 and welcome to Connecting Hawaii Business on ThinkTech Hawaii. My name is Kathleen Lee, owner of Kathleen Lee Consulting, and I am your host for this program. ThinkTech Hawaii is live streamed on ThinkTechHawaii.com as well as on ThinkTech Hawaii's Facebook and YouTube pages. And for all the viewers out there today, you may send us questions since it is live streamed by emailing them to questions at ThinkTechHawaii.com. For today, I am excited to welcome the executive director of HICIA, which is the Hawaii Cannabis Industry Association, Randy Gon. Hey, Randy, thank you for being on the show today. Aloha. Thank you so much for inviting me on. I was excited to talk to you today. Of course. So tell us, tell our viewers about yourself and your background, just to start us off. Sure. I've been in Hawaii for a little over 10 years, and I've kind of done a myriad of different positions in Hawaii professionally. I started out working at the legislature when I was going to grad school, and actually my undergrad as well at HPU. I got my graduate degree in sustainability. And then I started working as a legislative aide drafting legislation for Representative Matt Lopresti out Neva Beach. I did that for a few sessions, and then I ended up working in the governor's office for a year. It was attached to the governor's coordinator on homelessness office. And then I transitioned into this position, which is now the executive director of the HICIA. And it came about an interesting way. I had always been an advocate, an activist for social justice or other causes, drug reform, things like that. I sit on the board of the drug policy form of Hawaii, which is Hawaii's longest standing drug kind of a compassionate drug law for change organization. And this was a really timely position and move for me. And I'm really happy to be on that forefront of change here in Hawaii. That's wonderful. Thank you for giving us a brief summary of your background, which it really goes towards, you know, the line of advocacy. So as the executive director of HICIA, Randy, what do you do? What does the organization do? Well, it's a great question. What don't I do, I think is a better question. I'm the only employee at HICIA, but my board of directors are the licensed cannabis dispensary owners in of Hawaii. So back in 2015, we passed the medical cannabis dispensary legislation and did a bidding process and awarded eight licensees, the opportunity to serve patients in Hawaii for clean regulated cannabis in Hawaii. And they formed this organization to kind of help them, you know, advocate, educate and kind of build an industry on their behalf. And I was, I believe, like the fourth director that they've had. And I started right around April of 2021. Or excuse me, 2022, but before the pandemic. So yeah, it's been interesting ride. I started right when the pandemic started. So it was interesting to kind of like having to meet my board members virtually. So it's a relatively new organization is what I'm hearing. Is that correct? Correct. Yeah, relatively new, but needing to fill a need, a big puka that has existed for a long time. In the cannabis space, there has been a lot of siloed organizations that kind of work in their in their zone. And HICIA really tries to be an umbrella organization. Okay, I think that's awesome. So what is for those who may not be keeping track or even for those who are, what is the status of legalization of cannabis in Hawaii currently? Sure. So currently, we only have a medical cannabis program in the state. So that means in order to consume cannabis, especially from the dispensary system, legally, you have to get a 329 card. And that's a reference to the law, why you revive statutes 329. You register through the Department of Health, you go see a service provider or a registering physician or APRN who can issue you a essentially a prescription to use medical cannabis. And then once you get your card, they do it electronically now, they used to send it the mail, but you can just do it electronically, you can go to the dispensary and they check card and check your ID and then you can purchase your medicine there. Currently, we don't have a recreational or adult use program. We did decriminalize three grams of cannabis or less, but that still comes with a like a fine, kind of like a traffic ticket, essentially. But we are seeing a lot of conversations around legalization or what we would like to call adult use or recreational use cannabis in the state. And I would say that we are closer than ever before to seeing a really serious conversation and legislative package to go forward with legalization in Hawaii. We don't have a what they call a referendum, like other states like California and Oregon and Washington, how they passed their legalization where they can have the members of the public vote on a referendum. It has to be passed to be our legislative system. So our elected officials have to put together a package and then pass it to the legislature. So we're waiting on that. It's a few years away. Okay, so let's go off of that. So when you mentioned your background and what you're passionate about, which is an advocate for social justice, could you go over or make the connection between legalization of cannabis and social justice? How are the two connected? It's interesting because I could go on a really long-winded answer here, but I'll try to keep this short as possible. As we know, a lot of information has come out in the past decade or two about the impact on the war on drugs has had in our society, not only in our state, not only in our nation, but around the world. And that has just far implications into different parts of our lives. We've seen minority communities be unfairly targeted. We have seen low level possession put people in jail for a very long time and really prevent them from being successful community members. So