Key Takeaways

• Cannabis law and regulations:
  • In 2000, Hawaii became the 8th state to legalize medical cannabis when Hawaiian Gov. Ben Cayetano signed into law Act 228, allowing medical cannabis cardholders to grow their own cannabis or appoint a caretaker to do so.
  • House Bill 321 was signed into law as Act 241 in 2015, establishing a dispensary system.
  • Hawaii Revised Statutes: HRS 329 (beginning with §329-121 and is specific to the Medical Cannabis Registry) and HRS 329D (Medical Cannabis Dispensary Law).
  • Hawaii Administrative Rules: Chapter 11-160 (Registry Program) and Chapter 11-850 (Medical Cannabis Dispensaries).
• Licenses available:
  • Medical Cannabis Dispensary – allows to operate up to 3 production centers for cultivation, manufacturing, and packaging of cannabis and manufactured cannabis products, and to establish up to 2 retail dispensing locations (the Department of Health may authorize 2 additional retail dispensing location per licensee to serve qualified patients in a rural or underserved geographical area).
  • Testing laboratory.
• Products legal:
  • Edible cannabis products.
  • Ointments and skin lotions.
  • Transdermal patches.
  • Pre-filled and sealed containers used to aerosolize and deliver cannabis orally.
  • Devices that provide safe pulmonary administration.
  • Pre-rolled cannabis flower products.
• Taxes:
  • There is a 4% general sales tax on purchases of medical cannabis and an additional 0.5% surcharge in the City and County of Honolulu, County of Kauai and County of Hawaii which results in the excise tax rate being 4.5% in those counties. There is no special excise or sales tax on medical cannabis in Hawaii.
  • In 2016, Hawaii approved laws that exempt businesses from Section 280E of the federal tax code.
• Market:
  • According to data from the Department of Health, there were 29,399 registered patients as of June 2025 – down by 5% from the 30,957 patients last year.
  • As of September 2024, there were 8 licensed medical dispensaries (3 on Oahu, 2 on the Big Island of Hawaii, 2 on Maui and 1 on Kauai) operating 25 retail locations and 13 production centers in total, as well as one certified testing laboratory.
  • In 2023, $64.7 million worth of medical cannabis was sold in Hawaii. According to an MJBiz Factbook projection, cannabis sales in Hawaii could reach $73 million in 2025.

Hawaii Cannabis Legalization

In 2000, Hawaii became the 8th state to legalize medical cannabis when Hawaiian governor Ben Cayetano signed into law Act 228, allowing medical cannabis cardholders to grow their own cannabis or appoint a caretaker to do so.

To address legal acquisition of cannabis, House Bill 321 was signed into law as Act 241 in 2015, establishing a dispensary system. It permits the state to issue 8 dispensary licenses statewide, designated by island. Each licensee is allowed to operate a maximum of 2 retails locations and 3 production centers for cultivation, manufacturing and packaging of medical cannabis products. To be able to purchase medical cannabis from dispensaries, patients have to obtain a 329 Registration Card (a medical cannabis registration card).

In August 2017, the first legal medical cannabis dispensary sale was made in Maui.

Senate Bill 3335 was introduced in January 2024. It aimed to legalize recreational cannabis and establish taxes on the retail sale of recreational and medical cannabis. The bill was approved by Hawaii’s Senate, but the House Finance Chair declined to hold a vote on it and the bill died in committee.

In October 2024, the Hawaii Office of Medical Cannabis Control and Regulation put out a request for proposals, asking for input from existing vendors to assess the Medicinal Cannabis Dispensary Licensing framework and analyze the demand for both medical and adult-use cannabis in Hawaii if the state legalizes adult-use cannabis.

On June 27, 2025, Gov. Josh Green signed House Bill 302 into law. The bill introduces the following changes to the state’s medical cannabis program:

• Allows medical professionals to recommend MMJ via telehealth.
• Allows both physicians and “advanced practice registered nurses” to recommend cannabis for any condition where “the benefit of the medical use of cannabis would likely outweigh the health risks.”

What Types of Cannabis Products are Available in Hawaii

Cannabis. A dispensary licensee may dispense cannabis only in the form of dried matured processed flowers of female cannabis plants.

Manufactured cannabis products. A dispensary licensee may manufacture cannabis products limited to:

• Edible cannabis products.
• Ointments and skin lotions.
• Transdermal patches.
• Pre-filled and sealed containers used to aerosolize and deliver cannabis orally, such as with an inhaler or nebulizer; provided that the containers need not be manufactured by the licensed dispensary but shall be filled only with cannabis, cannabis oils, or cannabis extracts manufactured by a dispensary licensee; shall not contain nicotine, hemp, hemp-derived cannabinoids, tobacco-related products or any non-cannabis derived products; and shall be designed to be used with devices used to provide safe pulmonary administration of manufactured cannabis products.
• Devices that provide safe pulmonary administration; provided that the heating element of the device, if any, is made of inert materials such as glass, ceramic, or stainless steel, and not of plastic or rubber; the device is distributed solely for use with single-use, pre-filled, tamper-resistant, sealed containers that do not contain nicotine, other tobacco products, hemp, or hemp-derived cannabinoids; the device is used to aerosolize and deliver cannabis by inhalation, such as an inhaler, medical-grade nebulizer, or other similar medical grade volatilization device; there is a temperature control on the device that is regulated to prevent the combustion of cannabis oil; and the device need not be manufactured by the licensed dispensary.
• Pre-rolled cannabis flower products.

