Hawaii’s Health Department confirmed Wednesday that it will miss the deadline for awarding licenses to the state’s first eight medical marijuana dispensary contractors.
The Department of Health said in its response to inquiries from the Honolulu Star-Advertiser that it is still reviewing the criminal history records of dispensary applicants, who were notified a week before Friday’s deadline to submit fingerprints and consent to background checks. The DOH said it will “push hard” to announce the winning applicants on April 29.
“Changing course at this late date, only two days before the statutory deadline, will seriously undermine the legitimacy of the process, the reputation of the Department of Health, and the economic viability of many dispensary applicants,” said Chris Garth, executive director of the Hawaii Dispensary Alliance, a nonprofit established to promote the legal cannabis industry. “DOH must meet this new deadline to regain any last shred of trust from the industry regarding its ability to administer an open and fair medical marijuana program in the future.”
Two problems led to the delay. The department said Friday that one of five selection panel members, John Fisher III, a pharmacologist and toxicologist from Alabama, was “unable to fully participate” and would not be included in the process. In addition, the DOH said it “encountered delays related to the required fingerprinting and background checks of the applicants.” The DOH told applicants the night of April 7 to submit fingerprints to the state by Tuesday.
Most of the applicants submitted the additional information by Tuesday, but a small number are traveling abroad and could not respond in time, said Peggy Leong, supervisor for the DOH Medical Marijuana Dispensary Licensing Program.
“It also came to our attention that many business entities, such as limited liability corporations, corporations and trusts failed to submit the consents and fingerprints of the individuals involved in the entities,” she said. “Given the situation, and in order to provide all applicants a fair opportunity to comply with the statutory requirements, we may not be able to obtain and review the remaining information until the last week of April.”
In addition to the applicant, every named owner, principal and member of the applying entity must also submit their fingerprints and consent to a background check. The department has instructed applicants to submit that information by April 25.
“We will be pushing hard to complete our review and announce the licensees by Friday, April 29,” said Dr. Virginia Pressler, DOH director. “While we regret the delay, we believe the priority is to do this the right way, and that includes being fair to the applicants by providing this additional time.”
Local food manufacturer Mike Irish, head of applicant Hawaiian Isles Marijuana LLC, said the delay could risk deals for some of the dispensary candidates.
“Any time you have a delay, it doesn’t help the situation. Depending on the people that have things on hold, that might be jeopardizing some of them or costing them money,” he said. “It’s like anything else in business. If you have a deadline, you’re supposed to meet the deadline.”
Peter Carlisle — former mayor, an attorney and an investor in The Wellness Group medical marijuana applicant — said: “The real question is, ‘Is it going to interfere with basically having the production centers and dispensaries up and running by the due date in the summer?’”
Hawaii legalized medical marijuana in 2000 but did not provide a way for patients to obtain the drug. Act 241, adopted last year, authorizes the DOH to issue eight licenses to sell medical cannabis — three on Oahu, two each on Hawaii island and Maui, and one on Kauai. Each licensee will be allowed to open up to two production centers and two retail centers for a total of 16 dispensaries statewide. The dispensaries are allowed to open as early as July 15.
“At the end of the day, administrative delays and last-minute requests from the state put pressure on would-be dispensary operators to meet shifting deadlines. When that happens, mistakes can occur and patients suffer,” said Pat Loo, president of United Food & Commercial Workers, Local 480, which represents more than 2,000 retail and grocery workers in Hawaii and represents cannabis workers on the mainland. “Patients, applicants, policymakers and the public all deserve better. A delay in the award can have a potentially cascading effect — eroding public confidence in the program, jeopardizing funding and delaying the launch of dispensary operations.”