really, it's a social justice and economic justice and environmental justice issue. It's really an all-encompassing issue when you think about how we've kind of made a plant that grows pretty proliferately in the world to make it illegal and really locked people up just for possessing. And what we're seeing right now around the nation is a really move away from the criminalization of possession. So a lot of nonviolent drug offenders have been in states that have legalized are getting released from prison and having their records expunged, which I think is a great thing. And we will welcome that when it comes to Hawaii. And thank you for bringing that up as well. And what is the status of the dispensaries in Hawaii currently? Sure. We are kind of exiting what I call the infancy stage of an industry. Again, the law that was crafted for the dispensaries to be up and running was in 2015, but we've had medical cannabis in Hawaii since the year 2000. So we've been here for a long time. We were actually the first state in the nation to pass it via the legislature a medical cannabis program, but it took us 15 years to have the state to license and sanction a place to purchase your medicine and a clean tested regulated version of that. So as it currently stands, we're roughly coming out of our fifth year of operations essentially. Licenses were able to kind of get up and get going, but the first sale didn't start till about 2017. And it takes a while to stand up a business in the current regulated market. In my opinion, it's one of the most heavily regulated and difficult industries to operate in. So currently, we are seeing all dispensaries are still around and still operating, but they are having a difficult time really navigating the heavy regulated regulated industry we have. And that's not only specific to Hawaii. That's also nationwide. I don't think any industry or any licensee currently has turned a profit yet, given the way that we are structured. We're what we call a vertically integrated model in Hawaii where each licensee has to do everything from seed to sale. They have to manufacture, they have to package, they have to grow, they have to have their own facility, they have to have their own retail. So you can't outsource any of those operations, things like that. So capital investment just to get started is this humongous. And we're seeing that around the nation again. This is happening because there's so many different layers to this industry, one being it's federally still not recognized as a legal option for medicine. So there are restrictions like a normal business to get started can write off employee costs, costs for a new vehicle, things like that. In the cannabis industry, you cannot write off anything for a section of the tax code called 280 E. And so effectively after you add in the taxes that are in Hawaii, we have GT that we operate under and what we can't write off our effective tax rate can get up close to 70% in the cannabis industry. And when you think about the capital investment to get started, I would throw a ballpark operation range for licensees in Hawaii probably upwards of 10 million to just to open their doors. How much medicine at a certain price range do you have to sell just to make back initial investment, not even to keep your lights on and it's a pretty high cost. So we are currently seeing higher quote unquote, higher prices that you would in the kind of what we call the illicit market or the market that is exist in Hawaii for your cannabis needs for a very, very long time, uncle down the road who grows or someone who has a larger grow operation, but it has doesn't have a license. They have lower overhead costs and don't have to really abide by the same rules that the cannabis dispensaries do. So it's a really tough game out there, especially when your competitors are, you know, have 50 years of an established relationships in Hawaii. And it's not to say that those individuals are somehow bad. We think that, you know, what Hawaii should do is is create a regulatory environment, create a program that brings the individuals who have operated in the quote unquote, illicit market into the light, allow them to operate in a regulated space where they don't have to worry about law enforcement coming to their homes. They don't have to worry about, you know, if their operation is going to get shut down, things of that nature. So it's a tough industry right now, in my opinion, again, one of the toughest, not only in the nation, but specifically in the state given the heavy regulations we have. Well, based on that, it looks like we have a couple of questions, but we are about to go and break in the next couple of minutes. But if you're able to answer this one question before we go, someone asked, can I smoke in public if I have a prescription or a card? Currently, no, you cannot. Only to take your medicine is authorized in a private setting. So, you know, we recommend to do it at your home or somewhere safe where you know can administer your medicine and not cause a disturbance, I guess, per se. They still can cite you for having cannabis out in public. Okay. Thank you, Randy, for clarifying that and for answering that question. We are going to go on break, but when we return, we'll address a few more questions and learn more about the cannabis industry in Hawaii from Randy Goss. Stay tuned. The state of clean energy on Think Tech Hawaii. Hawaii, the state of clean energy is about following the many clean energy initiatives in Hawaii. Hawaii, the state of clean energy appears weekly on Think Tech Hawaii at 4pm on Wednesday. Thank you so much for watching our show. We'll see you then. Aloha. Welcome back to Connecting Hawaii Business on Think Tech Hawaii. My name is Kathleen Lee and today's guest is Randy Goss, Executive Director of HICIA, which is the Hawaii Cannabis Industry Association. So, when