Washington has been operating a legal adult-use cannabis market for more than a decade now. As the CEO of a Washington company that develops technology for infused beverages and other products, I have watched this market evolve from its earliest days.
Massachusetts voters were asked to decide on Tuesday whether to end regulated adult-use cannabis sales, and the measure was soundly rejected by voters who opted to keep a regulated system, even though it may not be perfect. Similar repeal campaigns emerged in Maine and Arizona this year, although neither reached the ballot. While Washington isn’t likely to face a similar ballot measure anytime soon, these campaigns show what a regulated market gives consumers. At the same time, we also know what our market’s real problems are and how to keep it robust: Balance supply and demand and examine the cannabis industry tax rate.
Washington’s system has created legitimate businesses, jobs, tax revenue and product safeguards for consumers. It has also become increasingly difficult for many licensed operators to make money, which in turn endangers the industry.
Washington voters approved adult-use cannabis in 2012, and the first licensed stores opened in 2014. The state built a highly regulated system designed to move cannabis sales away from illegal operators. Since then, the state has collected more than $5.1 billion in cannabis excise and sales taxes, and local governments have collected roughly $339 million more. Over half of the state’s cannabis revenue helps pay for healthcare for low-income children.
Parts of that system need to be reconsidered.
A recent state review estimated that licensed growers produced two to three times as much cannabis as retailers sold in 2023. This is despite the fact that the number of growers has declined significantly since 2017, and those that remain continue to face falling prices and tight margins.
The state’s 37% cannabis excise tax adds to that pressure. Licensed businesses also bear the cost of testing, compliance, security, packaging and other taxes. Illegal sellers do not. Thanks to the expense of doing business in Washington, annual cannabis tax collections peaked at about $631 million in 2021 and fell to roughly $496 million in 2025.
Restricting legal cannabis even further, or making it a less attractive industry, will not cause demand to disappear. It will make unlicensed products more attractive to consumers, particularly when those products are cheaper and easy to get.
Consumers purchasing outside the legal market have no reliable way to know how a product was made or whether the information on the package is accurate. The product may not have been tested for contaminants. Its potency may be significantly different from what is advertised. There is no regulator to contact and no licensed company to hold responsible. This is true not just of traditional products but also newer products that have become more common, such as infused beverages.
Cannabinoids, such as THC, are oil-based and do not naturally mix with water. Producing a consistent beverage requires an emulsion that keeps the cannabinoids evenly distributed throughout the liquid. If the formulation is not stable, the consumer may receive a different amount of THC from one serving to the next.
In my business, our work includes formulation, dosing, flavor, stability and production support. We conduct internal and third-party testing because we need to know that the product will continue to perform as expected after it has been manufactured. It is not enough for a beverage to test correctly on the first day if the active ingredient separates or degrades while the product is sitting on a shelf.
Consumers should be able to trust that the amount stated on the label is the amount they are consuming. That standard should apply to every cannabis product sold in Washington.
Companies need to market responsibly, invest in testing and be honest about what their products can deliver. If we expect consumers and regulators to trust us, we have to earn that trust.
Washington’s cannabis market is mature enough to have real problems. That does not mean the decision to legalize cannabis was a mistake. It means the state now has the information needed to make better decisions.
Returning cannabis sales to an illegal market, or making it prohibitive to do business in other ways, would erase the oversight Washington has spent years developing while doing nothing to eliminate demand. The better course is to use what we have learned and build a system that works for consumers, regulators and responsible businesses.
