize in this type of enforcement. I mean, you know, like Andrew said, if you're growing hemp wrong or you're growing cannabis wrong, that little percentage of THC levels puts you in a whole other agency. Right.

So, Massachusetts, we have Department of Ag for hemp, we have CCC for cannabis. That poor farmer who's trying to straddle both and do the right thing, you know, is either getting in trouble by one or in trouble by the other. And there's no one, just a turn who'd say, "Hey, help me."

So, when you're talking about government efficiencies, having one agency, because then the other piece of it is psychedelics. A lot of states are looking at psychedelics now. And are they going to put that into cannabis commissions? Are they going to put that into the regulatory authorities because they're all plant natured.

And so from a regulatory perspective, you'd want them to be in one agency, especially for your tax dollars, it's going to cost you less.

Rep Bellati?

Can I turn the conversation to a different topic? And because we have a Massachusetts legislator here, can you describe the experience of public safety and how you were able to bolster and the county law enforcement officers through your programs.

And in particular, I'm very interested in the ability to boost up drug recognition experts to help with the concerns that people might be driving while intoxicated.

So, there's a couple of different things. When the Cannabis Control Commission was created under the law, under Chapter 55 to the Acts of 17, we had also we had a commission that was created called Operating Under the Influence.

And so, as we do in Massachusetts, we create these 20 person boards, which isn't always the most effective way to do that, to do government in Massachusetts. But so, we had an Operating Under the Influence Commission convening alongside the Cannabis Commission growing. So, we had a lot of different things happening at the same time.

Also embedded in the law was a designated public awareness campaign for public safety.

And they are Executive Office of Public Safety and Security had a hard time because funding for that had to come from the state, not from the federal government at the time, because it was going to talk all about cannabis and not about alcohol and other federally legal substances.

So, we had those two things going on at the same time. We were having conversations with local law enforcement. So, in Massachusetts, we have municipal police officers, we have state police officers, our sheriffs really run the jail. They don't do anything on the streets.

And talking about what it was going to cost Massachusetts to get DREs trained and to be able to get them into the rotation, one of the biggest concerns we've had, and we still do have, is that if you're calling a DRE, where are they when you call them?

Because if you're looking at operating under the influence laws, most often it'll say impairment at the time of stop. And you can tell me, because I'm not the lawyer that does all this, are you impaired at that moment?

If you have to wait 45 minutes for a DRE to get to where you are, that person may not have the same level of impairment. So, what happens in the process? What does law enforcement do? So, there was a lot of different things happening. One, trying to get people trained as DREs.

Two, looking at the laws of "Are the DREs even admissible in court?" Because if you're going to start arresting people for operating under the influence of any, of any substance, not, I mean, you can be taken Ambien, you can be taken Benadryl, you can be taking, you know, Oxy, alcohol, whatever.

Were they even going to be able to be experts in court in Massachusetts? They weren't. So, working with law enforcement, it's been a multi-year process. Our law enforcement understands that this is now legal. There's some training. There's talk about whether training should be at the municipal training level when they -

Become police officers or should it be specialized? But we, it was painstakingly long to have to deal with it all at the same time. One follow up question.

So all these things happening, the conversations, the training, boosting up of resources, have you seen an increase in what's the data? An increase in what? Or any stops of people because of them being intoxicated or because there has been.

There's been plenty of stops because it's cannabis related only? No. Most people that are stopped, if you ask your law enforcement, have polysubstance use. So there's more than one substance on board of someone who could be driving under the influence.

They could have used cannabis, but they could have drank, they could have taken a prescription medication and then use something else that had a drug interaction with it. So a lot of times it's not strict strictly cannabis.

And you know that's where as you're legalizing one of the things to look at is you are operating under the influence laws because does that include everything? It probably does. It should. But operating under the influence is anything that makes it intoxicating. Right.

So there has not been reports that the increase in number of stops because of cannabis. There's been, there can be an increase in number of stops from many reasons, but it wasn't cannabis related. Only.

One of the concerns Members, if you have questions, go ahead and then I'll ask questions afterward. Representative Garcia.

