Hawaii Dispensaries Could Get Tax Break

Medical marijuana dispensaries in Hawaii may not have to pay excise taxes under a state law meant to encourage businesses to set up in economically distressed areas, the Associated Press reported.

But a state representative may try and block the tax break.

Under Hawaiian law, businesses that locate in so-called enterprise zones are excused from paying excise taxes for seven years, according to the AP. They also receive sizable breaks on state income taxes.

Enterprise zones are areas with high unemployment or low average incomes.

A state tourism official told the AP that dispensaries would be eligible for enterprise zone tax breaks as long as they meet certain requirements. Eligible companies in these enterprise zones, which exist in every county in Hawaii, also receive significant state income tax breaks.

State representative Della Au Belatti, however, asserted that legislators who approved Hawaii’s medical marijuana law didn’t intend the tax break for dispensaries, in part because the state is relying on tax revenue generated from the MMJ program. She vowed to work on a legislative fix that would prevent dispensaries from getting the tax breaks.

Hawaii will award eight licenses for medical marijuana businesses on the islands of Oahu, Maui, Kauai and the Big Island. Each licensee may run two production centers and two retail stores and can begin dispensing in July 2016, pending state approval.

The state’s interim industry rules will be published Jan. 4, while the business license application period will run between Jan. 11 and Jan. 29.