using a package locally with hex.pm

Yes it is. In your mix.exs, you can list the dependency with the :path keyword (very similarly to what you do with gems).

def dependencies do
  [{:testing_dep, path: "/Users/me/testing_dep"}]
end

You can read a list of all the supported options (e.g., pulling the dependency from GitHub or from a Git repository) in the documentation for the mix deps task.