JLARC: Washington likely produced two to three times more cannabis than sold in 2023; data gaps limit analysis

The Joint Legislative Audit and Review Committee received a preliminary report May 14 finding that Washington likely produced substantially more cannabis in 2023 than licensed retailers sold, and that unreliable state data limit regulators’ ability to measure and respond to market conditions.

JLARC staff Susanna Pratt and Andrew Hap presented RAND Corporation estimates that 2023 production of THC from Washington producers ranged from about 292,000 to 434,000 pounds of THC, while licensed retail sales equated to about 39,000 pounds of THC; estimated resident consumption ranged from about 46,000 to 249,000 pounds of THC. RAND’s best estimate was that production exceeded sales by roughly two to three times, but staff emphasized substantial uncertainty in the numbers because of incomplete reporting.

The Liquor and Cannabis Board’s (LCB) current cannabis reporting system (CCRS) does not capture all retail sales and lacks reliable wholesale weight and product THC content data, JLARC found. Staff and RAND said the incomplete linking of inventory, product characteristics, and sales prevents LCB from using the system for data‑driven regulation, such as tracking products for recalls, verifying tax collections, or detecting diversion to illegal markets.

LCB officials acknowledged the limitations and described a multi‑year modernization plan. Agency staff said a full replacement of the reporting system is expected in the coming years; JLARC’s presentation reported an agency estimate extending to about 2031 for full implementation and recommended LCB submit a plan to the legislature by the end of 2025 that details resources and a timeline to collect accurate production and sales data by the end of 2026.

RAND staff Beau Kilmer described the analytic approach: converting diverse products into a common THC unit, combining survey‑based estimates of user frequency and consumption intensity with sales proxies, and comparing those estimates to available wholesale and retail supply figures. Kilmer cautioned that proliferation of product types and variable THC potency make contemporary consumption harder to estimate than earlier years when flower dominated the market.

Other findings and context presented to the committee included: • LCB reported nearly 1,700 cannabis licenses in fiscal year 2024; producer licenses are limited by canopy (square footage for cultivation) with a maximum of 30,000 square feet per license and up to three licenses per business. • LCB canopy estimates varied widely (4.0 million to 13.8 million square feet) across LCB canopy studies from 2019, 2020 and 2024; canopy is not a reliable proxy for harvested volume because indoor and outdoor operations have very different yields and harvest frequencies. • Retail sales peaked about $1.5 billion in 2021 and were about $1.2 billion in 2023. • RAND estimated 30%–40% of consumed THC in 2023 came from sources other than licensed retailers (home grows, cross‑border purchases, or the illegal market); RAND could not allocate that share precisely among those sources. • The number of producer businesses declined about 32% since 2017, while retailer counts stayed relatively steady; turnover rates were higher for producers than retailers.

The committee discussed implications for the Social Equity in Cannabis Program created by the 2020 legislature. JLARC staff reported that as of February 2025, LCB had issued nine social equity licenses and that legislatively authorized additional social equity producer licenses (10) would increase statewide canopy by an estimated 2.5% if those new licensees grew to the maximum permitted canopy. JLARC recommended the legislature consider broader measures to promote equity beyond awarding additional producer licenses, given evidence of a sustained supply surplus.

LCB and industry representatives said a variety of software products are available that other states use to track cannabis across the supply chain; LCB officials said they are evaluating options, including commercial traceability systems that some states require, but also cautioned about implementation costs and the distribution of those costs between government and licensees.

JLARC staff said they will return with a proposed final report in July that will include the agency response to recommendations and greater methodological detail. The committee then took questions from members, including LCB staff and RAND analysts.