$400K difference in budget vis-à-vis revenue spelled doom for Cannabis Commission

The CNMI Cannabis Commission collected just $113,880 in cannabis excise and surtax revenues in fiscal year 2025—a steep drop from prior years and far short of its $517,868 budget appropriation, according to its new Citizen-Centric Report.

The widening gap between earnings and operational costs became one of the primary reasons Gov. David M. Apatang’s administration moved to dissolve the standalone agency and merge it into the Department of Commerce, a consolidation officials say is meant to curb expenses and stabilize a regulatory program no longer generating sufficient income to sustain itself.

Under the report, published last Sept. 3, interim managing director Thomas L. Songsong acknowledged that the commission entered FY2025 already facing fiscal and staffing constraints, yet continued pushing regulatory reforms, industry oversight, and interagency coordination.

But the financial data in the same report underscores the commission’s structural problem, as even at its peak, cannabis revenues have never matched appropriations, and FY2025 saw the sharpest mismatch yet.

Collections totaled $686,978 in FY2024, $458,819 in FY2023, and $170,662 in FY2022, with FY2025 tracking far lower heading into the fiscal year’s close. The commission’s budget appropriations, however, consistently exceeded these revenue levels—reaching $620,604 in FY2023 and nearly $518,000 in FY2025.

This imbalance essentially made the commission’s long-term sustainability questionable and fueled the policy decision to fold its duties into the Department of Commerce, which already houses multiple regulatory divisions and is better staffed to absorb administrative and enforcement responsibilities.

Despite the fiscal strain, the commission’s CCR details a year of regulatory activity that included reduced licensing fees, updated pesticide-use standards, enhanced cannabis testing regulations, development of a seed-to-sale tracking blueprint, and multiple new frameworks for producers, processors, and retailers. It also expanded collaboration with the Division of Environmental Quality on waste disposal protocols and with the Department of Lands and Natural Resources on oversight of hemp-derived products.

The commission also emphasized its participation in the Cannabis Regulators Association, which allowed the CNMI to align with national best practices and emerging federal guidelines. Songsong noted that CANNRA membership strengthened CNMI’s regulatory consistency and access to external resources.

According to the Citizen-Centric Report, as of September 2025, the CNMI had:

8 producers across various canopy classes

2 processors (both solventless extraction)

7 retailers

2 lounges

No active micro-producers, solvent-based processors, researchers, wholesalers, or testing facilities

The commission also approved a 25% reduction in application and renewal fees for all license types to help stabilize operators, resulting in modest renewal collections:

$16,200 from producers

$6,750 from processors

$31,500 from retailers

$7,500 from lounges

Total fee collections—excluding September receipts—reached $378,342.50 as of July 31, 2025.

Songsong noted that approximately 60 jobs were created by licensed cannabis businesses, reflecting the industry’s limited but meaningful economic footprint.

While the commission stressed regulatory achievements, the CCR also highlights operational challenges—limited staffing, absence of a certified testing facility, ongoing need for inter-agency support, and resource shortages that slowed development of new divisions such as Enforcement & Compliance and Policy & Regulation. The Apatang administration ultimately concluded that the commission’s independent structure was not financially sustainable given the declining excise and surtax revenues, consistently higher budget appropriation, dependence on other agencies for enforcement and lab-related functions, and limited staff capacity to meet expanding regulatory tasks.

The consolidation into Commerce, according to the Apatang administration, aims to reduce overhead, centralize enforcement under an already-established regulatory department, and prevent further budget gaps from accumulating.