Hawaii’s government recently put a report together highlighting that there is significant economic potential in legalizing recreational cannabis throughout the state.
Released on Dec. 19 before coming into the spotlight this month, it projects that its current monthly market value could rise more than threefold from ~US$25 million at the moment to a maximum of US$95 million after five years post-legalization. The sector is currently comprised of medical, grey and illicit sources.
Tourism would play a vital role in the growth. The government anticipates that visitors from other American states would contribute a minimum of US$11.5 million per month or US$125 per trip. International tourists on the other hand would be expected to make a more modest contribution of US$12.46 per trip on average.
This report from Cannabis Public Policy Consulting is recommending Hawaiian authorities implement a 15 per cent tax rate to capitalize on revenue generation without pushing consumers to illicit market purchases. Funds from tax revenue would potentially get allocated to public health, substance abuse treatment programs and education.
Projected infrastructure demands would include the establishment of 65 new dispensaries within the first year to cater to adult-use customers alongside an additional 9,700 plants harvested per month.
It would position Hawaii’s adult-use sector as a US$1-billion-dollar market opportunity and contribute significantly to the state economy.
One concern with the proposal is that legalization may erode the medical program unless incentives like tax exemptions preserve patient numbers.
🇺🇸The most promising opportunities for cannabis policy reform in 2026
✅Hawai’i (adult-use)
✅New Hampshire (adult-use)
✅Pennsylvania (adult-use)
✅Virginia (adult-use)
✅Idaho (medical-use)https://t.co/4oMFceF8Go via @MarijuanaPolicy— VOC Nederland (@vocnederland) February 3, 2026
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Government roadblocks have repeatedly prevented legalization
Hawaiian lawmakers have continually shuttered recreational legalization efforts. The House of Representatives most recently put a stop to House Bill 1246 last February. It sought to establish retail programs, appoint regulators to oversee them and create social equity campaigns.
This echoed a failure in 2024 when the Senate approved a similar bill but the more conservative House refused to advance it. It would have authorized adult-use cannabis with a 14 per cent tax, possession of up to one ounce for personal usage and home cultivation of six plants or less.
These setbacks derive from legislative divides in Hawaii with the Senate attempting to push forward legislation that the House does not agree with or views as requiring further review.
Other recent developments in the state
Although full legalization has been stalled, advocates continue to work toward incremental reforms. In January this year, House Representative Gregg Takayama introduced a bill that would allow terminally ill patients and those over 65 with chronic diseases to use medical cannabis in health facilities like hospitals and nursing homes.
The bill advanced from the House Health Committee on Feb. 6 and could come into force in 2030 if passed.
Additionally, lawmakers filed House Bill 1624 and Senate Bill 2420 to place adult-use legalization on the 2026 ballot. This would empower voters to amend the constitution for possession and regulation beginning in July of 2027.
Medical cannabis has been legal in Hawaii since 2000. The program currently serves about 30,000 patients via eight vertically integrated operators. Annual sales have hit approximately US$60 million but illicit competition has caused a roughly 15 per cent decline in recent years.
To combat this decline, Hawaii expanded medical access through telehealth last year and is projecting US$73 million in 2025 sales once calculations are complete.
Personal possession has been decriminalized since 2020, but full adult-use authorization remains elusive, thereby propelling illegal sales as demand remains consistent from tourism.
Read more: Washington bill aims to blend cannabis with Airbnb and other short-term rentals
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