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Compliance Review of Cannabis Enforcement Divisions

An Audit and Oversight Report

Author RN Collins

The 3rd  in a series of 10 articles for cannabis law report

Contact RN Collins: https://www.linkedin.com/in/rn-collins/

EXECUTIVE SUMMARY

Cannabis enforcement divisions operate at the critical intersection between regulatory aspiration and market reality. They are charged with ensuring that licensed operators comply with the full range of applicable laws, rules, and conditions of licensure; that illicit market operators are identified, investigated, and removed; and that the regulated cannabis market remains sufficiently competitive, safe, and trustworthy to attract consumers away from unlicensed alternatives. This report examines compliance and enforcement operations in five state cannabis regulatory environments: Massachusetts, California, New York, Washington, and Maryland, drawing on official audit reports, agency enforcement data, and legislative oversight records from 2024, 2025, and early 2026.

The findings reveal a set of cross-cutting deficiencies that persist across jurisdictions regardless of market maturity, agency budget, or governance structure. These include: reactive rather than proactive inspection models that leave compliance gaps undetected until consumer harm occurs; insufficient enforcement staffing relative to licensee populations; inadequate due-process infrastructure, including the absence of designated hearing officers; inconsistent application of progressive discipline frameworks; and enforcement resource allocation skewed toward high-profile illicit market seizures at the expense of routine licensed operator compliance.

At the same time, several developments represent meaningful enforcement progress. New York’s Office of Cannabis Management (OCM) dramatically escalated its illicit market enforcement in 2024 and 2025, completing over 1,200 inspections in a single year and eventually exceeding $125 million in cumulative illicit product seizures through mid-2025.¹ California’s Unified Cannabis Enforcement Task Force (UCETF) seized $254 million in illicit cannabis products in 2024 and $609 million in 2025—an eighteen-fold increase since the task force’s 2022 creation, bringing the cumulative total to more than $1.2 billion.² The California State Auditor’s Report No. 2024-105 identified specific, remediable deficiencies in how the Department of Cannabis Control (DCC) enforces youth marketing and packaging restrictions, documenting that the DCC inspected fewer than half of its licensees in any year since 2022 and lacked a consistent framework for identifying and escalating repeat offenders.³ The California Legislature convened an oversight hearing on the audit’s findings on February 17, 2026, underscoring the ongoing political and regulatory salience of these gaps.⁴ Massachusetts’ CCC went without a designated hearing officer for over two years, a vacancy that effectively suspended the administrative enforcement process and compromised the due-process rights of licensees subject to sanctions.⁵ And the Washington State LCB’s 2024 audit follow-up—confirmed by the JLARC May 2025 cannabis market study—documented a persistent enforcement staffing crisis and data infrastructure failure that directly limited the agency’s capacity to enforce against the most complex and high-risk compliance violations.⁶

This report examines each state in depth, identifies cross-cutting compliance failures, and offers regulatory and legislative recommendations calibrated to address the structural causes of enforcement deficiency rather than their symptoms.

I. ENFORCEMENT ARCHITECTURE IN STATE CANNABIS REGULATORY AGENCIES

A. The Core Enforcement Mission

State cannabis regulatory enforcement divisions operate under a dual mandate: ensuring licensed operators comply with the full range of applicable laws, rules, and conditions of licensure, and suppressing unlicensed market activity that undermines public safety and the economic viability of the licensed market. These two missions are structurally complementary but operationally in tension. Resources dedicated to illicit market suppression—which tends to be more visible, politically rewarding, and headline-generating—are resources not available for routine licensee compliance inspections, which are essential to maintaining consumer safety in the licensed market.

Most state cannabis enforcement divisions are organized around two principal enforcement tools: inspections and investigations. Inspections are typically administrative compliance checks of licensed or suspected unlicensed establishments, conducted by enforcement officers or compliance consultants, which may or may not require advance notice or probable cause. Investigations are more resource-intensive inquiry processes directed at specific suspected violations, often involving surveillance, search warrants, coordination with other law enforcement agencies, and evidence collection for potential prosecution or license revocation proceedings.⁷

A critical structural challenge for all state cannabis enforcement divisions is the ratio of enforcement staff to regulated entities. Washington’s LCB Enforcement and Education Division works with approximately 13,000 liquor and cannabis licensees and their employees across the state.⁸ California’s DCC budget for fiscal year 2025-26 allocated approximately $71 million to illicit enforcement activity, with the balance supporting legal market oversight activities.⁹ New York’s OCM enforcement team—comprising sworn law enforcement investigators, analysts, and civilian support staff—is responsible for a market that had grown to 556 licensed dispensaries by 2025 and an estimated thousands of additional unlicensed retail locations active throughout the state.¹⁰

B. Progressive Discipline Frameworks

Most state cannabis enforcement frameworks establish a graduated response to violations, moving from education and voluntary compliance, through notice of deficiency, to formal citation, fine, license suspension, and ultimately revocation. The effectiveness of this framework depends on three prerequisites: a comprehensive, current record of each licensee’s compliance history; consistent application of escalation criteria so that repeat offenders face progressively more serious consequences; and timely processing of enforcement actions through the administrative adjudication process.

All three prerequisites have been identified as deficient in at least one major state cannabis enforcement system reviewed in this report.

II. MASSACHUSETTS: ENFORCEMENT PROCESS FAILURES AND THE MISSING HEARING OFFICER

A. Delayed Fines and Absent Adjudication Infrastructure

The Massachusetts State Auditor’s August 2025 audit of the CCC identified enforcement process failures as its second major finding, documenting that the CCC violated state regulations by failing to assess and collect fines within the timeframes established by its own enforcement policies.¹¹ The CCC’s internal Notice of Deficiency (NOD) process requires that inspection reports be transmitted to licensees within 48 hours.¹² The audit found that this internal policy requirement was consistently not being met. Even accepting a procedural exception the CCC raised during the audit process, the agency would still have been in noncompliance with its own timelines.¹³

Massachusetts’ cannabis enforcement regulations at 935 CMR 500.360 require that fines be assessed and collected within a “reasonable time,” but do not define that term with specificity.¹⁴ The CCC had not defined “reasonable time” in written internal policy, creating an environment where enforcement timelines were entirely at staff discretion. The auditor found that this ambiguity, combined with inadequate supervisory oversight, produced significant delays in enforcement action processing in all five fines assessed during the audit period, with key procedural steps—issuance of deficiency notices, initiation of enforcement actions, and finalization of stipulated agreements—each significantly delayed.¹⁵

B. The Two-Year Hearing Officer Vacancy

The most serious enforcement infrastructure failure documented in the Massachusetts audit was the absence of a designated hearing officer at the CCC for the entire audit period from July 1, 2022 through June 30, 2024.¹⁶ The hearing officer position became vacant at the beginning of the audit period and remained unfilled for over two years.¹⁷ Under CCC regulations at 935 CMR 500.500(5), the Commission is required to designate a hearing officer to oversee administrative hearings related to fines, sanctions, and other enforcement actions taken against marijuana establishments.¹⁸

