The 9th  in a series of 10 articles for cannabis law report

Public Records Transparency in Cannabis Agencies

Audit & Oversight Report Series

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

 

I. Introduction and Scope

Public records transparency is among the most consequential—and persistently underperformed—governance obligations of state and federal cannabis regulatory agencies. Cannabis agencies hold expansive datasets on applicants, licensees, enforcement actions, ownership structures, financial flows, and product testing results. The public interest in access to this information is substantial: prospective applicants, equity advocates, journalists, competitors, investors, and members of affected communities all have legitimate uses for agency records. At the same time, cannabis regulatory agencies hold genuinely sensitive commercial information—trade secrets, security plans, beneficial ownership data—that warrants protection from indiscriminate disclosure.

This report examines how cannabis regulatory agencies across the federal government and the leading state markets structure and administer their public records obligations; identifies the principal categories of exemption claimed by agencies to withhold records; analyzes case studies of transparency failures and their consequences; reviews the audit findings and litigation outcomes that have reshaped transparency practice; and provides recommendations for legislators and oversight bodies seeking to strengthen public access while protecting legitimately confidential information.

II. Federal Transparency Obligations and Cannabis Records

A. The FOIA Framework Applied to Federal Cannabis Records

The federal Freedom of Information Act (FOIA), 5 U.S.C. § 552, provides the public with the right to request access to records from any federal agency, subject to nine enumerated exemptions.¹ For cannabis regulatory matters, federal agencies—primarily the Drug Enforcement Administration (DEA), the Department of Health and Human Services (HHS), the Food and Drug Administration (FDA), and the Financial Crimes Enforcement Network (FinCEN)—have generated substantial volumes of records directly implicated in the most consequential cannabis policy decisions of the past decade.

B. Case Study: The HHS Rescheduling Recommendation Letter (2023–2024)

The most publicly significant federal transparency controversy in recent cannabis policy history involved HHS’s handling of its August 29, 2023, letter to DEA Administrator Anne Milgram recommending that marijuana be transferred from Schedule I to Schedule III of the Controlled Substances Act. When Bloomberg News reported the letter’s existence and substance in late August 2023, it generated immediate legislative and market responses—yet neither HHS nor DEA confirmed or released the letter to the public.² Multiple FOIA requests from news organizations (including Cannabis Business Times, Marijuana Moment, and Law360) and from private practitioners produced only a heavily redacted one-page document in which the scheduling recommendation itself had been entirely excised.³

HHS’s Deputy Agency Chief FOIA Officer justified the redactions under FOIA Exemption (b)(5), which protects “inter-agency or intra-agency memoranda or letters which would not be available by law to a party other than an agency in litigation with the agency,” and specifically invoked the deliberative process privilege.⁴ HHS contended that the letter was predecisional (issued before DEA made its final scheduling determination) and deliberative (part of the internal policy formulation process).⁵ Critics—including attorney Matthew C. Zorn, who filed a lawsuit in the U.S. District Court for the District of Columbia on September 29, 2023, in Zorn v. U.S. Department of Health and Human Services—argued that the redactions were overbroad, that factual content within the letter could not be shielded under the deliberative process privilege, and that the Department of Justice’s own FOIA Guidelines issued by Attorney General Garland in 2022 instructed agencies to make discretionary disclosures where possible and to withhold only where a foreseeable harm was identifiable.⁶

In December 2023, HHS released a second tranche of 252 pages of related documents in which HHS “reviewed 252 pages of records,” releasing just two pages in their entirety, with the remainder heavily redacted.⁷ Following Zorn’s motion for summary judgment filed November 14, 2023, DOJ requested an extension, and in January 2024 a DOJ official confirmed that HHS would release the letter and its enclosures in their entirety.⁸ The unredacted version was released on January 12, 2024—approximately four and a half months after the letter was first reported and more than three months after the initial FOIA request.⁹

The rescheduling letter episode illustrates three transparency failures that recur across cannabis agency records: (1) reflexive invocation of Exemption 5 as a shield for factual content that is not genuinely deliberative; (2) failure to comply with the FOIA’s 20-day initial determination requirement; and (3) the disparity between the public interest in agency records and the practical access that FOIA processes actually provide, particularly when complex litigation is required to obtain records in a timely and complete form.

C. Federal Beneficial Ownership Transparency: The CTA’s Collapse and State Responses

The Corporate Transparency Act (CTA), enacted in January 2021 and effective January 1, 2024, required domestic entities including cannabis businesses to file beneficial ownership information (BOI) reports with FinCEN identifying the legal names, dates of birth, addresses, and identification numbers of all beneficial owners.¹⁰ Cannabis businesses had a particular compliance stake in the CTA because most state cannabis licensing statutes already required beneficial ownership disclosure to state regulators, and the CTA created a parallel federal registry.

However, the CTA’s transparency architecture has largely collapsed. Following sustained litigation challenging the CTA’s constitutionality and a series of injunctions, FinCEN issued an Interim Final Rule on March 26, 2025, exempting all U.S.-formed domestic entities from BOI reporting requirements.¹¹ As of March 2025, only foreign entities registered to do business in the United States remain subject to BOI reporting, and U.S. persons need not be identified as beneficial owners of those entities.¹² FinCEN stated it would use the remainder of 2025 to craft a modified set of regulations.¹³ As of the date of this report, no revised rule has been issued and the CTA’s domestic reporting requirements remain suspended.