Thank you. To Mr. Cheng, during your presentation you talked about certain illegal dispensaries in Waikiki and and elsewhere. So is law enforcement aware and are they working that might be for the ag. Are they working to combat those illegal dispensaries?

And then also lots of vape shops currently sells vaping products which they advertise as THC products. My first name is Diamond and lots of those things. Diamonds, yes, on there. Right. That's the. One of the strongest, strongest versions. Yeah. There's Delta 8, Delta 9.

So now on those boxes it says that it's a legal product per the 2018 farm Bill. Yeah, that's right. So I think it's unclear to people here in Hawaii is it legal? Is that THC? And so what's going on there?

Sure. So to your first question, one of the licenses have gone off and made a bunch of buys from a number of so called dispensaries or smoke shops. About four years ago there was about 10 visible locations on Oahu that you could buy these products.

She now has a list of over 40 different locations here on Oahu that sell these products. She's taken these products and taken them to Spectra, which is the local cannabis testing lab. And they have data now that has higher levels of THC, Delta 9 or even Delta 8 than what is written on the label.

All that information has been put together in a lovely little package. It's been sent to the Attorney General's Office actually. And I think attorney Lopez has this information and so they're looking into it. But THC and hemp in General is not a priority for law enforcement.

When speaking to the NED, they're looking at methamphetamines and ice and fentanyl. Going after a hemp store that's selling, like you said, gray market or loopholed hemp products requires you to test the product, requires you to find the source of that cannabinoid.

So what has happened with the hemp Bill is that it legalized hemp, which has supposed to 0.3% THC within its hemp plant. But what has happened is that really smart scientists have been able to now concentrate that THC that is extracted from the hemp product.

Not only are they concentrating the THC in these full spectrum oils, but they're also now able to convert CBD and other cannabinoids into thc. So like attorney Goff was mentioning, they're using solvents and acids to try to synthesize THC products out of cbd.

And by saying, hey, it's made from CBD guys, it's made from hemp, it's federally illegal. This is all good then. And if a state doesn't have any rules on it, then that's the law that stands.

The law that stands is that Delta 8, which is slightly less intoxicating than Delta 9, is a legal product because it is produced from CBD that's produced from hemp. That's. And that's how it goes. And so when retailers learn about this, like the stores, they don't really know.

All they have is some guy saying, hey, this is lab tested. I have a lab sheet here, I have the farm Bill here. It's totally legal. They sell it at 7:11. You can sell it too. You're going to make a lot of money. Then the retailer says, sure, why not? I'm going to do it.

And if DOH doesn't show up and seize the product or tell cease and desist, which actually they have, DOH has actually gone and cease and desisted a couple locations. zero, Greg is right there. Yeah, I want to hear from you. He is perfect to answer this Question. But. But there is some movement there.

But it's not the DOH's job that they're there to regulate the Medcan business. They're not here to regulate the hemp.

Those products. Delta 9, Delta 8. If someone vapes it, it seems like a normal.

Not. zero, it's not. It's intoxicating. And that's education. That's what needs. There's no education.

They get stoned from it. Oh, yeah. And so, in essence, I mean, it's. It almost seems like it's recreationally legal here. That's right.

It is recreational legal. But you're not collecting any taxes on it right now. And it's not tested and it's not safe, and you don't know if it's safe or not.

And just to be clear, it's not legal. And I think we need to have this conversation. Maybe Andrew, you can explain what you just said and why this is a gray area. And then I'd like to hear from Randy with Department of Health. Well, Greg can probably explain what the. Okay. If you could introduce yourself and tell us what your job is and help us understand this complex situation.

Yeah. My name is Greg Edwards. That's the easy part. I'm a surveyor with the Office of Medical Cannabis Control and Regulation.

Previously, I was with the department's Food and Drug Branch, which was the Initial Department of Health program that was tasked with issuing the regulations, the rules regarding the sale of manufactured hemp products, as well as the processing of it. So there's a couple things here.

Vapes that allege to be derived from hemp, contain substances from hemp, have always been explicitly illegal for sale. And that's from the initial 2020 law. Act 14 graded the 328G, the statute. So that was always an explicit prohibition.

