State auditors warned a lack of proper safeguards within Oregon’s marijuana-tracking system has increased the risk of pot businesses concealing violations.
In a report released Wednesday, auditors with the Oregon Secretary of State’s Office recommended a set of fixes to tighten security within the Oregon Liquor Control Commission, which regulates recreational marijuana sales.
Under state rules, every marijuana business in Oregon must regularly report inventory and sales through the state’s Cannabis Tracking System.
But the system is vulnerable to false information because marijuana businesses can easily manipulate sales data and inventory levels before sending them to the state, auditors found.
One unnamed retailer showed auditors how simple it is to fudge the numbers. The retailer exported a spreadsheet of sales data from a point-of-sale device to a computer, then altered the data.
While the retailer didn’t upload the data to the state’s tracking system, the demonstration showed “there are no controls in place” to stop retailers from submitting falsified information, auditors said.
“To fix it will not just take more inspections, it will require that the OLCC set up a system that all marijuana sellers must use,” Moore said. “That system should be connected directly to their sales systems, so that a sale immediately is reported to the state overseers.”
The self-reporting framework is “the method by which we have to capture that data,” OLCC spokesman Mark Pettinger said. The OLCC is asking licensees to keep accurate ledgers of their business, and the OLCC reviews the numbers to ensure businesses are complying with rules and laws, he said.
Auditors also said because there isn’t a standard unit by which all businesses have to measure their marijuana in the tracking system, they might alter data and then chalk up the inconsistencies to round-off errors.
To address problems highlighted in the report, auditors recommended more than a dozen fixes. They said the OLCC should hire on enough trained inspectors proportional to the number of licensed marijuana businesses in Oregon.
As it stands, the agency has 23 inspectors responsible for 1,700 marijuana licensees, OLCC Executive Director Steve Marks said in a letter included with the audit. He said the agency is working on its budget request to state lawmakers for the 2019-21 biennium, which will include “an evaluation of the need for additional inspectors.”
Auditors said inspectors should monitor businesses on-site to make sure they’re submitting accurate data to the tracking system.
Marks agreed with the recommendation, saying, “There are currently some staff who are better versed in how to monitor the tracking system.” But, he said, inspectors are set to be trained on the system so they can do proper inspections and follow up on violations.
Pettinger said the agency’s marijuana regulation arm “is essentially a startup within a government agency.”
“If you’re starting up any kind of business from zero to infinity, you don’t have a really good read of the horizon,” he said. “That applies in this instance.”
As the OLCC finds gaps in its ability to regulate the industry, agency officials will ask lawmakers for the resources to fill them, Pettinger said.
In response to a series of December sting operations that found many Oregon retailers selling weed to minors, the OLCC last month ratcheted up punishments for violations.
A single intentional sale to a minor now garners license revocation, while a first-time unintentional sale carries either a 30-day license suspension or a $4,950 fine. When a retailer is caught processing two unintentional sales in a two-year period, it loses its license.
credit:statesmanjournal.com