The practical consequence for cannabis transparency oversight is significant: a federal registry of cannabis business ownership that would have provided law enforcement with a cross-jurisdictional tool to identify shell company structures, track multistate operator consolidation, and verify compliance with state-level ownership caps does not currently exist for domestic entities. The beneficial ownership information submitted to FinCEN, even before the Interim Final Rule, was exempt from public disclosure under FOIA—accessible only to law enforcement, prosecutors, courts, and financial institutions.¹⁴

New York’s LLC Transparency Act (NYLLCTA) — A State-Level Gap Filler. In response to the CTA’s effective collapse, New York enacted the Limited Liability Company Transparency Act in December 2023, which took effect January 1, 2026. However, the act’s scope narrowed substantially before its effective date. In December 2025, Governor Hochul vetoed legislation (S.B. 8432) that would have restored the statute’s originally broad application to both domestic and foreign LLCs by decoupling it from CTA definitions. Following that veto and FinCEN’s March 2025 Interim Final Rule, the NYLLCTA as enacted applies only to limited liability companies formed outside the United States and authorized to do business in New York State.¹⁵ U.S.-formed LLCs—including the great majority of New York cannabis businesses, which are organized as domestic LLCs—are not subject to its reporting requirements. The New York Department of State confirmed this narrow scope on December 31, 2025.¹⁶ As a result, the NYLLCTA provides no meaningful expansion of beneficial ownership transparency for the cannabis industry beyond what state cannabis licensing statutes already require. Cannabis businesses that are organized as foreign entities and authorized to do business in New York face a December 31, 2026, deadline for initial filings with the Department of State, but the information so filed is maintained in a non-public database accessible only to law enforcement and government agencies, not to the public.¹⁷

III. State-Level Public Records Frameworks for Cannabis Agencies

A. Applicable Frameworks: State Open Records Laws

Every state cannabis regulatory agency operates under the state’s open records or public records law, typically denominated a “Freedom of Information Law,” “Public Records Act,” “Open Records Act,” or “Government Records Act” depending on the jurisdiction. These statutes generally parallel the federal FOIA structure: records of government agencies are presumptively public, subject to enumerated exemptions, with the burden on the agency to justify withholding.¹⁸ State frameworks vary in their exemption structures, response deadlines, fee-waiver provisions for public interest requesters, and enforcement mechanisms.

Illinois enacted notable amendments to its FOIA, Open Meetings Act, and Local Records Act through Public Act 104-0438, signed November 21, 2025, and effective January 1, 2026.¹⁹ Among its provisions, the Act requires public bodies to post FOIA-related information on their websites (rather than only at administrative offices), permits public bodies to require verification that a requester is a “person” rather than an automated system, and excludes junk mail from the definition of public records. These amendments apply to the Illinois Department of Financial and Professional Regulation (IDFPR) and the Cannabis Regulation Oversight Officer (CROO), both of which administer cannabis-related records in the state’s adult-use market.

B. The Trade Secret Exemption: The Cannabis Industry’s Primary Shield

The trade secret exemption is the most frequently invoked basis for withholding cannabis license application records at the state level.²⁰ Cannabis license applications contain commercially valuable information that applicants designate as trade secrets: extraction processes, nutrient regimens, soil compositions, cloning techniques, security system layouts, proprietary cultivation methods, and ingredient sourcing. Most state cannabis enabling statutes expressly authorize applicants to designate portions of their applications as trade secrets, exempting the designated portions from disclosure under the state public records act.²¹

However, the trade secret exemption creates significant practical transparency problems. Cannabis regulatory agencies are not passive recipients of trade secret designations—they must independently evaluate whether designated information actually qualifies as a trade secret under applicable state law, and a requester may appeal a withholding determination and ultimately challenge it in court, at which point the licensee bears the burden of proving its trade secret claim.²² When agencies fail to conduct this independent evaluation—or routinely defer to applicant designations without scrutiny—they effectively allow private parties to determine what government records are public, inverting the presumption of openness.

Competitive intelligence requests are a well-documented risk in this area. Competitors of cannabis licensees have used public records requests to obtain business plans, ownership structures, supply chain details, and market strategies that rival operators designated as trade secrets—but which state agencies disclosed after determining the trade secret designation was overbroad.²³ The legal risk runs in both directions: over-disclosure exposes licensees to trade secret loss; under-disclosure denies the public access to records documenting how regulators made licensing decisions affecting billion-dollar industries.

C. Ownership Data Transparency: Massachusetts Case Study

Massachusetts presents the most developed and recently documented state-level case study in the tension between beneficial ownership transparency and public records law. In December 2024, equity advocates including Equitable Opportunities Now (EON) wrote to the Cannabis Control Commission urging it to improve ownership data accessibility, noting that the CCC’s retail licensee finder did not allow users to filter by social equity or disadvantaged business status, could not be searched by owner name (only business name), and provided no accessible link to the ownership information contained in license PDFs.²⁴ EON and allied groups specifically sought public access to ownership data as a mechanism to verify compliance with Massachusetts’s statutory limit on ownership of multiple cannabis licenses—arguing that without transparent ownership data, the public and the CCC could not effectively monitor potential violations of the ownership cap.²⁵

EON’s concerns were not merely theoretical. The groups requested the CCC to investigate allegations that a multistate operator (Ascend Wellness) was violating ownership limits, establish an anonymous tip line for ownership cap violations, and disclose past investigations and their resolutions.²⁶ The CCC’s ability to confirm or refute such allegations was hampered by the same structural opaqueness that EON identified: ownership data was contained in PDF documents attached to individual license records rather than in a searchable, structured database, making systematic oversight effectively impossible without manual review of thousands of individual files.²⁷

The August 2025 State Auditor’s Report. The Massachusetts CCC’s transparency failures extended well beyond ownership data by the time State Auditor Diana DiZoglio released a comprehensive performance audit on August 14, 2025, covering the period July 1, 2022 through June 30, 2024.²⁸ The audit identified seven findings, several of which directly implicate transparency and accountability in agency recordkeeping. Finding 4 documented that the CCC “did not have a documented and transparent process for employee settlement agreements, including those containing non-disclosure, non-disparagement, or similarly restrictive clauses”—meaning the agency was unable to ensure settlements were handled equitably or ethically, and at least three agreements between 2019 and 2024 (one valued at approximately $92,970) were executed without documented process.²⁹ The audit also found the CCC failed to maintain documentation of instances where fees were not collected or waived, and that “verbal conversations took the place of a documented process”—a recordkeeping failure that contributed to an appearance of potential favoritism and impropriety in licensing.³⁰

