Oregon marijuana regulators must improve their monitoring of authorized pot growing operations to ensure growers follow state laws, auditors with the Oregon Secretary of State’s Office say after reviewing the state’s legal recreational marijuana program.
In the report released Wednesday morning, the Secretary of State’s Office said Oregon lacks enough inspectors to oversee the many hundreds of recreational pot growing operations in the state.
The state has 18 marijuana inspectors, or one per 83 approved recreational marijuana operations, compared with the one inspector per 18 marijuana operations that Alaska and Nevada each employs, the report found.
Also under Oregon’s system, authorized marijuana growers are supposed to self-report how much they grow and sell. But this system increases the risk that regulators may fail to uncover violations by growers, the audit found.
In addition, the auditors identified weaknesses in the computer systems that the Oregon Liquor Control Commission uses to license and track recreational marijuana. The recreational pot system is overseen by OLCC.
“Until these issues are resolved, the agency may not be able to detect noncompliance or illegal activity occurring in the recreational marijuana program,” according to the report.
The audit found that the OLCC continues to be swamped with a flood of recreational marijuana license applications. More than 3,100 applications had come into the agency as of late last year, and the OLCC had approved more than 1,600 of them, according to the report. Over half of the approved licenses are for recreational marijuana growing. The rest are for processing, retailing or other activities.
The state report did not directly address a problem that has drawn increasing scrutiny: legal growing operations producing excess marijuana, which ends up being illegally shipped to states where pot remains against the law.
The report comes less than a week after Oregon’s top federal prosecutor — U.S. Attorney Billy Williams — said the state has a “formidable” problem with pot overproduction and with legally grown marijuana being sold into the black market. Williams convened a summit in Portland with federal law enforcement and state officials, as well as pot industry representatives, to ask them for help in addressing the problem.
“Here’s what I know in terms of the landscape here in Oregon, and that is, we have an identifiable and formidable marijuana overproduction and diversion problem,” he said Friday. “And make no mistake about it, we’re going to do something about it.” While Oregon law allows legal production and consumption of recreational marijuana, those activities, along with interstate shipment of pot, are illegal under federal law.
The OLCC received a copy of the report before it was publicly released and responded late last month with a letter to the Secretary of State’s Office. Steve Marks, OLCC executive director, said in the letter that the agency will address the problems highlighted in the report within the next year.
“We are taking immediate action to obtain the necessary approvals to help us remedy issues as rapidly as possible,” Marks wrote.
Oregon’s recreational marijuana market has had more than $480 million in sales through November 2017, according to the report. The state collects a sales tax on recreational pot and, since January 2016, Oregon has brought in more than $115.5 million in taxes on the weed.
Oregonians voted in 2014 to approve the sale of recreational marijuana, and pot became legal in 2015. Medical marijuana has been legal in Oregon since 1998 and the Oregon Health Authority oversees a separate program regulating that industry.
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