STAND. COM. REP. NO. 2856

Honolulu, Hawaii

RE: S.B. No. 2461

S.D. 2

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Second State Legislature

Regular Session of 2024

State of Hawaii

Sir:

Your Committees on Commerce and Consumer Protection and Judiciary, to which was referred S.B. No. 2461, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO MEDICAL CANNABIS,"

beg leave to report as follows:

The purpose and intent of this measure is to:

(1) Amend the circumstances under which medical cannabis may be transported by and between dispensaries; and

(2) Require the Department of Health to adopt rules no later than nine months after a medical cannabis product is permitted to be manufactured and distributed by dispensaries.

Your Committees received testimony in support of this measure from the Hawaii Cannabis Industry Association, Cure Oahu, Pono Life Maui, and Hawaiian Ethos.

Your Committees received testimony in opposition to this measure from the Department of Health.

Your Committees received comments on this measure from Akamai Cannabis Consulting.

Your Committees find that the practice of wholesaling, which means the act of buying a large number of goods directly from a manufacturer or producer, storing them, and preparing them for sale in smaller quantities to retailers, is a well-established business practice that provides cost savings through bulk purchasing and economies of scale and streamlined inventory management that can help stabilize supply chains. Your Committees also find that for medical cannabis, under existing law, wholesale only occurs upon request by a dispensary who can show an emergency or proof of need, with the Department of Health having no specific timeline to respond and complete discretion to reject any request. This limited wholesale approach has impaired dispensaries' abilities to efficiently plan their business operations and has led to the disruption in supply of medical cannabis to many patients in need. Therefore, this measure amends the medical cannabis dispensary system law in Hawaii to clarify that any medical cannabis dispensary may purchase cannabis and manufactured cannabis products directly from another dispensary as a matter of course, without the need to demonstrate a need for the purchase.

Your Committees have amended this measure by:

(1) Inserting an effective date of July 1, 2040, to encourage further discussion; and

(2) Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

As affirmed by the records of votes of the members of your Committees on Commerce and Consumer Protection and Judiciary that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 2461, S.D. 1, as amended herein, and recommend that it pass Third Reading in the form attached hereto as S.B. No. 2461, S.D. 2.

Respectfully submitted on behalf of the members of the Committees on Commerce and Consumer Protection and Judiciary,

________________________________ KARL RHOADS, Chair

________________________________ JARRETT KEOHOKALOLE, Chair