Hawaii Cannabis Startup Guide

Starting a cannabis company in Hawaii? We’ve put together a state-specific guide covering everything from available license types to fees, regulations, and what you should include in a Hawaii cannabis business plan. Jump to a section by clicking below, or go straight to our sample cannabis business plan.

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Overview
Cannabis license types
Fees and other barriers to entry
Are cannabis business plans required in Hawaii?
What to include in a business plan
How to research city regulations
Helpful links
Get expert help

Overview of legal cannabis in Hawaii


Since SB 862 and HB 321 passed, Hawaii adults can possess up to 4 ounces of usable cannabis, as well as grow marijuana at home, if they have a certification from a doctor. There are no restrictions on types of marijuana that can be sold, and home cultivation is allowed. Over 31,000 patients have registered for medical marijuana use. Hawaii’s medical marijuana sales via dispensaries could be as high as $54 million in 2021.

Cannabis business license types

Hawaii issues licenses for two broad categories of cannabis businesses: vertically integrated producers/dispensaries, and testing labs.

Producer/dispensary: These businesses grow cannabis plants indoors (outdoor cultivation is not allowed in Hawaii), then sell it to patients at a retail storefront. Hawaii allows those with a cannabis business license to open two cultivation facilities and two dispensaries. You have to follow the state’s strict rules for seed-to-sale tracking, security, record-keeping, advertising, and more. Currently, all available cannabis business licenses have been granted.

Testing lab: Consumers and regulators alike demand consistency and quality control in cannabis products, which creates demand for marijuana testing labs. These labs use methods like liquid or gas chromatography to analyze products for CBD and THC content, pesticides, terpenes, bacteria, fungi, and heavy metals, to name a few.

Ancillary business: If you don’t want to grow or sell cannabis in Hawaii, there are plenty of other ways to be part of the booming cannabis industry. You can create a marijuana app, payment processing service, consulting firm, pest management product, accounting firm, automated plant watering system, security service, packaging labeling service, or legal firm--and that’s just the tip of the iceberg!

Fees and other barriers to entry

Local governments may forbid cannabis companies or certain locations, so check city and island regulations.

Application fees: Applying for a cannabis business license in Hawaii costs $3,000 for a testing lab and $5,000 for a dispensary.

License fees: It’s $75,000 for a new dispensary license in Hawaii, and $50,000 to renew it every year. The annual cost for a testing lab license is $3,000.

Financial requirement: You have to have $1 million or more in working capital in order to get a cannabis business license, and an additional $100,000 per dispensary you’re going to open.

Tracking: Hawaii medical cannabis companies must use BioTrackTHC, a seed-to-sale tracking program.

Do you need a cannabis business plan in Hawaii?

A business plan is not required to get a medical marijuana business license in Hawaii, but it will certainly make the process easier. Your application already has to include a five-page plan for operating a dispensary in your county, as well as your qualifications, some of which naturally overlaps with a business plan. And if you plan on raising funding from investors, you definitely need a business plan.

What to include in your business plan

Here’s what an Hawaii marijuana business plan should include:

  • Product/service description: Will you run an integrated grow operation/dispensary, testing lab, cannabis consulting firm, or something else? What’s unique about your business? Be as specific as you can. If you’ll open a dispensary, which strains of flower will you grow and sell?
  • Market research: If you’re opening a dispensary, how many people live in the area? If you’re creating an app, who will be the user base, and why would they use your app instead of someone else’s? Use concrete numbers verified by a third party whenever possible (instead of estimates).
  • Competitors: Who will you compete with, both directly and indirectly? What do they do well and poorly? What is their online reputation? How will you differentiate your company?
  • Management team: Summarize your qualifications and those of others on your management team. Include experience in the agriculture, horticulture, or cannabis industries, as well as leadership skills, customer service, and business development experience in other industries.
  • Financials: This part can be tricky. You need a five-year financial forecast, including projected annual revenue, operating expenses, costs, and net profit. Each year’s projected revenue should include not only revenue but also your margin and direct costs. You can forecast revenue by estimating how much product you think you’ll sell (based on market potential), your retail price, your production cost, and how much you’ll spend on payroll, rent, and other expenses. Your cash flow statement will show that you’ll have enough cash to stay operational. You might want to include a sensitivity analysis (best- and worst-case scenarios), which shows 15% higher and 15% lower revenue than your initial forecast. For marijuana cultivators, it’s important to do a sensitivity analysis based on future potentialities of the wholesale price per pound. You can also include a break-even analysis, showing which month you will be profitable.
  • Hawaii-specific requirements: If not included elsewhere in your application, you should include details in your business plan about your security system, waste plan, and anything else required by your state.
  • Investor proposal: If you are presenting your plan to investors, how are you valuing the shares? Consult with your attorney to make sure you are within state and federal compliance. Sometimes, you’ll need your attorney to draw up an offering memorandum, often called a private placement memorandum (PPM). A PPM informs potential investors on the details of the investment vehicle (your company) and potential risks associated with the investment.
How to research city regulations

Google your city or island and “cannabis regulations” or “marijuana laws.” If your area doesn’t have information about cannabis, check recent local news coverage or contact your city clerk, city manager, or town hall.

Helpful Links

Get expert help

Confused or overwhelmed yet? That’s normal. With such a highly regulated industry, and one with different rules in every state, starting a cannabis company can be very complex. Get help with your cannabis business plan from Masterplans, the industry leaders. We’ve worked with hundreds of cannabis entrepreneurs like yourself to create investor-ready documents and presentations so you can not only meet regulations but get the funding you need. Click below for your free, confidential consultation:

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