So when you talk about legality, the Farm Bill is talking about possession and descheduling something from a possession standpoint, from the Controlled Substance Act. And again, I don't want to get ahead of myself because I'm not an attorney and my lane is narrow, but you have to know some of this.

You know the other issues involved, so you can then focus on what your responsibilities are to that point. We're very explicit in the law when we were at help crafting it. And then subsequently, the rules that vape products that again, alleged to be. That are claimed to be derived from hemp have always been prohibited.

So we make very clear about that. It's never like they were once allowed. That's not true. The term legality Then needs to have a deeper conversation. Is it, is that product legal under the hemp for possession under the federal hemp law? Hemp Bill, as it's referred to, that's a conversation for the Feds.

If it's under 3 THC, Delta 98C, then the answer would be yes. But does that mean in Hawaii it's illegal for sale? The answer is no, because the Legislature passed an act which is 328 and there's a clear prohibition on that. So hopefully that clears up that aspect of it.

Yeah, and also on a federal level. So what happened was in 2018, the farm Bill removed it from the Controlled Substances act, so it's no longer a crime to possess hemp. However, the FDA still retains authority over products.

And the FDA has been very clear that hemp, specifically cannabinoids and CBD and THC cannot be included in food, in drugs or in food or in cosmetics or in supplements. And if it's a drug, they do have several approved FDA approved drugs. Epidiolex is the famous one that is concentrated CBD used to treat seizures.

And there's a couple synthetic THC ones, Marinol and the like. But the FDA is very clear that you cannot have hemp derived cannabinoids in food or in supplements. So federally it's not legal. And on the state level, from the very beginning, hemp flour is not legal to sell to consumers.

So smokable hemp flour, hemp pre-rolls not legal at all. Doesn't matter any kind of THC content. It is considered Cannabis vapes are administratively illegal under 328G. That's in the statute. Edibles were not legal. They just got in 2023 Act 263 allowed DOH to approve edibles in rules.

And DOH did just come out with rules for low-THC gummies and no-THC drinks. So those are the only products that really are legal in Hawaii.

So how would the Bill that we proposed, and I know you've taken a look at it, how would it help to address this issue that Representative Garcia brings up, which is a really serious concern to many legislators? How would this measure help address this issue?

Right. So essentially the idea is you need or USDA license to cultivate hemp, just like you do now. You need a license from the state to process hemp into a product and then you can sell a product that we would consider not dangerous, a CBD product with no THC or low-THC.

We can set all of those standards by rules and they are flexible. So that they can change over time. And you also have a list of restricted cannabinoids and restricted cannabinoid products.

So you can say Delta 8 THC vape is okay, you can sell it 5 milligram of Delta 8 THC in a vape, but you need a permit to do that. You can say no, you can't sell any THC THC vapes. And then the conversation is you go and inspect the store.

If they're selling anything with Delta 8 THC and they need a permit, they don't have a permit, you can take it. If it's not allowed, then you can take it. So the seizure aspect is a lot more streamlined. DoH does currently have authority and enforcement authority over hemp derived products. It's only embargo.

So they can only tell a company to hold it in place while they figure out what to do with it. And then they have, you know, fines and they can order, cease and desist and the like. But we are trying to collaborate on a more global enforcement that includes law enforcement and my office and doh.

But like I said at the outset here, if everything was under one house and it's funded and resources, that's really the issue. There are no resources to do this kind of enforcement action. It takes a lot of manpower to do.

Can I jump in here real quick? I know we're getting close on time. I just wanted to reiterate that I do think that this is kind of going back to the conversation around a one-plant conversation, that this is partially a result of us having a two-plant conversation or a multi-plant conversation.

The fact that we're able to have these sort of sellable cannabinoids in these places that are not regulated through a dispensary is because we have had a not a straightforward conversation about all of the aspects of this plant. Right.

So I do think that this Bill will help us lead to a place where, as you said, we're going to have safe regulated products that then the state and the agency can really do the work of educating the public about how these are safe alternatives to other things that they may find at 711 or elsewhere.

