Musings: Pakalolo Practicalities

In what some may see as a palliative to the election of Donald Trump, marijuana initiatives moved ahead on the mainland when voters took to the polls last week.

As Marijuana Business Daily reports, nearly 60 percent of Americans now live in states that have legalized recreational and/or medicinal use of cannabis, including the entire west coast of the U.S.

In Colorado, which led the way in legal pot, the industry created more than 18,000 new fulltime jobs in 2015 and generated $2.4 billion in economic activity, according to an analysis prepared by the Marijuana Policy group.

That included $1 billion in retail sales, with the rest generated through spillover effects, such  as warehouse space rentals for grow operations, sales of lighting, irrigation materials and cultivation products, and services provided by lawyers, contractors, bookkeepers and consultants. 

Some of those consultants came to the Islands recently to offer the Hawaii Medical Marijuana training and certificate conference. Yes, there is actually an institution — Clover Leaf University — that certifies cannabis workers, although the benefits of such credentials were never made clear.

The day-long event in Waikiki seemed primarily intended to introduce the Cannabis Workers Rising program and ensure that Hawaii medical dispensaries and grow operations employ unionized workers, as represented by UFCW 480.

I was struck by two things: the tremendous amount of money involved in this industry, and the number of Hawaii politicians who showed up for the relatively small event. Of course, this was right before the election, so that may have had some influence. But still, those who attended and/or spoke included Honolulu Mayor Kirk Caldwell, Sen. Brickwood Galuteria, Rep. Marcus Oshiro, Rep. Della Au Belatti and former Sen. Clayton Hee.

As for the money, well, one consultant, who got her start in commercial real estate, noted that one of her Colorado medical marijuana dispensaries grossed $250,000 per day — in cash. What did she do with all that dough? one participant asked. “Invest in commercial real estate,” the consultant replied.

Hmm. Perhaps that helps explain why the high-end Hawaii Life Real Estate company pursued, and won, the sole dispensary license on Kauai.

Speaking of Hawaii Life, I noticed The Garden Island gave one of the company's smarmier Realtors, Neal Norman, extensive free advertising space as it gushed over his $16.2 million sale of Julia Robert's house on Hanalei Bay, while pitching other high end properties he represents on Kauai's North Shore.

These include a $5.5 million estate owned by Danny Errico, co-founder of Equinox gym chain. His big contribution to Kauai was giving serious money to the failed mayoral campaign of anti-GMO activist Dustin Barca.

The article concludes with Norman's self-serving statement:

I appreciate these kind of buyers that own these second homes. They employ a lot of people — gardeners and window cleaners and caretakers.

All of whom earn a pittance compared to the commissions that Norman pulls down.

Which leads me back to the cannabis industry. Yes, it's created jobs, but as the consultant acknowledged, many of them are $15-hour gigs, such as the mind-numbing task of trimming leaves from buds. Then there are the warehouse workers, the bud-tenders (shop clerks) and guards who provide the required 24-7 security. One dispensary operation was spending $1,200 per week just to grind up its green waste for disposal.

The only true opportunities for advancement lie with folks in the IT field. And the really big money remains the purview of the the dispensary owners. To that end, I'm glad that actual farmers on the Big Island and Oahu were granted dispensary licenses. It's great they have a chance to finally make money doing ag on Hawaii.

But I have to raise an eyebrow at further enriching Hawaii Life by giving it a monopoly on Kauai sales.

The consultant also noted that operators might want to consider automation wherever possible because, she said, “we're in the business of forgetfulness.”

Yeah. That's one downside to having stoners on the payroll.

It was also disclosed that one of the “huge revenue streams for dispensaries” is selling clones to people who want to grow their own. Problem is, the Hawaii law still has a major glitich, in that it doesn't specify how cannabis caretakers are supposed to legally obtain seeds and starts. The Lege needs to address that, both to keep the dispensaries viable and ensure that caretakers have a legal source.

Belatti said that legalization isn't in the near future for Hawaii, which seems a shame. As more states legalize on the mainland, the profits in places like Colorado, which draw customers from well beyond state lines, are bound to decline.

But this is one of those situations where Hawaii's isolation could pay off. And the Islands certainly could use the money — the Colorado industry paid $100 million in state taxes last year — especially if the federal spigot is turned off by a Republican Congress.

Still, there is one area of concern: one dispensary partner noted he would be bringing in genetics from the mainland to beef up the Hawaii strains. Uh, might want to think twice about that. Hawaii pakalolo is legendary for a reason, and it ain't just the Islands' mystique.