The consequences of this vacancy were severe. Without a hearing officer, the CCC could not conduct timely administrative hearings or facilitate the appeals process for licensees subject to enforcement action.¹⁹ Unresolved compliance issues were permitted to persist or worsen as enforcement actions languished without adjudication.²⁰ The auditor specifically noted that enforcement delays create an inequitable situation: larger, better-resourced cannabis businesses can absorb prolonged enforcement processes through legal representation and operational continuity, while smaller establishments—particularly those in the social equity tier—lack the resources to navigate extended proceedings and may be disproportionately harmed by delayed resolution.²¹

Furthermore, the absence of a hearing officer compromised due-process rights for licensees subject to fines and enforcement actions, who had no timely, neutral forum in which to contest adverse agency determinations.²² The CCC ultimately designated a hearing officer who began working with the Commission on October 20, 2024—after the audit period and after the auditor had identified the vacancy as a finding.²³ By November 2024, the commission reported that all pending matters before the hearing officer were current with no backlog.²⁴

As of August 2025, the CCC posted a contract hearing officer position, suggesting the agency was still working to stabilize this function on a durable basis rather than through a permanent staff appointment.²⁵

C. Enforcement Inequity in Fee Application

The Massachusetts audit also identified inequities in the enforcement of financial conditions of licensure that parallel the fee collection failures documented across the agency. Some cannabis businesses were required to pay prorated license extension fees while others in identical circumstances were inexplicably excused, with no records kept of when or why fees were waived.²⁶ In Brookline, the audit found that one cannabis business was required under its Host Community Agreement to make a $975,000 charitable donation, while a second business in the same municipality faced no such requirement.²⁷ Separately, a new cannabis business in another jurisdiction was required to pay over $100,000 in Community Impact Fees before making its first sale—a condition that the auditor found favored larger, multi-state operators capable of paying such sums while placing smaller, Massachusetts-based businesses at a competitive disadvantage.²⁸ These inequities suggest that enforcement discretion, which should be constrained by documented standards and supervisory review, was instead being exercised ad hoc in ways that created the appearance of favoritism.

III. CALIFORNIA DCC: REACTIVE INSPECTIONS AND YOUTH MARKETING ENFORCEMENT GAPS

A. Report No. 2024-105: Youth Advertising and Marketing Enforcement

The California State Auditor published Report No. 2024-105 on August 7, 2025, covering the DCC’s enforcement of regulations prohibiting cannabis product packaging that is attractive to children.²⁹ The report represents the most detailed recent examination of a specific enforcement function in a major state cannabis regulatory agency and yields findings broadly applicable to enforcement adequacy across all compliance domains. The audit was requested by Assemblywoman Jacqui Irwin (D-Ventura) and was the subject of a Joint Legislative Audit Committee oversight hearing on February 17, 2026, at which lawmakers, public health advocates, and industry representatives debated the audit’s findings and potential legislative responses.³⁰

The audit’s central finding was that state law and DCC regulations concerning design elements attractive to children are “unspecific, leading to subjective and sometimes inconsistent determinations of whether cannabis product packaging is compliant.”³¹ The DCC’s regulations prohibit images that are “attractive to children,” cartoon depictions, and similar design elements, but do not specify what combination of attributes creates a prohibited design, how reviewers should weigh competing design elements, or what threshold of attractiveness triggers enforcement action.³² This regulatory vagueness produced inconsistent outcomes: the auditor’s independent review of 40 cannabis products found that 14 had images of food or candy on their packaging, including images of marshmallows, cereals, fruits, and chocolate chips, some of which had been previously reviewed and approved by DCC staff.³³ The auditor noted a 469 percent increase in California Poison Control System calls related to accidental cannabis ingestion for children age five and younger between 2016 and 2023—from 148 calls to 842 calls—as a concrete public safety basis for the audit.³⁴

The DCC had designed an internal scoring tool to assist reviewers—a rubric listing seven criteria, each rated on a 0-3 scale, with point totals determining the degree of child-attractiveness for a given package.³⁵ However, this tool was still undergoing legal review as of July 2025, had not been published in DCC regulations, and was therefore not available to guide either reviewers or licensees in making consistent compliance determinations.³⁶ The auditor directed the DCC to complete implementation of the rubric and make it publicly available by August 2026.³⁷ The auditor specifically called out strain names such as Cherry Pie, Tropicana Punch, and Lemon Cherry Gelato—the latter a top-ten bestseller in California in 2024—as raising child-attractiveness concerns that the DCC had not addressed through enforcement or regulatory guidance.³⁸

At the February 17, 2026 oversight hearing, the California Cannabis Operators Association presented an independent audit of 162 top-selling brands that found 68 percent were clearly compliant, 22 percent landed in a gray zone due to undefined regulatory terms, and 10 percent crossed the line under any reasonable reading of current law.³⁹ Public health advocates, including a co-chair of a CDPH child-attractive packaging task force, noted that almost none of that task force’s 2024 recommendations had been implemented, and urged California to follow Oregon’s model of requiring pre-market packaging review.⁴⁰ In direct legislative response, Assemblywoman Irwin introduced AB 2249 and AB 2532 in February 2026 to address youth advertising and packaging requirements, respectively, representing the first California legislative follow-through on the audit’s findings.⁴¹

B. Insufficient Inspection Capacity

The audit found that the DCC’s goal is to inspect all licensees annually, but that it had inspected fewer than half of its licensees in each year since 2022.⁴² This inspection gap means that a large portion of the licensed market operates without routine compliance review in any given year, creating opportunities for ongoing violations—whether packaging violations, product safety failures, or operational noncompliance—to persist undetected until a consumer complaint brings them to the agency’s attention.

In May 2025, the DCC submitted a budget change proposal requesting funding for additional inspection staff to increase its capacity for routine inspections.⁴³ The California Legislature had not yet acted on this request as of the auditor’s reporting date. The DCC’s own June 2025 performance audit acknowledged that compliance inspections are “primarily reactive” and initiated by complaints rather than systematic schedule.⁴⁴ Until additional staffing is secured and deployed, the DCC’s compliance model will remain predominantly reactive—driven by consumer complaints and acute public safety threats rather than systematic licensee review.

C. Repeat Offender Identification Failures

The auditor also found that the DCC lacked a consistent process for identifying and escalating enforcement action against repeat offenders.⁴⁵ Without a mechanism to link multiple compliance actions to a single licensee’s history, inspectors reviewing a violation have no systematic way to determine whether the same business has been cited for similar violations previously, which in a progressive discipline framework should trigger a more serious response.⁴⁶

In response to the audit, the DCC’s Compliance Division stated it was establishing formal policies and procedures requiring all inspection and investigation case files to clearly document a licensee’s entire compliance history.⁴⁷ The DCC was also adapting its CLEaR licensing system to enable production of summary reports on a licensee’s prior compliance history, and was directed by the audit to specify escalation guidelines by February 2026.⁴⁸ The State Auditor assessed the DCC’s response as still in progress, with the rubric implementation deadline set for August 2026.⁴⁹

D. The Illicit Market: Impressive Seizures, Structural Limitations

California’s UCETF seized approximately $254 million in illicit cannabis products in 2024 and $609 million in 2025—an eighteen-fold increase from 2022 levels, with cumulative seizures exceeding $1.2 billion since the task force’s inception.⁵⁰ These figures include large-scale operations such as a May 2025 operation in Kern, Kings, and Tulare counties that deployed over 200 sworn officers from 15 agencies and seized over 105,700 illicit cannabis plants, and a July 2025 operation in Monterey County targeting pesticide-laden cultivation that destroyed 38 tons of illicit cannabis worth more than $125 million.⁵¹