we left off, we had a question from a viewer that Randy answered, which was whether or not folks could smoke in public and the answer is no currently. And another question that came up was what is the advantage for legalization of marijuana? Sure. I think we could do an entire television show or more on the advantages of legalization of Hawaii in Hawaii or around the nation in general. Let's try to fit in like. Sure. The Randy summary, right? Yeah, like if I'm tuning in and someone said, well, why, why shouldn't we legalize it? Like, what would you say as someone who is spearheading an organization that is advocating for this? Sure. I'll start off by kind of talking a little bit about my personal story with cannabis. I served in the United States Air Force for six years during the height of both Iraq and Afghanistan wars. And when I came home, you know, I was dealing with a lot of, you know, post-war issues that a lot of our troops do. And I was able to turn to plant medicine to really help me treat those ailments, you know, become a more grounded person and really stay away from some of the pharmaceuticals that had really long-term effects and didn't work with other pharmaceutical drugs that they had prescribed. And living in a place like Hawaii that has such a deep history with plant medicine, legalizing this provides more access to those who want to have therapeutic medicinal practices in their life. And, you know, there's going to be plenty of provisions to make sure just like any other intoxicant that it stays out of the hands of children and those who should not have, but for those who are responsible and can make informed choices about their health, legalizing cannabis will provide an amazing access to an amazing plant with, you know, tons of new research on the health benefits, not only the psychoactive effects, but all the other cannabinoids that interact with your endocannabinoid system, which is a system like our nervous system that our body has, that it's kind of a newer area of research that we're going into, you know, it's showing great, great effects for depression, anxiety, hypervigilance. In some cases, like the CBG cannabinoid, there's just a study released about its effects on cancer. So, you know, legalization not only is going to provide access, but it's going to open up new avenues for study. So currently a lot of places can't study cannabis because it is legal. Once we legalize, we can see a hub in Hawaii. We really think that Hawaii could be a hub for research with UH, having been doing tons of research and CTAR at UH agricultural school and things like that, so that the potential there is huge. And then, again, what we were talking before, to repair the harm on the war on drugs is keeping our children out of jail for possession. And those that do have drug issues, seek treatment. And that's another part of this, is that when we are able to earn some revenue from the state, things like that, that'll go directly into treatment programs and able to get people help. And we see that disparity in communities, more affluent communities. Normally those children in the affluent communities don't go to prison. They go to rehab. And those in the harder socioeconomic communities go to jail and they don't get rehab. So legalization effects are huge benefits for our society. And I really, again, welcome when that comes to Hawaii. Let's go into that because there is a question that is connected to legalization. And the question is, does it matter that the federal government still views marijuana as an illegal narcotic? This is a debate in the community currently. Some would say yes and some would say no. I personally say yes. It always matters what the federal government thinks about how we live our lives and how they continue to craft policies around what we do and our personal choices. So for example, one of the biggest problems in the cannabis community right now is banking. We don't really have a surefire way to bank. And we can't get loans like normal businesses can. And it's really been a cash business for a very long time, which presents a lot of difficulties. So once the federal legalization happens, or federal kind of understanding that they're going to deschedule it, but still have regulations on a substance, rightfully so, we can see normal banking happening, which will really reduce risk in our industry, put us on par with other businesses and really open up a growth mechanism for operating and, again, becoming more safe. Cash businesses in general is just a difficult environment to work in. So yeah, it absolutely matters how the federal government sees cannabis, although they have taken a softer stance in the past decade or so. Once they turn that tune, we're going to see a lot more opportunities in this industry. And going back to what we can do for Hawaii in this industry is we'll see a lot of local people stay. This is going to be an industry that's going to be for local people, and it's not going to be an extractive model where a lot of the profits are taken off island. We're going to see opportunities here for young researchers who want to get into hemp, who want to get into cannabis, who want to get into the health benefits, not only selling, though, it's going to be a great industry once it really takes off. Well, I appreciate you pointing that out. And you've mentioned it a couple of times, that it is currently a daunting industry to be in. How has the global pandemic affected the cannabis industry, with its already currently existing challenges? Sure. We were very fortunate enough to be designated an essential service, an essential business during the pandemic. So as a medical industry that we're providing medicine to people, we were able to continue to operate during the pandemic. So the one thing that we tried to do as an association, though, was really advocate for best practices when