Alabama Cannabis Commission Returned $11.9M, Overpaid Vendor $204K

A statutory examination by Alabama's Department of Examiners of Public Accounts⧉ -- the state office that audits agency finances and legal compliance -- reviewed the Alabama Medical Cannabis Commission's first four-plus years of existence, May 2021 through September 2025, and found an agency that could not keep track of money in either direction.▸ The Legislature appropriated $21,695,648.00 in General Fund money to stand up and run the Commission; $11,932,496.30 of it -- better than half in some years -- came back unspent as a 'reversion' rather than getting used for the oversight work the Commission exists to do. In the same period, examiners found the Commission paid a legal-services vendor $604,197.55 against a contract capped at $400,000.00, a $204,197.55 overpayment that happened simply because no one checked invoices against the contract terms.

The pattern holds every year examiners checked.▸ In fiscal 2022, the Commission's first full year, the Legislature appropriated $3,500,000.00 and the Commission reverted $2,827,643.95 of it -- 80.8% -- unspent⧉. The share reverted came down some in later years -- 59.9% in fiscal 2023, 43.3% in fiscal 2024, 46.5% in fiscal 2025 -- but never dropped below returning nearly half of what it was given. Across the four years, that adds up to $11,932,496.30 sent back to the General Fund on top of $369,480.22 in separate prior-year reversion adjustments -- money the Legislature set aside for cannabis regulation that the regulator itself did not use.

Alabama law sets the Commission up to eventually run on the license and application fees it charges cannabis businesses and patients, not General Fund appropriations -- and starting October 1, 2025, any year-end surplus in its fee-funded account must be split, with 60% going to the General Fund and 30% to a medical cannabis research fund⧉ -- a rule that only took effect after the examination period closed.▸ In practice, the Commission collected just $2,774,625.50 in license and fee revenue over the whole period -- about one dollar for every eight the Legislature appropriated directly -- and that revenue simply piled up unspent rather than getting used.

The Commission Fund's cash balance grew from $33,086.71 at the end of fiscal 2022 to $2,404,364.89 by September 30, 2025⧉, all of it still sitting unobligated as of the examination date -- the new split rule will now apply to a balance the Commission let build for years before the requirement existed.

The $204,197.55 legal-vendor overpayment happened because, per the examiners, of the Commission's 'failure to properly monitor payments on the contract to ensure payments were made within the contract terms.'▸ The vendor eventually filed a claim with the Alabama Board of Adjustments⧉ -- the state body that hears money claims against Alabama agencies -- which ordered the overage paid, converting an internal control failure into a binding state liability.

Examiners found four other compliance gaps in the same window.▸ The Commission reviewed the minutes of 62 meetings and found recurring Open Meetings Act violations⧉ -- missing votes, missing attendance records, and one meeting notice that omitted its own location. It also never obtained a Records Disposition Authority or filed the annual reports the State Records Commission requires, in any of four straight years.

It also charged fees for at least eight license and registration categories without ever setting the amounts by administrative rule, as state law requires, and it wrote its own lost-card reporting rule with a 72-hour deadline where the statute allows patients and caregivers 10 days.