And I think like this is current State of things like in the southern states where they don't have legal cannabis but they're flooded with Delta 8 vapes all over the place. Like you think this is confusing for those of us who are in the policy world or live in the cannabis industry.

It's super confusing and most voters do not understand the difference. And if they see it available on a shelf anywhere, they assume it's legal. Right. They're not going to do all that mental homework of whether the person had a license or not.

So it's incumbent upon the state to make sure that we are providing safe alternatives to folks and doing the education and letting them know going through these dispensary channels is the safest way to get access to the product, whether it's for medicinal or adult use purposes.

Thanks.

Just one point to represent to your point. Go ahead. There are states all over this country that are trying to figure out Delta 8 who have already legalized cannabis and they don't have the packaging regulations, they don't have the warning label regulations, they don't have many of the public health regulations in place that cannabis does.

And so while people have legalize Delta 9, which is what everyone knows is the THC piece Of this, the Delta 8 has really gotten them. Because I know up in our area people had gummies in gas stations and they were like, what is this?

My 13 year old went into the gas station and they're not age gated, so no one's looking at your ID and they're not packaged to say this is going to make you intoxicated. And that to the point of increased data.

Your ER visits are probably larger because of that, not because of cannabis, but because of the unregulated delta 8. Yeah. Which makes it very confusing because if you have news reports in the newspaper saying an increase in, you know, ER visits for underage children, okay, what are they taking and where did it come from?

Colorful packaging.

Yeah. The PopTart, the Dorito, like the things that aren't coming from the state.

We only have a few minutes left. And I want to come back to an issue that a number of legislators have highlighted as one of their core, most critical concerns is that if we legalize adult use of cannabis, we'll see an increase in use by those under 21. I know you had brought this up.

Ms. O'Keefe, about the data. Could you reiterate some of the information that you have about that in other states and help us understand, because we hear from those, some, some advocates who are opposing this saying that you will see a significant increase in use of cannabis by those under 21. What have you found out?

Certainly, and I believe I have two handouts. One is my written testimony and the other is solely on this issue. So what it does is for every single legalization state that has before and after data, we take the biggest survey that was done in the state for teenagers immediately prior to legalization.

And then every year up until the most recent year. And in 19 out of the 21 states, we've seen a decrease. The only two we didn't have a decrease the before year was 2021, which was during COVID when nationally everybody was at home and there was a drop, very significant drop in cannabis use among teens everywhere.

So, you know, other than those two before, where the before year was 2021, every single state has seen a drop. So, for example, Washington state is one of the two oldest states. In 2010, 9.5% of 8th graders had used Marijuana. In the last 30 days, it was down to 3.7.

That's about a third of what it was before legalization. 10th graders, it was 20%. In 2010, it was down to 8.4%, more than a 50% drop. 12th graders, it was 26.3% pre legalization, 16.3% post in 2023, that's a 10.0 drop. The other oldest state is Colorado pre legalization. 2011, it was 22%.

2023, it was down to 12.8%. So we can't conclude causation, but it was a pretty remarkable drop in every state we've absorbed.

Inconsistent across the board.

Yeah. Okay. If I could ask all of you to share with us your, if you haven't already done so, share with us your presentation so we can provide that to the other Members.

Exactly.

I want to express the appreciation of the Committee, unless there's any final questions from anybody, I want to express the appreciation of Committee to each of you for presenting. This is a very complex matter. We want to address this in, you know, very deliberative process here at the Legislature and base it on facts.

And, and I think that's what you have helped us with, is what are the facts? And if you could provide us with your presentations, we will distribute that. Thank you very much for your presentations and participation. Kaliko, thanks. Even with the. The feeling under the weather, you participated.

We appreciate that and we look forward to learning more as we go through. Next Tuesday, we'll have a hearing on our Bill, House Bill 1246, and we'll have a more robust discussion about the actual elements of the Bill. And again, thank you very much for being here today.

If there's any final comments from anybody, otherwise I will to say there's no further business before the Judiciary and Hawaiian Affairs Committee today, so we are adjourned.