we talk about curbside pickup, even possibly a delivery option, things to reduce contact, because in a medical industry we're working with immunocompromised individuals, individuals who are getting their medical cards tend to have a, or they all have a medical condition that they are using cannabis for. So if we're asking them to travel out during the middle of a pandemic and go grab their medicine and come home, that increases their risk to catching COVID or something of that nature. Unfortunately, the state didn't grant any of those requests. So we had to operate as normal and still bring people in. And again, as a heavily regulated industry, we have a waiting area before you go in to purchase your product. So there's a lot of logistics that had to happen for a lot of the licensees to manage people coming into their establishment, how many people can come in, and sanitization, all of the things that come with navigating that. But when it comes down to numbers, Hawaii actually did decently well during the pandemic when it came to sales and things of that nature. But one of the things I like to highlight is that we saw as an opportunity to really connect with the community. So some of our manufacturing practices really was easily transferable to kind of, for example, making hand sanitizer. So one of our local dispensaries on Oahu ramped up production to make hand sanitizer for first responders and others. And really we saw how crucial an industry like this could be during a time of a pandemic. And the more good will that we have the ability to gain the better, and they will see that we're not just an illicit market coming into the legal framework, we're a community member, and we're here to kind of uplift and help everybody. So the pandemic brought tons of challenges, but it also brought a lot of opportunity. What's that? As someone who is part of the movement that is ushering in legalization of cannabis in order to uplift the state, what are some lessons that you have learned as an advocate and as the executive director of HICIA? Sure. I think one of the biggest ones for me is, again, I was an advocate on the ground on kind of the grassroots level really before I came into this position. And there's a lot of issues I still am on the grassroots level on. But when I'm able to see this issue from a very high level now, working with the Department of Health and the regulators, I really understand the issues more deeply. And a lot of the things that maybe I was a little critical of the industry before, I completely understand now, right? There is this narrative and myth that the current licensees are kind of like a big monopoly that are making handover fist money and are kind of blocking out those who want to get in, which is not the case at all. I mean, no one is really making any money in this industry currently. And that's the hardest part is that we want to see cannabis be accepted in our community and in our lives. And we have to have successful businesses to do that. And again, going back to making sure it's for the local people, for the local growers, really supporting people that have been doing this for a long time in Hawaii. First and foremost, we have to show that it can be successful and we have a successful model. So that's one of the biggest lessons I've learned is that not everything as it seems on the ground and getting the most information possible is super important to understanding the entire climate and how we can all work together. Because Hawaii is a place where, as we know, we're stronger when we're together. And, you know, we don't want to see some of the larger, you know, walmarts or targets of cannabis come in and buy out the entire market and then only produce minimum wage jobs and take a lot of those profits off off islands. We want this to be here for our people to gain generational wealth and to keep our local people on island. I think this has been a very valuable conversation, Randy. And thanks for being here today. If we can pull up the HICIA website for people to make a plan, how can people get a hold of you? If they want to learn more about the cannabis industry in Hawaii, or if they just want to reach out? Sure. So this is a website, it's a great place to visit and to check us out. We have all of our social media links on there where we keep everybody informed. My email address is on this website. It's director at 808-HICIA.org. You can email me directly. And we also are always open for associate members. So anyone who's looking to get in the industry or has an ancillary business that wants to help out the industry, we have associate memberships where you can be a part of the conversation with us and help us build an industry that we want to see for our state. So please reach out and I really look forward to continuing this effort and bring everybody together. Wonderful. Randy, is there anything else that you would like to add in our last two minutes of the show? Just that plant medicine has a large and deep history in Hawaii and we can't pick and choose which ones are more valid. And I think this is a debate that that's already passed that it's just a matter of when not if cannabis will be legalized. So it's time to kind of get together and talk about how it's legalized. Thank you again so much for the valuable information that you have shared today. I appreciate you being on the show and sharing your knowledge and expertise and your passion with our viewers and the community. So mahalo again, Randy. Really appreciate it. And thank you as well to Jay Fidel and the entire staff at Think Tech Hawaii for making programs like this possible. Today we had Michael helping us out. So thank you, Michael, for everything that you do. And catch us again. We are on the show every other Wednesday. This has been Kathleen Lee with Randy Gaunt, HICAA Executive Director and we wish you a good week. Owa ha!