Pre-rolled cannabis flower products shall consist only of dried processed cannabis flowers rolled in paper and may include a paper filter.

Edible cannabis products. Allowable edible cannabis products are limited to the following types: Capsules; Lozenges; Pills; Infused oils and butters; provided that oils and butters shall not contain garlic or peppers; Oil extracts and concentrates; Tinctures; Gummies; Hard molded confections made primarily from sugar or syrup; Chocolates; Cookies; Brownies; Honey; Beverages; Powdered beverage mixes or beverage additives; and Syrup beverage mixes or beverage additives.

Cannabis Licenses in Hawaii

Each Medical Cannabis Dispensary licensee is allowed to operate up to three production centers for cultivation, manufacturing, and packaging of cannabis and manufactured cannabis products. Each licensee is also allowed to establish up to two retail dispensing locations and the Department of Health may authorize two additional retail dispensing location per licensee to serve qualified patients in a rural or underserved geographical area. Retail dispensing locations may not be co-located with production centers, and each production center may not hold more than 7,500 plants. Licensees are capped at 15,000 cannabis plants in total across all of their production centers. The law requires dispensary facilities to be “enclosed indoor facilities, and that the interior not be visible from outside”.

Dispensaries are allowed to sell varying medical cannabis products including flower, concentrates, tinctures, vape cartridges and lozenges. Edibles were passed by the Department of Health in early 2021 and the new rules went into effect on February 24, 2022, to expand medical cannabis dispensaries’ product offerings with the addition of popular edibles such as gummies and brownies.

The Department of Health also issues licenses to testing laboratories to test of cannabis and cannabis products for contamination, consistency and content before they can be sold by dispensaries.

Cannabis Delivery in Hawaii

Delivery of medical cannabis or ordering medical cannabis online in Hawaii is not allowed.

Hawaii Cannabis Taxes

There is a 4% general sales tax on purchases of medical cannabis and an additional 0.5% surcharge in the City and County of Honolulu, County of Kauai and County of Hawaii which results in the excise tax rate being 4.5% in those counties. There is no special excise or sales tax on medical cannabis in Hawaii.

In 2016, Hawaii approved laws that exempt, or “decouple”, businesses from Section 280E of the federal tax code.

280E Deductions

Cannabis Advertising Regulations in Hawaii

“A dispensary cannot advertise, but can maintain a website with contact information and the location of its retail dispensing locations, as well as the same information about the products it sells that is found on the labels of the products. All other advertising is prohibited.”

Hawaii Cannabis Market Stats

According to data from the Department of Health, there were 29,399 registered patients as of June 2025 – down by 5% from the 30,957 patients last year. 8 licensed medical dispensaries (3 on Oahu, 2 on the Big Island of Hawaii, 2 on Maui and 1 on Kauai) operated 25 retail locations and 13 production centers in total, as of September 2024. At that date, there was only one certified testing laboratory in Hawaii.

An analysis commissioned by the Hawaii Cannabis Industry Association found that sales have slowed from an annual growth of 110% in 2019 to 68% in 2020 to only 12% in 2021.

State of Hawaii estimates of revenues were around $44 million in 2020 and around $50 million in 2021. The size of the cannabis market in Hawaii in 2021 was estimated at $240 million, 79% of which comes from illegal sales.

Hawaii medical cannabis sales were dominated by usable products, more than half (53.9%) during 2021. At the same time, vaping extracts (35.4%) also enjoyed substantive popularity. Various edibles (5.8%) were not unpopular.

Sales declined 5% in 2022 and then recovered to approximately $64.7 million in 2023. According to an MJBiz Factbook projection, cannabis sales in Hawaii could reach $73 million in 2025. An analysis carried out by the Hawai’i Cannabis Industry Association in February 2023 found that adult-use legalization in the state could create around 3,375 new jobs and bring in nearly $82 million in annual tax revenue.

Hawaii Cannabis Market Infographics

How Can Cannabusinessplans Templates Help Start or Grow Your Cannabis Business?

The majority of cannabis licensing programs require the submission of a business plan as part of the application for a cannabis license. Even if it is not mandated by law, a business plan is essential for securing funding and assisting an applicant in understanding how much money it will take to start a cannabis business and how much profit it could make.

A well-structured business plan can make all the difference in helping you demonstrate your proposed cannabis business’ compliance with regulations and its operational viability.

Our complete cannabis business plan template package is everything you need to create a professional business plan for a cannabis business with expert financials and projections. A complete cannabis business plan template package includes:

• Excel Financial Model: change variables and immediately see the impact, break down operational and capital costs, know how much it will take to get into the business and the potential profits.
• Word Business Plan: value proposition, market analysis, marketing strategy, operating plan, organizational structure, financial plan and more.
• PowerPoint Pitch Deck: provide a quick overview of your cannabis business plan.
• Unlimited support!

Cannabis and Hemp CBD Testing Laboratory Business Plan Sample, Hawaii

Hawaii Hemp Industry