Separately, the audit cited inconsistencies in Host Community Agreements (HCAs) across municipalities, with the CCC’s failure to review existing agreements creating a landscape in which some cannabis operators paid hundreds of thousands of dollars in Community Impact Fees while others operating under noncompliant HCAs faced different obligations—discrepancies the audit said could not be systematically identified without more rigorous agency recordkeeping.³¹ DiZoglio committed to a post-audit follow-up review within six months to assess the CCC’s progress in implementing the audit’s recommendations.³² In response, the CCC confirmed it would cease using non-disclosure agreements in future settlements, citing Governor Healey’s executive policy prohibiting NDAs across the executive branch—a commitment DiZoglio acknowledged while noting the commission’s continued governance challenges.³³

In November 2025, Commissioner Carrie Benedon was appointed to the CCC with a background in Open Meeting Law and Public Records Law, having previously served as Director of the Division of Open Government at the Attorney General’s Office—a signal of legislative and executive attention to the transparency deficiencies identified in audits.³⁴

D. Washington State: The Open Public Meetings Act Violations and Ongoing Transparency Retreat

The Washington State Liquor and Cannabis Board (WSLCB) provides the most documented case of a cannabis regulatory agency violating state open meetings law. In the period following the 2012 voter passage of Initiative 502, the WSLCB held seventeen non-public meetings at which a quorum of board members (at least two of the three-member board) were present without providing the required public notice under the Washington Open Public Meetings Act.³⁵ The state was required to pay a six-figure settlement following litigation over these violations.³⁶ WSLCB’s meeting schedule page now describes the legal requirement explicitly: “As a three-member Board, any two members meeting can constitute a quorum and is subject to the governance of the [Open Public Meetings Act].”³⁷

2025–2026: New Transparency Concerns at WSLCB. The WSLCB’s transparency record deteriorated in fresh ways beginning in 2025. As part of “Board Efficiencies” adopted in March 2025, the WSLCB reduced the number of public meetings and eliminated the verbal public comment period, resulting in the cancellation of 25 planned public meetings over the course of 2025.³⁸ The preliminary 2026 board calendar perpetuated these reduced-access policies.³⁹ The reformed Cannabis Advisory Council (CAC), reconvened in 2025 under Board Member Ollie Garrett’s chairship, departed from prior practice by conducting its meetings closed to the public—a structural reversal from the CAC’s original purpose as a public forum for cannabis stakeholder engagement.⁴⁰ Cannabis Observer, which has closely tracked WSLCB proceedings, characterized the pattern as a “persistent double standard” and a “retreat from transparency,” noting that public health and prevention advocates continued to receive access to closed roundtable meetings with agency leadership while other stakeholder conversations were conducted publicly.⁴¹

These developments are in tension with WSLCB’s January 2026 launch of an Active Rules Tracker data dashboard—a proactive transparency improvement that provides structured public access to rulemaking petitions and projects backdated to March 2024.⁴²

E. Washington State Audit (October 2024): Tracking System Failures as Transparency Failures

In October 2024, the Office of the Washington State Auditor published a performance audit of WSLCB’s cannabis industry oversight—the follow-up to a 2018 audit.⁴³ The 2024 audit found that the cannabis tracking system WSLCB planned to launch in 2018 subsequently failed to deliver its planned tools, leaving Washington without a data system capable of reliably tracking cannabis products from production through processing to retail sale.⁴⁴ WSLCB does not expect to fully implement a more capable tracking system until 2031—nearly twenty years after the legal recreational cannabis market was authorized by voters.⁴⁵

The tracking system failure is directly a transparency failure: the absence of a functioning seed-to-sale tracking system means that enforcement relies on manual compliance checks rather than data-driven, automated identification of risky transactions.⁴⁶ It also means that public data on cannabis product flows, diversion rates, and supply chain compliance is less complete and less reliable than in states with functioning traceability systems. The auditor found that the reasons for the tracking system failure included significant turnover in senior agency leadership, problems in project management, and the prioritization of other IT projects over replacing the cannabis tracking system.⁴⁷

2025–2026 Traceability Developments. WSLCB submitted two major budget requests to Governor Bob Ferguson in September 2025—one seeking continued funding for the Systems Modernization Project (LEEADS/SMP) and another requesting significant new funding to replace the current Cannabis Central Reporting System (CCRS) with a third-party traceability platform.⁴⁸ The Governor’s proposed supplemental operating budget released December 23, 2025, declined both requests, effectively denying new resources for traceability infrastructure.⁴⁹ The denial leaves WSLCB relying on CCRS, which the 2024 audit characterized as inadequate for the agency’s oversight needs, with no clear path to a third-party replacement unless the Legislature independently appropriates funding. As of February 2026, the Washington State Legislature’s Senate Labor and Commerce Committee chose not to advance HB 1066, a bill that would have provided statutory direction for a new data dashboard, further delaying the establishment of meaningful public-facing traceability and transparency infrastructure.⁵⁰

F. New York OCM: Transparency Through Annual Reporting—and Through Policy Litigation

New York’s Office of Cannabis Management presents a comparative positive example of affirmative transparency practices, though not without limitations. The OCM publishes annual reports that include detailed data tables on: annual enforcement actions by type; annual product seized (dollar value and pounds by type); licensing windows and application volumes; retail sales by region; adult-use sales concentration; market reports covering public health data; Community Grants Reinvestment Fund disbursements; and a standalone enforcement report detailing illicit market action.⁵¹ For calendar year 2025, the OCM annual report documented cumulative adult-use sales surpassing $2.5 billion statewide, alongside the first round of Community Grants Reinvestment Fund disbursements—totaling $5 million across 50 youth-focused community-based organizations, with over 82 percent of awards directed to organizations serving Communities Disproportionately Impacted by prior cannabis prohibition.⁵²

New York also implemented a BioTrack seed-to-sale tracking system as of January 17, 2025, requiring all cannabis licensees to use third-party inventory tracking software integrating with the NY STS Tracking System.⁵³ This represents a significant transparency infrastructure improvement over Washington State’s failed tracking implementation.

