The Joint Legislative Audit and Review Committee (JLARC) received and approved for distribution a proposed final report on Washington’s legal recreational cannabis market that concluded producers generated an estimated two to three times more THC than retailers sold in 2023.

The finding was presented July 16, 2025, by Susanna Pratt, JLARC staff, who said RAND Corporation work contracted by JLARC estimated production and sales and that the result is uncertain because the Liquor and Cannabis Board’s (LCB) commercial reporting system data are incomplete and unreliable.

The report matters because JLARC staff said overproduction and limited traceability hinder regulators’ ability to identify diversion to illegal markets, perform product recalls and fully assess tax policy. "The legislative auditor's conclusion is that Washington businesses produced 2 to 3 times more cannabis than retailers sold in 2023," Pratt said.

LCB financial officer Rachel Swanner told the committee the board recognizes gaps in the Cannabis Central Reporting System (CCRS), which was implemented as a temporary solution. She said LCB has issued a request for information for a long-term traceability system and will submit a decision package seeking funding. Swanner said a replacement system could be fully implemented by 2027 if fully funded but that implementing a solution by 2026 was unlikely given budget timing.

JLARC recommended that LCB submit a plan to the Legislature by the end of the year that details the resources and funding needed to collect accurate data from licensees by 2026; LCB partially concurred, agreeing to submit a plan but flagging that full implementation likely requires additional time and funding.

The JLARC presentation included two additional conclusions: licensees’ CCRS reporting is incomplete so LCB cannot rely on it for precise production measures, and social equity producers who receive new producer-processor licenses are likely to enter a market that already faces oversupply, complicating their chances for success.

LCB staff described enforcement and interim steps: expanded data validation, system alerts, mini financial audits by LCB revenue staff, and an internal dashboard linking tax reporting to CCRS entries to help identify inconsistencies.

The committee voted to approve the report for public distribution; the motion carried unanimously.

What’s next: JLARC staff and LCB will pursue the report’s recommendations, and JLARC members said they expect a management plan from LCB in advance of the 2026/2027 budget cycle to inform any funding requests and legislative action.