Washington’s voter-approved cannabis industry requires strict oversight and deft management. And as a recent report from the state auditor’s office shows, more diligence is needed.
While editorially supporting Initiative 502 to legalize recreational use of marijuana in Washington, The Columbian’s Editorial Board wrote that the cannabis industry “would be highly taxed and heavily regulated by the state. Licensed farmers would grow marijuana to be sold in private marijuana-only stores.”
Some of that has come to fruition. According to the Washington Liquor and Cannabis Control Board, marijuana and related products generated $465 million in tax revenue for the state during Fiscal Year 2023. And marijuana stores have provided entrepreneurial opportunities for business leaders throughout the state.
But the “regulated” part of the assessment from 12 years ago often falls short. According to a performance audit from the Office of the Washington State Auditor, Washington is not effectively tracking cannabis from “seed to sale,” as had been promised. The state board has failed to implement a digital tracking system initially adopted in 2018, and instead is using a stopgap system that has “significant limitations.”
“Today, Washington’s legal cannabis marketplace is an industry employing more than 100,000 people, and the opportunities for illegal trade at any point in the process remain real,” the auditor’s report said. Meanwhile, full-service seed-to-sale tracking exists in other states.
Distressingly, media outlet Washington State Standard reports, the Liquor and Cannabis Board does not expect to launch a more sophisticated tracking system until 2031.
Members of the board responded by saying: “Our concern is that readers of this audit report may incorrectly infer that the agency has not prioritized the traceability or regulatory functions that are enacted in law. . . . This could not be further than the truth. More than ever, the agency prioritizes public safety and health in the cannabis industry.”
The problem, however, is that there is little leeway regarding cannabis oversight. Voters approved recreational use of the drug with the expectation of strict control. Undermining the black market to prevent criminal sales was one of the selling points for legalization.
Meanwhile, marijuana remains illegal at the federal level, where policy has provided little support for the 24 states that have approved recreational use. The U.S. Department of Justice is considering reclassifying cannabis from a Schedule I substance to Schedule III, which would remove some restrictions. And Congress is slowly advancing the SAFER Banking Act, which would allow cannabis businesses to access financial services.
But tension remains between federal policy and states that have established marijuana industries. Effectively managing legalization is essential for maintaining public support and allowing businesses to become firmly established.
In 2018, Washington implemented a system to track marijuana products. But Washington State Standard reports that the project “faced serious glitches almost immediately after it launched, preventing businesses from being able to make or report sales.” By 2021 that system was scrapped. The current software “can’t provide enforcement officers with real-time tracking information.”
The public deserves better. Legitimizing an industry that had been demonized for decades requires reliable oversight.