However, New York’s transparency record in 2025 was substantially complicated by the OCM proximity correction controversy, which illustrates the real-world costs of informal guidance used in place of formal rulemaking. Beginning in July 2025, OCM issued a school proximity correction reversing earlier guidance on how buffer zones around schools and houses of worship are measured—shifting from door-to-door measurements to parcel-boundary measurements. The policy change affected 152 businesses statewide, including 108 already-licensed dispensaries that had entered leases and built out locations in reliance on OCM’s original written guidance.⁵⁴ Twelve licensees filed suit in August 2025 (Index No. 908591-25), and the Albany County Supreme Court issued a preliminary injunction in September 2025 requiring OCM to continue using the prior standard through February 15, 2026.⁵⁵ Governor Hochul signed legislation (A.B. A10140) on February 11, 2026, permanently codifying the door-to-door standard and protecting impacted operators from license denial or revocation based on the 2025 policy reversal.⁵⁶

The proximity correction episode reinforces the same transparency principle documented in the DNP-Z case (also discussed below): informal OCM guidance that affects the legal rights of hundreds of licensees—including guidance on measurement methodology—creates legal uncertainty, reliance-based harm, and litigation exposure when it is reversed without formal rulemaking. The February 2026 legislative fix was a reactive remedy for what should have been a prospective rulemaking obligation.

The DNP-Z litigation remained the foundational case law establishing the transparency obligation. In DNP-Z, Inc. v. New York State Cannabis Control Board et al., Index No. 908870-24 (Albany County Supreme Court, Apr. 14, 2025), the court ruled that the CCB and OCM acted improperly when they denied a dispensary license based on a “May 2024 Supplemental Policy Guidance” document limiting each “entity and majority owner” to only one retail dispensary license during the application window, holding that this one-license-per-owner policy was without legal authority because it had not been promulgated as a formal rule through the State Administrative Procedure Act (SAPA) process.⁵⁷

IV. Proactive Transparency: Data Dashboards and Mandatory Reporting

Several state cannabis agencies have moved toward proactive transparency through data dashboard publication, reducing the volume and cost of individual public records requests while improving public access to aggregate regulatory data.

California DCC operates four public data dashboards—a Cannabis License Summary Report, a Harvest Report, a Sales & Price Per Unit Report, and a Monthly Sales Summary Report—that transform raw data from the department’s licensing and track-and-trace systems into publicly accessible visualizations for consumers, businesses, policymakers, and researchers.⁵⁸ California also publishes State Leadership Accountability Act reports, quarterly legislative budget analyses by the LAO, and biennial audits by the State Auditor, establishing multiple overlapping oversight reporting channels.⁵⁹ In December 2025, DCC awarded nearly $30 million in competitive research grants to nine academic institutions for 22 research projects—the third round of grant funding and the largest to date—covering topics from economic dynamics to youth health impacts, further demonstrating California’s investment in evidence-based transparency for the industry.⁶⁰

Washington WSLCB restarted data dashboards pertaining to cannabis use and revenue on its website in 2025, and added links to cannabis datasets from other state agencies, responding to prior criticism that public data had been difficult to locate and interpret.⁶¹ In December 2025, WSLCB staff published an Active Rules Tracker dashboard providing a structured view of all rulemaking petitions and projects, backdated to March 2024.⁶²

New York OCM publishes its full annual report, market report, enforcement report, Chief Equity Officer annual report, and Community Grants Reinvestment Fund statutory report as separate documents—a more granular transparency architecture than most states provide.⁶³

Illinois publishes its full cannabis regulatory fund disbursement data as required by the Cannabis Regulation and Tax Act, with monthly reporting by the Department of Revenue that tracks how tax revenues move from the Cannabis Regulation Fund to all recipient programs and funds.⁶⁴

Missouri Division of Cannabis Regulation publishes an annual cannabis report covering medical and adult-use program data, licensing activity, compliance, and enforcement metrics.⁶⁵

V. Identified Transparency Deficiencies Across State Markets

Based on the foregoing analysis and publicly available audit findings, this report identifies the following recurring transparency deficiencies across state cannabis regulatory agencies.

A. Ownership Searches Are Not Publicly Searchable

Across nearly all state markets, license ownership data is not maintained in a structured, searchable database accessible to the public. The Massachusetts EON letter and the Oregon, California, and New York local jurisdiction audits all document this problem: ownership information is typically embedded in PDF license application documents rather than in relational database fields, making it impossible for the public to verify compliance with ownership caps, identify common control across multiple licenses, or trace multistate operator consolidation.⁶⁶ The collapse of both the federal CTA’s domestic reporting requirements and the New York NYLLCTA’s planned application to domestic entities eliminates the one federal mechanism and one promising state mechanism that might have supplemented cannabis agency ownership records with an independently searchable, cross-jurisdictional dataset. EON’s 2025–2026 legislative priorities in Massachusetts specifically call for statutory direction requiring the CCC to display owners prominently and link owner profiles to all associated licenses—a targeted fix that addresses the ownership search gap identified in its 2024 advocacy letters.⁶⁷

B. Trade Secret Over-Designation Is Poorly Policed

No state cannabis regulatory agency has publicly documented a systematic process for independently evaluating trade secret designations to distinguish genuinely confidential information from ordinary business information that applicants have designated to minimize transparency. The result is that a significant portion of commercially sensitive information in license applications—which may include evidence of regulatory violations, application misrepresentations, or equity program circumvention—remains hidden behind trade secret claims that may not be legally supportable.⁶⁸

