I can't say how your state licensing agency will feel about 'overpowering' a boat. However, most times the horsepower has more to do with weight than actual power that the hull can handle.
That said, I have a 2.5hp engine on a larger and heavier canoe than what you're considering and it really boogies, even upstream. So you don't have to go big or go home. You could go down too. There are usually a fair number of 3 or 3.5 hp engines around used. People used to use them for kicker motors and are moving up to larger ones.
- Big D
Kayak & Canoe Outriggers
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