These enforcement achievements are substantial. However, industry analysts have noted that even the full 2024 seizure total of approximately $254 million represents roughly 5 percent of California’s estimated $10 billion unregulated cannabis market.⁵² A March 2025 report commissioned by the DCC estimated that California produced approximately 11.4 million pounds of unregulated cannabis in 2024, compared to approximately 1.4 million pounds of regulated cannabis.⁵³ Regulated retail sales totaled approximately $4.7 billion in 2024, while analysts estimated roughly $7.8 billion in illegal in-state sales and an additional approximately $29 billion shipped out of state.⁵⁴ These figures suggest that enforcement, however aggressive, cannot on its own eliminate an illicit market of this magnitude absent structural regulatory changes—including greater retail access (57 percent of California cities and counties do not allow cannabis retail businesses to operate),⁵⁵ more competitive pricing enabled by tax reform, and federal banking access.

IV. NEW YORK: ENFORCEMENT ESCALATION AND DUE PROCESS CHALLENGES

A. The 2024 Illicit Market Enforcement Push

New York’s OCM enforcement division substantially expanded its illicit market operations in 2024, conducting over 1,200 inspections of suspected unlicensed cannabis dispensaries between December 1, 2023 and November 1, 2024.⁵⁶ These inspections resulted in the seizure of over $67 million worth of illicit cannabis products, including 6,929 pounds of cannabis flower, 608 pounds of concentrates, and 9,106 pounds of cannabis edibles.⁵⁷ An enforcement task force worked with landlords to execute eviction proceedings against illegal dispensaries, resulting in approximately 350 sealing orders and padlocking of unlicensed storefronts across New York State.⁵⁸ Following these enforcement actions, legal cannabis sales in New York City reportedly surged by 72 percent over a ten-week period, with retailers reporting a collective $2.6 million increase in weekly revenue.⁵⁹

New York’s 2024 enacted budget significantly expanded OCM enforcement authority, granting the OCM and the New York State Department of Tax and Finance (DOF) new powers to conduct surprise inspections, seize illegal products, and obtain court injunctions against unlicensed sellers.⁶⁰ Selling cannabis without a license was reestablished as a criminal offense—a Class A misdemeanor—and civil penalties were increased to up to $10,000 per day for unlicensed cultivation or sale, with the possibility of up to five times the revenue from prohibited activities as an additional sanction.⁶¹ The DOF also received authority to levy civil penalties for unlicensed operators failing to pay required cannabis taxes, and a new tax fraud crime was established for willful failure to collect or remit cannabis taxes.⁶²

B. 2025 Enforcement Continuation

Enforcement continued to expand in 2025. Through August 2025, the OCM had executed nearly 500 enforcement actions, issued 488 sealing orders, conducted approximately 2,000 inspections, and seized over $125 million in cumulative illicit product.⁶³ The OCM’s 2025 annual report, released December 31, 2025, documented enforcement activity throughout 2025, with 2,017 total enforcement actions, over $20 million in illicit cannabis product seized, and 89 Orders to Seal issued through December 2025.⁶⁴ The OCM also coordinated enforcement with local and state law enforcement agencies, including county sheriff’s offices, on a regional basis, generating enforcement press releases across multiple New York regions through late 2025.⁶⁵

C. The Omnium Enforcement Failure and OCM Leadership Change

Against this backdrop of enforcement expansion, a notable enforcement failure emerged in late 2025: the OCM’s management of an enforcement case against Omnium, a cannabis operator, which resulted in a failed product recall and the withdrawal of a licensing disciplinary action.⁶⁶ The Omnium matter led Governor Hochul to request the resignation of Acting OCM Executive Director Felicia Reid, who was pushed out on December 14, 2025.⁶⁷ The specific facts of the Omnium case were not fully disclosed in public reporting, but the episode illustrated how enforcement process failures at the case level—even against a backdrop of broad enforcement success on illicit market activity—can expose regulatory credibility risks and precipitate leadership consequences.

D. Administrative Hearings Infrastructure

New York’s OCM established an Office of Administrative Hearings (OAH) staffed by Administrative Law Judges (ALJs) to conduct fair, impartial hearings in enforcement matters.⁶⁸ This infrastructure—in contrast to Massachusetts CCC’s prolonged hearing officer vacancy—provides a more robust framework for due process in enforcement proceedings. The OCM OAH adjudicates both enforcement actions brought by the Office of General Counsel against licensees and appeals of licensing decisions brought by licensees and prospective licensees, serving as an important model for how cannabis regulatory agencies can institutionalize their adjudication function.⁶⁹

V. WASHINGTON LCB: STAFFING CRISIS AND TECHNOLOGY-LIMITED ENFORCEMENT

A. Enforcement Officer Turnover

The Washington State Auditor’s 2024 follow-up report on LCB oversight documented that the enforcement division faced approximately 50 percent turnover among enforcement officers, directly limiting the agency’s capacity to respond to complex compliance risks.⁷⁰ This level of turnover is operationally devastating for a specialized enforcement function: new officers require extended training before they can independently manage the full range of cannabis compliance inspections, investigation techniques, and coordination with law enforcement partners.⁷¹

The LCB Enforcement and Education Division is a commissioned law enforcement agency whose officers are required to complete the Basic Law Enforcement Academy (BLEA) training before independent deployment.⁷² The hiring process—which requires application through Public Safety Testing, background investigation, physical fitness standards, and academy training—means that a newly recruited enforcement officer requires many months before being fully operational.⁷³ A 50 percent turnover rate therefore means the division is perpetually running at reduced effective capacity, with a significant share of its officers in training or at reduced proficiency levels.

B. Technology Constraints on Enforcement Effectiveness

Washington’s enforcement division operates in direct dependence on the deficient CCRS data infrastructure. The audit found that enforcement officers lack real-time tracking information, making it impossible to compare what a licensee reports in CCRS against actual on-site inventory during an inspection in a timely or systematic way.⁷⁴ Inspectors must instead request a copy of a licensee’s CCRS data through a manual process, then compare that data to what they observe on premises—an inefficient workflow that creates significant enforcement delays and opportunities for manipulation.⁷⁵

The JLARC May 2025 Cannabis Market Study, which engaged RAND Corporation to analyze LCB data quality, found that CCRS data “is incomplete and unreliable” and that RAND was unable to use CCRS data to determine the actual amount of cannabis produced and sold.⁷⁶ Specifically, RAND found that sales records are incomplete; that there is limited ability to link inventory, product detail, and sales records; and that weight data for wholesale cannabis is unreliable.⁷⁷ Washington has not had a usable traceability system since 2017, the last year for which reliable data about cannabis production and sales was available.⁷⁸ The JLARC study made two recommendations: that LCB submit a plan to the Legislature by December 31, 2025 detailing resources needed to collect accurate data from licensees by December 31, 2026, and that the Legislature consider additional equity measures for the cannabis industry.⁷⁹