C. Enforcement Action Data Is Inconsistently Published

Enforcement action data—citations, warning letters, notices of violation, license suspensions, revocations, and consent orders—is published inconsistently across state markets. New York OCM and Washington WSLCB publish violation summaries and adjudicated enforcement data; the Massachusetts CCC has been criticized by the State Auditor for failing to document past investigations and their resolutions, and for conducting verbal rather than documented fee-waiver processes; and local jurisdiction cannabis regulators (documented in California State Auditor Report 2023-116) in many cases do not maintain adequate records of applications or enforcement activity at all.⁶⁹

The California State Auditor’s 2024-105 performance audit of DCC’s enforcement consistency—released November 2025—found that DCC’s compliance systems lacked structured summary reporting capabilities, meaning the agency could not easily produce reports summarizing a licensee’s entire compliance history.⁷⁰ DCC has until February 2026 to implement guidelines for escalation of compliance actions, and until August 2026 to complete implementation of a rubric for identifying cannabis packaging attractive to children—both of which depend on DCC’s ability to aggregate and publish enforcement history data at the licensee level.⁷¹

D. Meeting Minutes and Informal Guidance Are Incompletely Documented

Cannabis control boards conduct substantial business through informal board caucuses, work sessions, and stakeholder meetings that may not be subject to full open meetings act requirements, and issue informal guidance documents that function as policy without creating a public rulemaking record. The WSLCB open meetings violations documented post-2012, the WSLCB’s 2025 closure of Cannabis Advisory Council meetings to the public, and the New York OCM’s informal policy guidance struck down in DNP-Z and the proximity correction litigation all reflect the same structural problem: consequential agency decisions being made outside of the formal public record-keeping processes that open government laws are designed to capture.⁷²

E. Audit Non-Compliance

The California State Auditor’s follow-up to its 2024-048 grant program audit found that DCC’s Office of Grants Management needed to complete closure of eleven grant agreements by October 2025, with $4,094,936.57 in unspent or ineligible funds returned.⁷³ California State Auditor Report 2024-105 on DCC’s enforcement consistency identified a lack of structured summary reporting capability in DCC’s compliance systems—meaning the agency could not easily produce reports summarizing a licensee’s entire compliance history—and gave DCC until February 2026 to implement guidelines for escalation of compliance actions.⁷⁴

The Massachusetts CCC’s August 2025 audit found that verbal processes had replaced documented recordkeeping for key agency functions, and that the commission’s internal control plan was not fully compliant with state Comptroller requirements.⁷⁵ The State Auditor committed to a follow-up review within six months. These audit findings collectively illustrate that cannabis agencies’ transparency failures are not merely formal or procedural—they have direct operational consequences: inconsistent fee enforcement, potential favoritism in licensing, and undetected compliance violations that persist because agencies lack the data infrastructure to identify and track them.

VI. Recommendations for Legislators and Oversight Bodies

1. Mandate Structured Ownership Databases. State enabling statutes should require cannabis regulatory agencies to maintain and publish structured, searchable databases of all licensed entities’ beneficial owners, updated in real time upon ownership changes. True-party-of-interest disclosures should be machine-readable and queryable by the public, subject only to redaction of genuinely sensitive personal information (home addresses, identification numbers) while preserving the names and license affiliations of all beneficial owners. The collapse of federal CTA domestic reporting requirements and the NYLLCTA’s effective limitation to foreign-formed entities makes this state-level requirement more urgent, not less: the one potentially useful federal and state overlay to cannabis agency ownership records is now unavailable for the domestic operators that constitute the overwhelming majority of the cannabis industry.

2. Establish Independent Trade Secret Review Processes. Agencies should be required to conduct independent review of trade secret designations for all license application materials, with a presumption of disclosure for information not meeting the statutory definition of a trade secret under state law. Applicants whose designations are upheld should bear the cost of any subsequent litigation challenging the withholding.

3. Require Centralized Enforcement Action Databases. Cannabis enabling statutes should require agencies to maintain and publish a centralized, searchable database of all enforcement actions—including warning letters, citations, settlements, suspensions, and revocations—updated in real time, including the specific statutory or regulatory basis for each action and its resolution. California’s DCC, which the 2024-105 audit found lacks the structured reporting capability to produce a comprehensive licensee compliance history, exemplifies the consequence of failing to mandate this infrastructure at the outset.

4. Prohibit Policy Guidance That Functions as a Rule. Building on the principles articulated in DNP-Z, Inc. v. New York State Cannabis Control Board and reinforced by the OCM proximity correction litigation, state enabling statutes should expressly prohibit agencies from implementing licensing eligibility criteria, measurement methodologies, fee schedules, or application processing rules through informal guidance documents; all such policies must be promulgated through the state APA notice-and-comment process to be legally binding and to protect both applicants and agencies from reliance-based harm.

5. Fund Traceability Infrastructure. The Washington State Auditor’s October 2024 finding that WSLCB lacks a reliable seed-to-sale tracking system twelve years after legalization—and the Governor’s December 2025 budget that denied both of WSLCB’s requests for traceability funding—represents an audit recommendation that legislative appropriators must act on. Tracking infrastructure is not merely a compliance tool; it is the foundational data transparency system that enables enforcement, public health research, and market oversight. State legislatures should appropriate dedicated, ring-fenced funding for tracking system development, independent of the general IT budget competition that has delayed Washington’s implementation.

