The state Department of Health has revoked the medical marijuana dispensary license of Pono Life Sciences Maui LLC, citing the company’s repeated failure to submit annual independent financial audits as required by law.
The violation order issued Tuesday requires the company to close its medical marijuana production and retail operations and destroy or dispose of all of its cannabis or cannabis-related products. The company has 20 days from receipt of the order to contest it, which the company says it intends to do.
“Pono Life Maui has engaged with a premier financial auditor and is currently in the process of completing its audits,” David Griffith, interim chief operating officer for Pono Life Maui, said in a statement. Company officials declined interview requests but said they expect to have additional details that they can share in the coming days.
Pono Life Sciences, which is licensed to William Mitchell Jr., has a retail location at 415 Dairy Road in Kahului which at least for now is closed. The company has sold a wide variety of cannabis, with names like “Jelly Bean,” “Maui Cookie,” and “Blue Dream,” as well as edibles and topicals, according to its website.
The Department of Health issued a medical marijuana dispensary license to the company in 2016, and the company began retail sales in October 2017. Despite repeated attempts to get Pono Life Sciences to submit financial audits to the state, the company never did, according to a copy of the state’s Notice of Violation and Order.
In July 2019 health officials ordered the company to pay a $2,000 fine and provide audits for 2017 and 2018 by Aug. 15, 2019. In response, the Health Department received a letter from Michael Takano, the company’s chief executive officer, saying the audits would be completed no later than Nov. 29, 2019. Takano paid the $2,000 fine but the audits never arrived, according to the violation order.
In January 2020 the company was again fined $2,000 and ordered to provide the audits by Feb. 14, 2020. In response, Takano sent health officials another $2,000 check and a letter saying the company expected to submit the audits later that year. But the audits still never arrived.
On March 11 2021, health officials again fined the company, this time $5,000, and ordered it to submit audits for 2017, 2018 and 2019 by April 1.
The Department of Health says it hasn’t received those documents.
If a hearing is requested, the state and Pono Life Sciences will have the chance to provide evidence and argue their side of the case and even examine and cross-examine witnesses.
The state legalized medical cannabis in 2000, but patients had no legal way to obtain the drug until the state devised a regulated, statewide dispensary system in 2015. Pono Life Sciences was one of just eight companies awarded a dispensary license in 2016 out of 66 applications. Each licensee is allowed up to two production centers for cultivating, manufacturing and packaging cannabis and cannabis products, as well as up to two retail locations. A third retail location may be approved if it serves patients in a rural or underserved area.
The number of facilities has grown to 26 statewide as of December, including 11 production centers and 15 dispensaries.
Department of Health officials are directing medical cannabis patients to the state’s other dispensaries in light of the recent closure of Pono Life Sciences Maui.
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