The CCRS’s systemic data errors—including reported annual cannabis sales of approximately $7.7 billion in 2022 compared to the Department of Revenue’s estimate of $1.3 billion for the same period—also undermine the enforcement division’s data-driven risk prioritization capabilities.⁸⁰ Automated alert systems designed to flag suspicious reporting patterns cannot function reliably when the underlying data is structurally unreliable. The 2024 audit found the LCB was in the process of adding some new automated alerts to CCRS—including notifications when licensees report no activity and when products fail lab tests—and the agency deployed a new required reporting function within CCRS on October 1, 2025.⁸¹ However, these partial improvements do not fully address the diversion and tax revenue loss risks identified in the 2018 performance audit, and LCB does not expect a full traceability replacement to be implemented until 2031.⁸²

C. Proactive vs. Reactive Enforcement Model

Despite these constraints, the LCB made some enforcement improvements during the audit period. The agency updated its complaint prioritization process, routing complaints involving the most immediate public health and safety threats to enforcement officers for immediate investigation, while assigning regulatory compliance matters to compliance consultants who can escalate to enforcement officers when needed.⁸³ The LCB also began conducting proactive “premises checks”—unannounced compliance visits not triggered by specific complaints—as a supplement to complaint-driven inspections.⁸⁴

These improvements represent meaningful progress but fall short of the risk-based, data-driven compliance model that the 2018 performance audit recommended and the 2024 follow-up audit and 2025 JLARC market study confirmed was not yet achievable given data infrastructure limitations.⁸⁵

VI. MARYLAND: ATCC AUDIT FINDINGS ON SEGREGATION OF DUTIES

A. The April 2025 ATCC Audit

Maryland’s Alcohol, Tobacco, and Cannabis Commission (ATCC) received an April 2025 audit report from the Maryland Department of Legislative Services covering its compliance and enforcement operations.⁸⁶ The ATCC occupies a distinctive regulatory structure in Maryland: it serves as the enforcement arm for cannabis law compliance while a separate agency, the Maryland Cannabis Administration (MCA), handles licensing and regulatory functions.⁸⁷ The ATCC enforces cannabis laws with respect to unlicensed cannabis market activity, while the MCA’s Regulation, Enforcement, and Compliance program handles licensed operator product safety and compliance enforcement.⁸⁸

The ATCC audit’s primary finding was that the agency failed to properly segregate collection and licensing duties as required.⁸⁹ Responsibility for processing collections transferred from the Comptroller of Maryland to the ATCC effective July 1, 2023.⁹⁰ The ATCC’s implementation of this new function failed to establish adequate separation of duties: the employee who recorded collections upon receipt was also responsible for verifying they were deposited—a segregation failure that creates conditions under which cash receipts could be misappropriated without ready detection.⁹¹ Additionally, three of the nine employees who could independently issue or renew licenses also processed collections, creating a similar commingling of authorization and recording functions.⁹² The auditor attributed this condition to “limited staffing” at the agency.⁹³

The ATCC collected approximately $3.3 million in collections during the period from July 1, 2023 through June 30, 2024, primarily from checks and money orders for licensing and permit fees and fines.⁹⁴

B. Unlicensed THC Products Enforcement: Appellate Court Ruling and Expanded Authority

In 2025, Maryland enacted new legislation—Senate Bill 0214 and House Bill 0012, effective July 1, 2025—establishing packaging, labeling, and age-verification standards for all THC products, including those sold outside licensed dispensaries.⁹⁵ Products containing THC above 0.5 milligrams per serving or 2.5 milligrams per package must be sold through a licensed dispensary.⁹⁶ The ATCC is authorized to seize, destroy, or confiscate noncompliant THC products and to issue citations for sales to persons under 21.⁹⁷

On September 9, 2025, the Appellate Court of Maryland issued its decision in Governor Wes Moore, et al. v. Maryland Hemp Coalition et al., No. 1590, September Term 2023, reversing the Washington County Circuit Court’s October 2023 preliminary injunction that had prohibited the ATCC from enforcing the state’s cannabis laws against retail businesses selling intoxicating THC products prior to July 1, 2023.⁹⁸ The appellate court held that the plaintiffs were unlikely to succeed on the merits of their challenge, and further found that intoxicating products containing synthetic hemp derivatives created in a chemical process—such as delta-8 and delta-10 THC—”are now and have always been illegal in Maryland.”⁹⁹ The ruling, which had been stayed pending the appeal for nearly two years, removed the injunction’s protection from approximately 1,500 hemp retailers operating in the state outside the licensed dispensary framework.¹⁰⁰

Following the appellate ruling, the ATCC announced it was “prepared to expand its State-wide investigation and enforcement actions against any persons and businesses who distribute or sell intoxicating THC products in violation of Maryland law.”¹⁰¹ Conviction of packaging, labeling, or potency violations carries fines up to $5,000 per offense, with enhanced fines up to $10,000 for offenses involving THC products, and potential adverse effects on any other state-issued license held by a violating business.¹⁰² This development significantly expanded the ATCC’s enforcement jurisdiction over the hemp-derived THC product market—a multi-million-dollar segment that had been operating in regulatory limbo since 2023.¹⁰³

VII. CROSS-CUTTING FINDINGS AND RECOMMENDATIONS

A. The Reactive-Proactive Inspection Imbalance

The most consistent finding across all five jurisdictions is that cannabis enforcement divisions are predominantly reactive—responding to consumer complaints and acute violations rather than systematically inspecting the licensed market. California’s DCC, which has the most resources and the most mature program, still inspected fewer than half of its licensees in each year since 2022.¹⁰⁴ Washington’s LCB cannot conduct meaningful data-driven risk prioritization because its CCRS data infrastructure is inadequate to support it—a conclusion reached independently by the State Auditor in 2024 and confirmed by the JLARC-commissioned RAND analysis in 2025.¹⁰⁵ Massachusetts’ CCC went years without a hearing officer to adjudicate enforcement actions and had no written policy defining the timeframe for enforcement action processing.¹⁰⁶

Reactive enforcement is structurally inequitable: it preferentially detects violations that generate public complaints (typically consumer-facing issues like packaging violations and product safety) while allowing less visible violations—financial reporting, employment practices, ownership structure—to persist undetected. Moving to a more proactive, risk-based inspection model requires both adequate staffing and, for states like Washington where seed-to-sale tracking is inadequate, investment in data infrastructure that makes risk-based prioritization analytically possible.

B. Due Process Infrastructure

Massachusetts’ two-year hearing officer vacancy illustrates a broader risk: cannabis regulatory agencies, as specialized new institutions, often lack the institutional infrastructure that comparable regulatory agencies in mature industries have developed over decades. Administrative adjudication—hearings, appeals, procedural due process—cannot be improvised. Agencies must designate qualified hearing officers, establish written hearing procedures, and maintain the capacity to process enforcement actions on defined timelines as a baseline operational requirement, not as an aspirational goal. New York’s OCM, with its institutionalized Office of Administrative Hearings staffed by ALJs, represents the appropriate model for due process infrastructure in a large-market cannabis regulatory agency.