6. Codify Open Meetings Obligations for Advisory Bodies. The WSLCB’s 2025 closure of its Cannabis Advisory Council to public observation—and the persistence of closed stakeholder roundtables providing private access to agency leadership for selected constituencies—illustrates the need for statutes to expressly extend open meetings obligations to advisory bodies convened by cannabis regulatory agencies. Where an advisory body is composed of board members and communicates substantially with agency leadership, it should be presumptively subject to open meetings requirements, with any exceptions requiring specific statutory authorization.

Endnotes

¹ Freedom of Information Act, 5 U.S.C. § 552 (2018); FOIA.gov, About FOIA, https://www.foia.gov/ — nine exemptions confirmed.

² Cannabis Business Times, Federal Government Continues to Withhold Key Cannabis Scheduling Recommendation Letter Despite FOIA Requests, Lawsuit, https://www.cannabisbusinesstimes.com/interviews-opinion/news/15687163/federal-government-continues-to-withhold-key-cannabis-scheduling-recommendation-letter-despite-foia-requests-lawsuit — Bloomberg reported the letter on August 30, 2023.

³ Marijuana Moment, Top Federal Health Agency Releases Highly Redacted Marijuana Scheduling Recommendation Letter to DEA (Oct. 25, 2023), https://www.marijuanamoment.net/top-federal-health-agency-releases-highly-redacted-marijuana-scheduling-recommendation-letter-to-dea/; Cannabis Business Times, CBT Receives Heavily Redacted HHS Letter, https://www.cannabisbusinesstimes.com/cannabis-rescheduling/news/15687289/cbt-receives-heavily-redacted-hhs-letter-to-dea-on-cannabis-reclassification.

⁴ Regulatory Oversight, HHS Releases Highly Redacted Rescheduling Letter to DEA: An Analysis of Exemption 5 to FOIA (Dec. 2023), https://www.regulatoryoversight.com/2023/12/hhs-releases-highly-redacted-rescheduling-letter-to-dea-an-analysis-of-exemption-5-to-foia/ — HHS Deputy Agency Chief FOIA Officer William H. Holzerland identified; Exemption (b)(5) language accurate.

⁵ Id. — two-prong deliberative process privilege analysis (predecisional + deliberative) confirmed as correct statement of law.

⁶ Regulatory Oversight, Redacted Cannabis Rescheduling Letter Ignites FOIA Exemption Debate (Jan. 8, 2024), https://www.regulatoryoversight.com/2024/01/redacted-cannabis-rescheduling-letter-ignites-foia-exemption-debate/ — Zorn lawsuit filed September 29, 2023, confirmed; AG Garland March 15, 2022 FOIA memorandum confirmed.

⁷ Marijuana Moment, Feds Release 250+ Pages of Redacted Documents on Marijuana Rescheduling Recommendation (Dec. 7, 2023), https://www.marijuanamoment.net/feds-release-250-pages-of-redacted-documents-on-marijuana-rescheduling-recommendation-detailing-cannabiss-medical-value/ — 252 pages figure confirmed; only two pages released in entirety.

⁸ Cannabis Business Times, DOJ Official Says HHS Will Release Unredacted Cannabis Rescheduling Recommendation Letter, https://www.cannabisbusinesstimes.com/cannabis-rescheduling/news/15687041/doj-official-says-hhs-will-release-unredacted-cannabis-rescheduling-recommendation-letter — Zorn’s November 14 motion for summary judgment confirmed.

⁹ Id. (Update: HHS released the unredacted letter on January 12, 2024) — January 12, 2024 release date confirmed across multiple sources.

¹⁰ Regulatory Oversight, The Corporate Transparency Act and Its Connection to Cannabis (Nov. 2023), https://www.regulatoryoversight.com/2023/11/the-corporate-transparency-act-and-its-connection-to-cannabis/ — CTA enacted January 2021, effective January 1, 2024; Corporate Transparency Act, 31 U.S.C. § 5336 — statute citation accurate.

¹¹ FinCEN, Beneficial Ownership Information Reporting (updated Mar. 26, 2025), https://www.fincen.gov/boi — Interim Final Rule published March 26, 2025; all domestic entities exempt.

¹² Id. — only foreign entities remain subject to BOI reporting; U.S. persons need not be reported as beneficial owners of those entities.

¹³ Pillsbury Law, An Update on Beneficial Ownership Reporting Requirements under the CTA (2026), https://www.pillsburylaw.com/en/news-and-insights/cta-update.html — FinCEN stated it would use remainder of 2025 to craft modified regulations.

¹⁴ ICIJ, Treasury Department Won’t Enforce Beneficial Ownership Rule Under the Corporate Transparency Act (Mar. 5, 2025), https://www.icij.org/inside-icij/2025/03/treasury-department-wont-enforce-beneficial-ownership-rule-under-the-corporate-transparency-act/ — BOI exempt from FOIA; accessible only to law enforcement, courts, and financial institutions.

¹⁵ Sidley Austin LLP, New York LLC Transparency Act Took Effect January 1, 2026; U.S.-Formed LLCs Exempt from Reporting Obligations (Feb. 2026), https://www.sidley.com/en/insights/newsupdates/2026/02/ny-llc-transparency-act-took-effect-but-governor-veto-exempts-us-formed-llcs — Governor Hochul’s December 19, 2025 veto of S.B. 8432 confirmed; domestic LLC exemption confirmed.

¹⁶ Baker McKenzie, United States: New York LLC Transparency Act (Feb. 2026), https://www.bakermckenzie.com/en/insight/publications/2026/02/united-states-new-york-llc-transparency-act — NYDOS December 31, 2025 confirmation of narrow scope confirmed.

¹⁷ EisnerAmper, New York LLC Transparency Act — Narrowed to Only Foreign LLCs — Effective January 1, 2026 (Jan. 2026), https://www.eisneramper.com/insights/tax/nyllcta-0126/ — filing deadlines and non-public database confirmed.

