2025-048 Cannabis Business Licensing
The State’s Grant Funding Assisted Businesses, but a Lack of Preparedness Limited the Grant’s Impact
Published: November 20, 2025
Audit Recommendations Disclosure
When an audit is completed and a report is issued, auditees must provide the State Auditor with information regarding their progress in implementing recommendations from our reports at three intervals from the release of the report: 60 days, six months, and one year. Additionally, Senate Bill 1452 (Chapter 452, Statutes of 2006), requires auditees who have not implemented recommendations after one year, to report to us and to the Legislature why they have not implemented them or to state when they intend to implement them. Below is a listing of each recommendation the State Auditor made in the report referenced and a link to the most recent response from the auditee addressing their progress in implementing the recommendation and the State Auditor’s assessment of auditee’s response based on our review of the supporting documentation.
Recommendation to the Legislature
Recommendation 1
To increase the ability of state agencies that may lack the existing infrastructure to effectively administer legislative grant programs, the Legislature should consider directing DGS or another state agency with the appropriate expertise to create and make available statewide guidance for grant administration, including guidance for subgrantee monitoring. Such guidance might include the following:
- Clear instructions for departments on how to define both allowable and unallowable costs in grant agreements, and the types of supporting documentation required.
- Examples of common grant monitoring controls to prevent or detect improper spending and delays in grant execution.
- An overview of the potential risks state departments face when they advance state grant funds, and when doing so may create a high risk of fraud, waste, or abuse of grant funding.
Agency response status:
Pending
Recommendations to the Department of Cannabis Control
Recommendation 2
To provide transparency into the effectiveness of the Grant Program and accountability for the use of public funds, DCC should immediately implement a process for publicly reporting on its website the final amounts of Grant Program funding it disbursed to each local jurisdiction, the amounts each jurisdiction used, as well as the amounts DCC determined jurisdictions may have used in unallowable ways and that are subject to recapture, and the amounts DCC will return to the General Fund after it has determined these amounts.
Agency response status:
Pending
Recommendation 3
To reduce the risk of fraud, waste, and abuse of future grant program funds, DCC should, by June 2026, use best practices to develop guidance that grant recipients can use when making grant awards to subgrantees, including direction about limiting advance payments to the minimum amounts subgrantees need and timing those payments to the subgrantees’ actual, immediate cash requirements.
Agency response status:
Pending
