Washington Warns Providers Against Improper Cannabis Authorizations

Guidance Targets Authorization Mills and Referral Kickbacks

The Washington State Department of Health issued formal guidance prohibiting healthcare providers from maintaining financial relationships with dispensaries or operating high-volume authorization practices without adequate patient evaluation. The notice went to licensed healthcare practitioners authorized to issue medical cannabis recommendations. It outlines prohibited conduct. Violations may trigger disciplinary action by professional licensing boards.

The guidance identifies two core compliance failures: providers who authorize medical cannabis without conducting thorough patient assessments, and clinics that receive compensation for referring patients to specific dispensaries. Both practices violate Washington's Medical Use of Cannabis Act and professional standards of care.

State Cites Patient Safety and Program Integrity Concerns

Regulators framed the guidance as a response to documented cases of authorization clinics processing hundreds of recommendations monthly with minimal patient contact. The Department of Health didn't disclose the number of providers under investigation but confirmed that enforcement actions are pending in multiple cases.

The state's medical cannabis registry is intended to serve patients with qualifying conditions who benefit from physician-supervised treatment, not as a workaround for recreational purchase limits or a revenue stream for referral networks.

Washington's medical cannabis patients may purchase up to three times the recreational limit and are exempt from the state's 37% excise tax. Those economic incentives have attracted operators who prioritize volume over clinical judgment, according to the guidance.

What Providers Must Do to Comply

The guidance establishes four mandatory practices for healthcare providers issuing cannabis authorizations:

• Conduct an in-person or telehealth examination that meets the standard of care for diagnosing the qualifying condition
• Document the patient's medical history, current symptoms, and prior treatments in a medical record
• Provide a written authorization only after determining that the patient has a qualifying condition under state law
• Refrain from any financial arrangement with a dispensary, including referral fees, rent-sharing, or co-location agreements that create an appearance of impropriety

Providers who fail to meet these standards may face investigation by the Washington Medical Commission, the Board of Osteopathic Medicine and Surgery, or the Nursing Care Quality Assurance Commission, depending on their license type.

Enforcement Signals Tightening Oversight Across Medical Programs

The September 30 guidance follows a pattern of increased scrutiny in state medical cannabis programs nationwide. In 2025, Oklahoma suspended more than 40 physician licenses for authorization mill activity. California's Medical Board issued similar warnings targeting telemedicine authorization services.

Washington's medical cannabis patient registry has grown 18% year-over-year, reaching approximately 42,000 active cardholders as of August 2026. That growth has drawn attention from state auditors, who flagged authorization practices as a compliance risk in a June 2026 performance audit.

For full background on Washington's medical cannabis regulatory framework, see the CannIntel topic hub on Washington Medical Cannabis Program.

What's next? The Department of Health is expected to publish a list of compliant authorization practices and a model documentation template by the end of Q4 2026. Providers operating outside those guardrails will face heightened audit risk.