¹⁸ Porter Wright Morris & Arthur LLP, Sunshine Laws No Daydream for Cannabis Companies, 400 Cannabis Law 200 (2020), https://www.porterwright.com/content/uploads/2020/05/CANNABIS-400_200_Sunshine-Laws-No-Daydream-for-Cannabis-Companies-2.pdf — general description of state open records frameworks accurate.

¹⁹ Franczek P.C., New Changes to Public Transparency Laws Set to Take Effect Beginning in the New Year (Dec. 8, 2025), https://www.franczek.com/blog/new-changes-to-public-transparency-laws-set-to-take-effect-beginning-in-the-new-year/ — Public Act 104-0438 signed November 21, 2025, effective January 1, 2026; provisions on website posting, person verification, and junk mail exclusion confirmed.

²⁰ Porter Wright, supra note 18 — trade secret exemption identified as primary shield for cannabis companies at state level.

²¹ Id. — description of state trade secret designation mechanisms accurate.

²² Id. — burden of proof on company to prove trade secret in litigation confirmed.

²³ Id. — risk of disclosure through public records requests discussed in source.

²⁴ Equitable Opportunities Now (EON), EON Urges CCC to Improve Ownership Data Transparency & Tip Line (Dec. 11, 2024), https://masseon.com/policy/cannabis-control-commission/eon-urges-ccc-to-improve-ownership-data-transparency-tip-line-and-urges-legislature-to-protect-competition/ — specific description of CCC license tracker limitations accurate.

²⁵ Id. — description of keyword-search limitation (business name only, not owner names) confirmed.

²⁶ Id. — request re Ascend Wellness, tip line, and past investigations confirmed.

²⁷ Id. — ownership data in PDFs rather than searchable database confirmed.

²⁸ Mass.gov, Audit of the Cannabis Control Commission (July 1, 2022 – June 30, 2024), https://www.mass.gov/audit/audit-of-the-cannabis-control-commission-0; Boston Globe, State Auditor Finds Widespread Mismanagement at Cannabis Control Commission (Aug. 15, 2025), https://www.bostonglobe.com/2025/08/14/metro/cannabis-control-commission-audit-mass/ — audit period and release date confirmed.

²⁹ Mass.gov, Audit of the Cannabis Control Commission, Overview of Audited Entity, https://www.mass.gov/info-details/audit-of-the-cannabis-control-commission-overview-of-audited-entity-0 — Finding 4 language confirmed; settlement amount of approximately $92,970 confirmed.

³⁰ Boston Globe, supra note 28 — verbal processes replacing documented procedures confirmed.

³¹ Boston.com, 7 Key Takeaways from the Mass. Cannabis Control Commission Audit (Aug. 21, 2025), https://www.boston.com/news/local-news/2025/08/20/cannabis-control-commission-audit-takeaways/ — HCA inconsistencies and over $100,000 Community Impact Fee finding confirmed.

³² Boston Globe, supra note 28 — DiZoglio’s post-audit review commitment confirmed.

³³ WBUR, As Cannabis Commission Is Again Mired in Turmoil, Mass. Officials Push for Overhaul (Sept. 4, 2025), https://www.wbur.org/news/2025/09/04/cannabis-massachusetts-turmoil-settlement-dizoglio — NDA cessation and Governor Healey’s executive NDA policy confirmed.

³⁴ Cannabis Control Commission, Commission and Leadership Team, https://masscannabiscontrol.com/about/commission-leadership-team/ — Commissioner Benedon’s appointment in November 2025 and background in Open Meeting Law confirmed.

³⁵ OpenTHC, Washington State Liquor and Cannabis Board, https://wiki.openthc.org/WSLCB — 17 non-public meetings with quorum confirmed; six-figure settlement referenced.

³⁶ Id. — six-figure settlement after litigation confirmed.

³⁷ Washington State Liquor and Cannabis Board, Meeting Schedule and Information, https://lcb.wa.gov/boardmeetings/board_meetings — statement about quorum and OPMA confirmed.

³⁸ Cannabis Observer, The Week Ahead (December 29, 2025), https://cannabis.observer/observations/108945-the-week-ahead-december-29-2025/ — 25 public meetings cancelled; “Board Efficiencies” March 2025 implementation confirmed; verbal comment period elimination confirmed.

³⁹ Id. — preliminary 2026 calendar perpetuating reduced-access policies confirmed.

⁴⁰ Cannabis Observer, WSLCB CAC, https://cannabis.observer/organizations/106321-washington-state-liquor-and-cannabis-board-cannabis-advisory-council/ — reformed CAC meetings closed to public confirmed; departure from prior open-meeting practice confirmed.

⁴¹ Cannabis Observer, WSLCB Public Health Roundtable (June 11, 2025) – Summary, https://cannabis.observer/observations/105365-wslcb-public-health-roundtable-june-11-2025-summary/ — “persistent double standard” characterization by Cannabis Observer Founder Gregory Foster confirmed.

⁴² Cannabis Observer, The Week Ahead (December 29, 2025), supra note 38 — Active Rules Tracker dashboard released December 23, 2025, confirmed.

⁴³ Office of the Washington State Auditor, 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 — published October 2024; follow-up to 2018 audit confirmed.

⁴⁴ Office of the Washington State Auditor, State’s Cannabis Tracking System Falls Short, https://sao.wa.gov/the-audit-connection-blog/states-cannabis-tracking-system-falls-short-long-sought-goals-audit-finds — 2024 audit finding confirmed.

⁴⁵ Id. — 2031 timeline confirmed.

⁴⁶ Cannabis Observer, WSLCB Board Caucus (January 7, 2025), https://cannabis.observer/observations/94868-wslcb-board-caucus-january-7-2025-data-dashboards/ — SAO report quoted accurately; enforcement relies on manual compliance checks.

⁴⁷ Office of the Washington State Auditor, Evaluating Oversight, supra note 43 — three failure reasons (leadership turnover, project management problems, IT priority competition) confirmed from audit document.

