Cannabis Market Study
25-05 final report | July 2025
Suzanna Pratt, Andrew Hatt, research analysts
Ryan McCord, audit director; Eric Thomas, legislative auditor
Legislative Auditor's conclusion
Washington businesses produced two to three times more cannabis than retailers sold in 2023. Inaccurate and incomplete data limits the Liquor and Cannabis Board's capacity for data-driven regulation.
Key points
- The Liquor and Cannabis Board (LCB) regulates Washington's cannabis industry.
- LCB regulates production by limiting growing space. It does not have an accurate measure of the amount of cannabis produced.
- JLARC's consultant, RAND, estimated broad ranges for cannabis produced, sold, and consumed in 2023 due to data limitations.
- These data limitations prevent LCB from answering the Legislature's questions about supply and demand and restrict its capacity for data-driven regulation.
- An existing oversupply of cannabis and 31.6% decline in producers since 2017 indicate challenging market conditions for producers that will be licensed through the Social Equity in Cannabis Program.
Legislative Auditor’s recommendations
Recommendation #1
LCB should submit a plan to the appropriate committees of the Legislature by December 31, 2025, that details the resources and funding needed to collect accurate data from licensees by December 31, 2026.
The plan should identify the data elements LCB needs to determine production and sales levels and efficiently carry out its statutory responsibilities of ensuring regulatory compliance, preventing diversion, and promoting public safety. The plan should identify the resources needed to collect accurate data from licensees by December 31, 2026.
Legislation required: None
Fiscal impact: None
Implementation date: December 31, 2025
Agency response: LCB partially concurs.
Recommendation #2
The Legislature should consider other ways to increase social equity in the cannabis industry beyond new producer licenses.
JLARC staff's analysis found that new producers entering the industry may face challenging market conditions. In 2022, the Social Equity in Cannabis Task Force recommended creating new types of cannabis licenses exclusive to social equity applicants, such as delivery and social consumption licenses. It also recommended increasing funding to support social equity licensees. Legislation has been introduced that would allow cannabis consumption events and allow producers to sell directly to customers.
Legislation required: Yes
Fiscal impact: Varies depending on approach.
Implementation date: NA
Agency response: LCB concurs.
Video summary
