The future of marijuana: Island cannabis industry reps talk hurdles, economic woes

  • Medical marijuana grows at a North Kona site in this undated photo. (West Hawaii Today)

HILO — Half a dozen representatives of the island’s marijuana industry spoke about the future of cannabis at a forum last Wednesday.

The Hawaii Island Chamber of Commerce Medical Cannabis Forum brought business owners together to participate in a panel discussion about medical marijuana on the island.


The forum opened with presentations by the two licensed medical cannabis dispensaries on the Big Island, Hawaiian Ethos — which plans to open its first location in Kona this spring — and Big Island Grown. Representatives of the two businesses discussed how they operate and their facilities before the meat of the event, the panel involving six cannabis representatives.

The participants included Big Island Grown CEO Dylan Shropshire; Hawaiian Ethos’ chief compliance officer Noah Phillips; Michael Covington, chief operating officer of Steep Hill Lab Hawaii; chronic pain specialist Dr. Zain Vally; attorney Newton Chu; and Hawaii County Police Lt. Reed Mahuna.

Over the course of two hours, the six discussed recent developments in the marijuana industry as well as the existing hurdles that the industry must overcome in order to become a viable economic pillar for the state.

A topic that was repeatedly addressed at the forum was the current incompatibility between legal marijuana businesses and federally accredited financial institutions. Because marijuana is still listed as a Schedule I drug by the U.S. Drug Enforcement Administration, federally accredited financial institutions are either unwilling or unable to do business with organizations that handle marijuana, even in states where the substance is legal.

“What it means for us is that we can’t have a bank account,” said Shropshire. “And I don’t know if you’ve ever tried to run a business without a bank account, but it’s extremely cumbersome.”

Covington — whose lab inspects the products of both dispensaries and confirms they conform to standards — said banks “generally don’t care” if employees of a marijuana business want to open a bank account, but the business itself is another matter.

Shropshire and Phillips both declined to discuss the specifics of how their businesses handle their finances, but they confirmed their dispensaries deal in high amounts of cash and are subject to an elevated level of scrutiny by the Internal Revenue Service: Phillips said they are required to submit to an audit every year.

While Shropshire said he expects financial institutions will standardize how to work with marijuana businesses within the next few years, Chu noted that in 2018, then-Attorney General Jeff Sessions rolled back Obama-era directives to minimize marijuana enforcement in states where the drug is legalized. As Sessions’ replacement William Barr has yet to reverse that decision, Chu said the federal administration appears to be falling even further behind the states’ trend toward legalization.

Meanwhile, Vally pointed out that research on cannabinoid products and their influence on patients is still scant. Too much of cannabinoids, he said, are prescribed based on anecdotal evidence and assumptions that what works for one patient will work equally well for another.

“If we’re going to use it as a medication, then we should treat it like a medication and do more testing,” Vally said.

As an example, Vally pointed out the state’s list of conditions that qualify patients to use medical cannabis. The conditions on the list were taken from similar lists in other states, but there has been little to no research as to whether cannabis is an effective treatment for any of them. In fact, one condition, post-traumatic stress disorder, has been observed to be exacerbated by marijuana use, but remains on the list.

While each of the panelists agreed that eventual recreational legalization will ultimately benefit the state, Mapuna pointed out that any change to the industry will carry unforeseeable consequences.


“There’s always going to be unintended consequences,” Mapuna said. “There’s always going to be outside forces that will take advantage of the law, whatever it is.”

Email Michael Brestovansky at

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