C. Compliance History Integration

California’s audit finding on repeat offender identification failures, combined with similar findings in Massachusetts, points to a systemic weakness in how compliance history is recorded and used. An enforcement system that does not systematically track and apply prior compliance history cannot function as a progressive discipline framework—it can only respond to each violation as if it were the first. Every cannabis regulatory agency should maintain a comprehensive, integrated compliance history for each licensee, accessible to all inspectors and investigators, with documented escalation protocols specifying what response is required for each additional violation. The DCC’s February 2026 escalation guidelines deadline represents a minimum standard; the State Auditor’s directive to complete the packaging rubric implementation by August 2026 addresses the equal problem of standards so vague they cannot support consistent enforcement in the first place.

D. Enforcement Staffing and Retention

Washington’s 50 percent enforcement officer turnover rate and Maryland’s staffing-limited segregation of duties failures illustrate the human capital dimension of enforcement adequacy. Cannabis enforcement is a specialized function that requires significant training investment, competitive compensation, and career development pathways. States that fund enforcement positions without adequate compensation frameworks will experience perpetual staffing instability that limits operational effectiveness and increases per-case costs. Maryland’s attribution of its segregation failure to “limited staffing” also underscores that even small agencies require minimum staffing thresholds to maintain basic internal controls.

E. The Illicit Market vs. Licensed Market Enforcement Tradeoff

California’s UCETF represents a significant investment in illicit market suppression that has produced impressive headline numbers but limited proportional market impact against an illicit market estimated at more than ten times the regulated market’s value. The structural causes of illicit market scale—tax-price differentials, limited retail access, banking exclusion, and overcriminalization of minor violations—are not amenable to enforcement solutions alone. California’s independent excise tax rate history illustrates the policy interactions at stake: Governor Newsom signed legislation in 2025 to roll back the excise tax to 15 percent, halting a planned increase to 19 percent, specifically because the higher rate was undermining the licensed market’s ability to compete.¹⁰⁷ States must evaluate whether enforcement resources directed at spectacular seizures produce better regulatory outcomes than equivalent investment in licensed market compliance infrastructure, consumer protection, and retail access expansion.

F. Regulatory Specificity as a Prerequisite for Consistent Enforcement

The California packaging audit and the February 2026 legislative hearing reveal a dimension of enforcement inadequacy that is often overlooked: regulatory standards so vague that consistent application is structurally impossible. When the DCC reviews three similar cannabis crispy rice treat packages and finds only one attractive to children—with no documented basis for distinguishing among the three—it is not merely making a discretionary call. It is failing to perform the core regulatory function of providing predictable, rule-based compliance standards. The CaCOA industry audit finding that 22 percent of top-selling brands fell in a gray zone of undefined regulatory terms confirms that regulatory vagueness is a systemic market-wide problem, not an isolated compliance failure. Regulatory specificity is a prerequisite for consistent enforcement, not a concession to industry.

G. Recommendations

1. Hearing Officer Requirements. Every state cannabis regulatory statute should require that the agency designate a qualified administrative hearing officer, provide adequate staffing and budget support for that position, and establish written procedures for administrative hearings with defined timelines. Vacancy in this position for more than 90 days should trigger mandatory reporting to the legislature. Agencies should examine New York’s OAH model—with career ALJs handling both enforcement actions and licensing appeals—as the appropriate standard for mature markets.

2. Annual Inspection Requirements. Legislatures should establish statutory minimum inspection rates—such as a requirement that every licensed cannabis establishment receive at least one unannounced inspection per license year—and should appropriate enforcement staffing levels commensurate with achieving that requirement. Budget requests for enforcement staffing should include data demonstrating the current licensee-to-inspector ratio and the inspection rate achieved in the prior year.

3. Compliance History Systems. Every state cannabis regulatory agency should be required, by statute or regulation, to maintain an integrated compliance history for each licensee, accessible to all inspectors and investigators. Inspection and investigation reports should be required to include a review of prior compliance history, and escalation protocols should be established and published specifying how many prior violations of what severity trigger what level of response. California’s February 2026 escalation deadline is a floor, not a model—other states should adopt equivalent requirements by rule rather than by audit directive.

4. Regulatory Specificity in Prohibition Standards. California’s experience with child-attractive packaging illustrates a broader principle: vague prohibitions produce inconsistent enforcement. Regulatory standards prohibiting specific practices must be specific enough to yield consistent determinations by different inspectors reviewing the same facts. Agencies should publish rubrics, examples, and formal guidance to supplement statutory and regulatory text, and should conduct inter-rater reliability testing on inspectors applying subjective standards. The State Auditor’s recommendation that California consider a pre-market packaging review process modeled on Oregon’s—where packaging is reviewed for compliance before products reach market—offers the most durable solution to the vagueness problem by shifting the compliance determination from post-market enforcement to pre-market approval.

5. CCRS Data Infrastructure and JLARC Recommendation Implementation. Washington State’s Legislature should act on the JLARC May 2025 Cannabis Market Study recommendations by requiring LCB to submit a detailed plan identifying data elements needed for regulatory compliance, diversion prevention, and public safety by December 31, 2026, and to fund a replacement traceability system on a timeline materially shorter than the current 2031 projection. An enforcement agency operating without reliable underlying data is fundamentally limited in its risk-based capacity; the JLARC finding that LCB “will likely continue to have incomplete and unreliable data” until 2031 represents an ongoing public safety and revenue protection failure that requires legislative intervention, not merely agency planning.

6. Graduated Illicit Market Enforcement Evaluation. States should be required to publish annual reports evaluating the relationship between illicit market enforcement expenditure and illicit market size, using consistent methodology. The goal is not to discourage enforcement but to ensure that enforcement resource allocation is evidence-based and that structural barriers to regulated market growth—retail access limitations, tax burdens, banking exclusion—are addressed alongside enforcement, not instead of them. California’s excise tax reduction in 2025 demonstrates that structural reforms and enforcement investment must work in conjunction.