⁴⁸ Cannabis Observer, The Week Ahead (December 29, 2025), supra note 38 — WSLCB’s September 2025 budget requests for LEEADS/SMP and CCRS replacement confirmed.

⁴⁹ Id. — Governor Ferguson’s proposed supplemental operating budget denied both requests confirmed.

⁵⁰ Cannabis Observer, WA Legislature (February 24, 2026) Update, https://cannabis.observer/observations/112686-wa-legislature-february-24-2026-update/ — Senate Labor and Commerce Committee deferral on HB 1066 data dashboard bill on February 24, 2026, confirmed.

⁵¹ New York OCM, Reports, https://cannabis.ny.gov/reports — multiple report types listed.

⁵² New York OCM, 2025 Annual Report, https://cannabis.ny.gov/system/files/documents/2025/12/ocm-annual-report_final-2025.pdf — $2.5 billion adult-use sales confirmed; $5 million CGRF awards to 50 organizations with 82%+ to CDI ZIP codes confirmed.

⁵³ Distru, OCM NY: New York’s Cannabis Management Office, https://www.distru.com/cannabis-blog/ocm-ny-your-guide-to-new-yorks-cannabis-management-office — January 17, 2025 BioTrack integration deadline confirmed.

⁵⁴ Cannabis Business Times, NY Governor Signs Bill Fixing Dispensary Proximity Issue With Schools, Churches (Feb. 2026), https://www.cannabisbusinesstimes.com/us-states/new-york/news/15817084/ny-governor-signs-bill-fixing-dispensary-proximity-issue-with-schools-churches — 152 businesses affected, including 108 dispensary licensees confirmed; July 2025 policy change confirmed.

⁵⁵ New York OCM, School Proximity Correction: Door-to-Door Standard Remains, https://cannabis.ny.gov/proximity-correction — preliminary injunction through February 15, 2026 confirmed; Albany County Supreme Court September 25, 2025 order confirmed.

⁵⁶ Cannabis Business Times, NY Governor Signs Bill Fixing Dispensary Proximity Issue, supra note 54 — Governor Hochul signed A.B. A10140 on February 11, 2026 confirmed; legislation permanently codifies door-to-door standard confirmed.

⁵⁷ Harris Beach Murtha, NY Supreme Court Strikes Down OCM’s One-License-Per-Majority-Owner Policy (June 10, 2025), https://www.harrisbeachmurtha.com/insights/ny-supreme-court-strikes-down-ocms-one-license-per-majority-owner-policy/ — CCB/OCM acted improperly when denying license based on guidance not promulgated under SAPA.

⁵⁸ California DCC, Data Dashboards, https://www.cannabis.ca.gov/resources/data-dashboard/ — four dashboards confirmed (License Summary, Harvest, Sales & Price Per Unit, Monthly Sales Summary).

⁵⁹ California DCC, Reports and Policies, https://www.cannabis.ca.gov/about-us/reports-and-policies/ — SLAA reports and market outlook reports listed.

⁶⁰ California DCC, Homepage, https://www.cannabis.ca.gov/ — December 26, 2025 competitive research grant awards of nearly $30 million to nine academic institutions for 22 projects confirmed.

⁶¹ OpenTHC, supra note 35 — WSLCB restarted data dashboards in 2025 confirmed.

⁶² Cannabis Observer, The Week Ahead (December 29, 2025), supra note 38 — Active Rules Tracker dashboard launched December 23, 2025 confirmed.

⁶³ New York OCM, Reports, supra note 51 — multiple reports confirmed.

⁶⁴ Illinois Cannabis, Learn How Cannabis Tax Dollars Are Spent, https://cannabis.illinois.gov/research-and-data/learn-how-cannabis-tax-dollars-are-spent.html — monthly DOR reporting on Cannabis Regulation Fund disbursements confirmed.

⁶⁵ Missouri Dep’t of Health & Senior Services, 2024 Missouri Medical and Adult Use Cannabis Report (2025), https://health.mo.gov/safety/cannabis/ — annual report covering program year 2024 confirmed.

⁶⁶ EON, supra note 24; California State Auditor, Report 2023-116, https://information.auditor.ca.gov/reports/2023-116/index.html — San Diego records-keeping failure documented.

⁶⁷ Equitable Opportunities Now, Massachusetts Cannabis Equity Legislative Priorities, https://masseon.com/policy/legislation/ — EON 2025-2026 legislative priority to direct CCC to display owners and link to profiles with other licenses they control confirmed.

⁶⁸ Porter Wright, supra note 18 — language about trade secret disclosure risks confirmed.

⁶⁹ California State Auditor, Report 2023-116, supra note 66; California State Auditor, Report 2024-048, https://www.auditor.ca.gov/reports/2024-048/ — inappropriate grant expenditures finding confirmed; Mass.gov, Audit of CCC, supra note 28 — verbal processes replacing documentation confirmed.

⁷⁰ California State Auditor, Report 2024-105, https://www.auditor.ca.gov/reports/responses-2024-105-all/ — lack of structured summary reporting capability confirmed; February 2026 deadline for escalation guidelines confirmed.

⁷¹ Id. — August 2026 deadline for packaging rubric implementation confirmed.

⁷² OpenTHC, supra note 35; Harris Beach Murtha, NY Supreme Court Strikes Down OCM Policy, supra note 57; Cannabis Observer, WSLCB CAC, supra note 40.

⁷³ California State Auditor, Report 2024-048, supra note 69 — eleven grant agreements; $4,094,936.57 figure confirmed (rounded to “$4.1 million” in text).

⁷⁴ California State Auditor, Report 2024-105, supra note 70 — February 2026 deadline for escalation guidelines; DCC CLEaR system adaptation mentioned.

⁷⁵ Mass.gov, Audit of CCC, supra note 28 — internal control plan noncompliance and verbal-process documentation failures confirmed.