ENDNOTES

1. N.Y. Office of Cannabis Management (OCM), 2024 Enforcement Report Press Release (Jan. 2025), https://cannabis.ny.gov/new-york-state-office-cannabis-management-issues-2024-enforcement-report; OCM, Press Release: OCM Enforcement to Date (Aug. 14, 2025), https://cannabis.ny.gov/system/files/documents/2025/08/seneca-falls-enforcement-action-release-1.pdf.
2. Cal. Dep’t of Cannabis Control (DCC), California Tops $1.2 Billion in Illegal Cannabis Seizures, Up 18x Since 2022 (Jan. 27, 2026), https://www.cannabis.ca.gov/posts/california-tops-1-2-billion-in-illegal-cannabis-seizures-up-18x-since-2022/; Cal. Gov.’s Office, Since January, California Has Seized Over $316 Million in Illicit Cannabis(Apr. 10, 2025), https://www.gov.ca.gov/2025/04/10/since-january-california-has-seized-over-316-million-in-illicit-cannabis/.
3. Cal. State Auditor, Report No. 2024-105: Department of Cannabis Control—Youth Advertising and Marketing Enforcement (Aug. 7, 2025), https://www.auditor.ca.gov/reports/2024-105/.
4. CA Lawmakers Hold Hearing on Cannabis Packaging, Cal NORML (Feb. 23, 2026), https://www.canorml.org/calawmakersholdheaingoncannabispackaging/ (Joint Legislative Audit Committee oversight hearing held February 17, 2026, chaired by Asm. Harabedian; hearing requested by Asm. Irwin).
5. Mass. State Auditor’s Office, Cannabis Control Commission—Finding 2, https://www.mass.gov/info-details/cannabis-control-commission-finding-2.
6. Wash. State Auditor’s Office, Evaluating Oversight of the Cannabis Industry: Follow-Up Issues (Oct. 2024), https://sao.wa.gov/reports-data/audit-reports/evaluating-oversight-cannabis-industry-follow-issues; JLARC, Cannabis Market Study Preliminary Report (May 2025), https://leg.wa.gov/JLARC/reports/2025/CannabisMarket/p_a/print.pdf (RAND finding CCRS data is “incomplete and unreliable”).
7. N.Y. OCM, Enforcement, https://cannabis.ny.gov/enforcement (describing the OCM enforcement complaint and inspection workflow).
8. Wash. State Liquor and Cannabis Board (LCB), LCB Enforcement Officer (Lateral)—Statewide, https://www.governmentjobs.com/careers/washington/lcb/jobs/3431663/lcb-enforcement-officer-lateral-statewide (noting Enforcement Division works with approximately 13,000 liquor and cannabis licensees).
9. Cal. State Auditor, Report No. 2024-105, supra note 3 (noting approximately $71 million of DCC’s budget is associated with illicit enforcement activity).
10. N.Y. OCM, 2025 Annual Report (Dec. 31, 2025), https://cannabis.ny.gov/system/files/documents/2025/12/cannabis-control-board-and-office-of-cannabis-management-release-2025-annual-report.pdf (noting 556 dispensaries in 2025).
11. Mass. State Auditor’s Office, Cannabis Control Commission—Finding 2, supra note 5.
12. Id. (noting CCC’s Notice of Deficiency Process requires NOD to be sent to the licensee within 48 hours of inspection).
13. Id. (noting that even accounting for a process exception raised by CCC, the agency would still be in noncompliance).
14. 935 CMR 500.360 (using phrase “reasonable time” without further definition).
15. Mass. State Auditor’s Office, Cannabis Control Commission—Finding 2, supra note 5 (noting in all five fines assessed during the audit period, key procedural steps including issuance of deficiency notices, initiation of enforcement actions, and finalization of stipulated agreements were significantly delayed).
16. Id. (noting hearing officer position vacant from beginning of audit period in July 2022 through June 2024).
17. Id.
18. 935 CMR 500.500(5) (requiring CCC to designate a hearing officer).
19. Mass. State Auditor’s Office, Cannabis Control Commission—Finding 2, supra note 5 (noting CCC “was unable to conduct timely administrative hearings or facilitate the appeals process for licensees”).
20. Id.
21. Mass. State Auditor’s Office, Audit Identifies Mismanagement, Violation of State Regulations and Procedural Inequities at Cannabis Control Commission, Press Release (Aug. 14, 2025), https://www.mass.gov/news/audit-identifies-mismanagement-violation-of-state-regulations-and-procedural-inequities-at-cannabis-control-commission (noting delays may create “inequitable situation, especially for disadvantaged smaller establishments that lack the resources to independently navigate prolonged enforcement processes”).
22. Id.
23. Mass. State Auditor’s Office, Cannabis Control Commission—Finding 2, supra note 5 (noting Hearing Officer began October 20, 2024 and “all matters before the Hearing Officer are current and there is no backlog”).
24. Id.
25. Massachusetts Cannabis Control Commission, Hearings, https://masscannabiscontrol.com/hearings/ (active hearing officer contact listed as of April 2025); Massachusetts Cannabis Control Commission (X/Twitter post, Aug. 2025) (posting Hearing Officer (Contract) position with deadline to apply of August 20, 2025), https://x.com/MA_Cannabis/status/1950987342358954108.
26. 7 Key Takeaways from the Mass. Cannabis Control Commission Audit, Boston.com (Aug. 21, 2025), https://www.boston.com/news/local-news/2025/08/20/cannabis-control-commission-audit-takeaways/ (noting some businesses required to pay fees “while others were inexplicably excused, with no records kept of when or why fees were waived”).
27. State Auditor Finds Widespread Mismanagement at CCC, Boston Globe (Aug. 14, 2025), https://www.bostonglobe.com/2025/08/14/metro/cannabis-control-commission-audit-mass/ (citing $975,000 charitable donation requirement for one Brookline business while another faced no such requirement).
28. 7 Key Takeaways, Boston.com, supra note 26 (noting one new business required to pay over $100,000 in Community Impact Fees before making its first sale; auditor found this favored larger multi-state operators over smaller Massachusetts-based businesses).
29. Cal. State Auditor, Report No. 2024-105, supra note 3 (published August 7, 2025, with cover letter from State Auditor Grant Parks dated August 7 to Governor Newsom).
30. CA Lawmakers Hold Hearing on Cannabis Packaging, Cal NORML, supra note 4 (Joint Legislative Audit Committee oversight hearing February 17, 2026; opened by Chair Harabedian, turned over to Asm. Irwin who originally requested the audit).
31. Cal. State Auditor, Report No. 2024-105, supra note 3.
32. Id.
33. California Could Tighten Cannabis Regulations, Up Penalties After State Audit, Cannabis Business Times, https://www.cannabisbusinesstimes.com/us-states/california/news/15752583/california-could-tighten-cannabis-regulations-up-penalties-after-state-audit (noting auditor reviewed 40 products and found 14 had images of food or candy on packaging; DCC had previously approved some of those products).
34. Id. (reporting 469% increase in California Poison Control System calls related to accidental cannabis ingestion for children 5 and younger, from 148 calls in 2016 to 842 calls in 2023).
35. Cal. State Auditor, Report No. 2024-105, supra note 3 (describing seven-criteria, 0-3 scale scoring tool).
36. Id. (tool still undergoing legal review as of July 2025; DCC will not implement unless included in regulations).
37. Cal. State Auditor, Report Responses: 2024-105 (Nov. 2025), https://www.auditor.ca.gov/reports/responses-2024-105-all/ (State Auditor directing DCC to complete implementation of rubric by August 2026 and make it available to licensees and the public, and include it in regulations).
38. California Could Tighten Cannabis Regulations, Cannabis Business Times, supra note 33 (citing state auditor’s identification of Cherry Pie, Tropicana Punch, and Lemon Cherry Gelato by name).
39. California Cannabis Operators Association (CaCOA), California Cannabis Packaging Rules Are Broken, and CaCOA Has a Fix (Feb. 2026), https://www.cacoa.org/post/california-cannabis-packaging-rules-are-broken-and-cacoa-has-a-fix (testimony at Joint Legislative Audit Committee hearing Feb. 17, 2026; audit of 162 brands found 68% clearly compliant, 22% in gray zone, 10% noncompliant; none of top 20 brands found prohibited).
40. CA Lawmakers Hold Hearing on Cannabis Packaging, Cal NORML, supra note 4 (quoting Dr. Lynn Silver, CDPH task force co-chair: “almost none” of task force’s 2024 recommendations implemented; advocates urging pre-market review process modeled on Oregon’s).
41. California Cannabis Bills for 2026, Cal NORML (Feb. 23, 2026), https://www.canorml.org/cacannabisbills2026/ (listing AB 2249 (Irwin)—Cannabis: youth advertising and marketing; and AB 2532 (Irwin)—Cannabis: packaging and labeling, as bills introduced in response to the audit).
42. Cal. State Auditor, Report No. 2024-105, supra note 3 (finding DCC inspected fewer than half of its licensees annually since 2022 despite an annual inspection goal).
43. Id. (noting DCC submitted a May 2025 budget change proposal requesting funding for additional inspection staff).
44. Cal. Dep’t of Cannabis Control, Performance Audit Report (June 2025), https://oreports.dof.ca.gov/reportPdf/2278/California%20Department%20of%20Cannabis%20Control%20June%202025 (noting compliance inspections are “primarily reactive” and initiated by complaints).
45. Cal. State Auditor, Report No. 2024-105, supra note 3 (finding DCC lacked process for identifying and escalating action against repeat offenders).
46. Id.
47. Cal. State Auditor, Report Responses: 2024-105, supra note 37 (noting DCC Compliance Division establishing policies requiring case files to document licensees’ entire compliance history).
48. Id. (noting DCC directed to specify escalation guidelines by February 2026 and that CLEaR licensing system is being adapted to produce summary compliance history reports).
49. Id. (State Auditor assessment: implementation of rubric in process; deadline August 2026).
50. Cal. DCC, California Tops $1.2 Billion in Illegal Cannabis Seizures, supra note 2 (noting $609 million seized in 2025; cumulative over $1.2 billion since 2022); Cal. Gov.’s Office, California’s Unified Cannabis Enforcement Task Force Seizes Over $254M Worth of Unlicensed Cannabis Products in 2024 (Feb. 2025), https://www.cannabis.ca.gov/2025/02/californias-unified-cannabis-enforcement-task-force-seizes-over-254m-worth-of-unlicensed-cannabis-products-in-2024/ (reporting $254M in 2024 UCETF seizures).
51. Cal. Gov.’s Office, Since January, California Has Seized Over $316 Million in Illicit Cannabis, supra note 2 (describing May 2025 Kern/Kings/Tulare operation: 200+ officers from 15 agencies, 105,700 plants); Cal. DCC, California Tops $1.2 Billion in Illegal Cannabis Seizures, supra note 2 (describing July 2025 Monterey County operation: 38 tons of cannabis worth $125M+).
52. California’s Cannabis Crackdown on Illicit Operators Leaves Underlying Problems Unaddressed, Cannabis Business Times, https://www.cannabisbusinesstimes.com/top-stories/news/15706617/californias-cannabis-crackdown-on-illicit-operators-leaves-underlying-problems-unaddressed (quoting analyst Hirsh Jain; noting seizure total represents roughly 5% of unlicensed market).
53. California Could Tighten Cannabis Regulations, Cannabis Business Times, supra note 33 (citing March 2025 DCC-commissioned report: 11.4 million pounds unregulated vs. 1.4 million pounds regulated in 2024).
54. Id. (noting $4.7 billion in legal sales, ~$7.8 billion in illegal in-state sales, and ~$29 billion shipped out of state based on licensed/unlicensed market share estimates).
55. California’s Cannabis Crackdown, Cannabis Business Times, supra note 52 (noting 57% of California cities and counties do not allow cannabis retail businesses).
56. N.Y. OCM, 2024 Enforcement Report Press Release, supra note 1.
57. Id.
58. New York Cannabis Management Releases 2024 Enforcement Report, Harlem World Magazine (Jan. 8, 2025), https://www.harlemworldmagazine.com/new-york-cannabis-management-releases-2024-enforcement-report-on-illicit-market-actions/ (reporting approximately 350 sealing orders and padlocking of unlicensed storefronts).
59. Id. (noting 72% surge in legal cannabis sales in NYC over 10-week period; $2.6 million increase in weekly retailer revenue following enforcement actions).
60. Harris Sliwoski LLP, NY Office of Cannabis Management Gets New Enforcement Powers, https://harris-sliwoski.com/cannalawblog/new-york-office-of-cannabis-management-gets-new-enforcement-powers/ (summarizing FY2025 budget enforcement provisions).
61. Id. (describing Class A misdemeanor for unlicensed sales; civil penalties up to $10,000/day; additional penalty up to five times revenue from prohibited activities).
62. Id. (describing new DOF authority to levy civil penalties and new tax fraud crime for willful failure to remit cannabis taxes).
63. N.Y. OCM, Press Release: OCM Enforcement to Date (Aug. 14, 2025), supra note 1 (noting nearly 500 enforcement actions, 488 sealing orders, approximately 2,000 inspections, and $125 million in cumulative seizures through August 2025).
64. N.Y. OCM, 2025 Annual Report, supra note 10 (reporting 2,017 enforcement actions in 2025; over $20 million illicit cannabis seized; 248 inspections, 180 Notices of Violation, 89 Orders to Seal through December 2025).
65. See, e.g., N.Y. OCM, Press Release: Warren County and Saugerties Enforcement Actions (Nov. 26, 2025), https://cannabis.ny.gov/system/files/documents/2025/11/warren-county-and-saugerties-enforcement-release.pdf (OCM enforcement in Warren County involving padlocking of three unlicensed locations in coordination with Warren County Sheriff’s Office).
66. Hudson Valley Cannabis News, Rockland County Business Journal (Dec. 28, 2025), https://rcbizjournal.com/2025/12/26/hudson-valley-cannabis-news/ (describing OCM enforcement failure on Omnium case resulting in failed product recall and withdrawn disciplinary action).
67. Id. (reporting Acting Executive Director Felicia Reid removed at Hochul’s request December 14, 2025).
68. N.Y. OCM, Enforcement, supra note 7 (describing Office of Administrative Hearings with ALJs conducting hearings for enforcement actions and licensing appeals).
69. Id.
70. Wash. State Auditor’s Office, Evaluating Oversight of the Cannabis Industry: Follow-Up Issues, supra note 6 (The Daily Chronicle (Oct. 24, 2024), https://www.chronline.com/stories/washington-state-auditors-report-shows-shortcomings-in-cannabis-industry,364371, characterizing turnover rate as “alarming” at around 50%).
71. Wash. State Liquor and Cannabis Board, LCB Enforcement Officer 1 (In-Training)—Statewide, https://www.governmentjobs.com/careers/washington/lcb/jobs/3432590/lcb-enforcement-officer-1-in-training-statewide (describing in-training requirements before full independent deployment).
72. Wash. State Office of Financial Management, State of Washington Class Specification: LCB Enforcement Officer(revised June 23, 2025), https://ofm.wa.gov/state-human-resources/compensation-job-classes/ClassifiedJobListing/Specifications/1141 (noting incumbents require commissioned police powers under RCW 43.101.080).
73. Wash. State LCB, LCB Enforcement Officer Recruit (In-Training)—Statewide (recruitment posting), https://www.governmentjobs.com/careers/washington/lcb/jobs/3432590/lcb-enforcement-officer-recruit-in-training-statewide (noting hiring process begins through Public Safety Testing).
74. Wash. State Auditor’s Office, Evaluating Oversight of the Cannabis Industry: Follow-Up Issues, supra note 6 (noting enforcement officers lack real-time tracking information from CCRS).
75. Wash. LCB, Cannabis Central Reporting System FAQ, https://lcb.wa.gov/ccrs/faq (licensees must submit public records requests to view their own CCRS data).
76. JLARC, Cannabis Market Study Preliminary Report (May 2025), supra note 6 (RAND finding CCRS data is “incomplete and unreliable”; RAND unable to use CCRS data to determine actual cannabis produced and sold).
77. Id. (identifying four specific data failures: incomplete sales records; limited ability to link inventory, product detail, and sales records; unreliable weight data for wholesale cannabis; and inability to support data-driven regulation).
78. Id. (“LCB has not had a usable traceability system since 2017. That was the last year for which reliable data about cannabis production and sales was available.”).
79. Id. (JLARC Recommendations 1 and 2: LCB to submit plan by December 31, 2025 identifying data elements needed and resources required to collect accurate data from licensees by December 31, 2026; Legislature should consider additional equity measures).
80. Wash. State Auditor’s Office, State’s Cannabis Tracking System Falls Short of Long-Sought Goals, Audit Finds(Oct. 22, 2024), https://sao.wa.gov/the-audit-connection-blog/states-cannabis-tracking-system-falls-short-long-sought-goals-audit-finds (reporting CCRS reported $7.7 billion in 2022 sales vs. Department of Revenue estimate of $1.3 billion).
81. Wash. State Auditor’s Office, Evaluating Oversight of the Cannabis Industry: Follow-Up Issues, supra note 6 (noting new alerts for no-activity reporting and failed lab tests); Wash. LCB CCRS Update (Oct. 1, 2025), https://content.govdelivery.com/accounts/WALCB/bulletins/3f464de (announcing new required reporting function in CCRS live October 1, 2025).
82. JLARC, Cannabis Market Study, supra note 6 (“LCB estimates that it will fully implement a new system by 2031. Until a new system is in place, LCB will likely continue to have incomplete and unreliable data with which to regulate the cannabis industry.”).
83. Wash. State Auditor’s Office, Evaluating Oversight of the Cannabis Industry: Follow-Up Issues, supra note 6 (describing updated complaint prioritization: health/safety threats to enforcement officers; regulatory matters to compliance consultants with escalation pathway).
84. Id. (noting LCB began conducting proactive “premises checks”).
85. JLARC, Cannabis Market Study, supra note 6 (confirming data infrastructure inadequacy remains unresolved); Wash. State Auditor’s Office, State’s Cannabis Tracking System Falls Short, supra note 80 (noting 2018 audit recommendation for risk-based automated enforcement tools remains unimplemented).
86. Md. Dep’t of Legislative Services, Audit Report: Alcohol, Tobacco, and Cannabis Commission (Apr. 2025), https://dls.maryland.gov/pubs/prod/NoPblTabPDF/ATCC25.pdf.
87. Md. ATCC, Cannabis, https://atcc.maryland.gov/industry/cannabis/ (describing ATCC as enforcement arm for unlicensed cannabis while MCA handles licensing and regulation).
88. Md. Cannabis Administration, FY 2025 Budget: Regulation, Enforcement, and Compliance Program, https://mgaleg.maryland.gov/pubs/budgetfiscal/2025fy-budget-docs-operating-D23-Maryland-Cannabis-Administration.pdf (describing MCA’s enforcement contract with ATCC worth $2.9 million in FY 2025).
89. Md. Dep’t of Legislative Services, Audit Report: ATCC, supra note 86 (finding ATCC did not properly segregate collection and licensing duties).
90. Id. (noting collection processing transferred from Comptroller of Maryland to ATCC effective July 1, 2023).
91. Id. (noting the employee who recorded collections was also responsible for verifying deposit—a condition under which misappropriation could occur without ready detection).
92. Id. (noting three of nine employees who could issue or renew licenses also processed collections).
93. Id. (ATCC management attributed condition to “limited staffing”).
94. Id. (noting $3.3 million in ATCC collections during July 1, 2023 through June 30, 2024, primarily checks and money orders for licensing fees and fines).
95. Md. ATCC, THC Compliance Standards (eff. July 1, 2025), https://atcc.maryland.gov/cannabis-information/thc-compliance-standards/ (describing SB 0214 and HB 0012 requirements effective July 1, 2025).
96. Id. (noting products above 0.5 mg THC per serving or 2.5 mg per package must be sold through licensed dispensaries).
97. Id. (ATCC authorized to seize, destroy, or confiscate noncompliant THC products and issue citations for sales to minors).
98. Md. ATCC, Maryland Appellate Court Lifts Injunction on THC Enforcement (Sept. 15, 2025), https://atcc.maryland.gov/cannabis-information/maryland-appellate-court-lifts-injunction-on-thc-enforcement/ (Governor Wes Moore, et al. v. Maryland Hemp Coalition et al., No. 1590, September Term 2023, 2025 WL 2602274 (Md. App. Ct. Sept. 9, 2025), reversing Washington County Circuit Court’s October 2023 preliminary injunction).
99. Vicente LLP, Maryland Court Ends Hemp Sales Loophole (Sept. 26, 2025), https://vicentellp.com/insights/maryland-court-ends-hemp-sales-loophole/ (quoting appellate court finding that synthetic intoxicating THC products “are now and have always been illegal in Maryland”).
100. 100.Regulators Ready to Enforce Cannabis Laws on Hemp THC Retailers in Maryland, Cannabis Business Times (Sept. 2025), https://www.cannabisbusinesstimes.com/us-states/maryland/news/15755453/regulators-ready-to-enforce-cannabis-laws-on-hemp-thc-retailers-in-maryland (noting injunction had prevented ATCC enforcement for nearly two years; hemp retailers now subject to all provisions of the Cannabis Reform Act).
101. 101.Md. ATCC, Maryland Appellate Court Lifts Injunction, supra note 98.
102. 102.Vicente LLP, Maryland Court Ends Hemp Sales Loophole, supra note 99 (fines up to $5,000 per offense, enhanced to $10,000 for offenses involving THC products; potential adverse effects on other state licenses).
103. 103.Maryland 2025: Appellate Court Upholds Hemp-Derived Product Restrictions, Cannabis Regulations AI (2025), https://www.cannabisregulations.ai/cannabis-and-hemp-regulations-compliance-ai-blog/maryland-appeals-court-upholds-hemp-restrictions-2025 (describing scope of delta-8, delta-10, and HHC product enforcement following injunction lift).
104. 104.Cal. State Auditor, Report No. 2024-105, supra note 3.
105. 105.JLARC, Cannabis Market Study, supra note 6 (RAND concluding CCRS data is incomplete and unreliable, confirming 2024 State Auditor finding); Wash. State Auditor’s Office, Evaluating Oversight of the Cannabis Industry: Follow-Up Issues, supra note 6.
106. 106.Mass. State Auditor’s Office, Cannabis Control Commission—Finding 2, supra note 5.
107. 107.California Could Tighten Cannabis Regulations, Cannabis Business Times, supra note 33 (noting Governor Newsom signed legislation to roll back excise tax rate to 15 percent, halting planned increase to 19 percent, in response to regulated market competitiveness concerns); Cal. DCC Rulemaking, https://www.cannabis.ca.gov/cannabis-laws/rulemaking/ (confirming regulatory updates effective January 1, 2026).