Marijuana: Denver Department of Excise and Licenses gets spanked in audit of MMJ licensing
The state medical marijuana licensing authority received a scolding from auditors in March and then again on Monday, and now it is Denver's turn to get spanked. The city auditor's office released a report this morning to Denver's Independent Audit Committee outlining numerous problems with the city's handling of the medical marijuana industry. "The audit found that the Department of Excise and Licenses does not have a basic control framework in place for effective governance of the City's medical marijuana program," says the first paragraph of the report's highlights.
Department of Excise and Licenses Director Tom Downey told the Independent Audit Committee meeting this morning that he anticipated and accepts the findings.
"We have done everything we could with limited resources and we are asking for more resources to do things better," Downey said.
The report identified seven key shortcomings: MMJ records are incomplete and inaccurate; the department lacks policies to govern the industry; the city and state coordination has been poor; deadlines have not been established or enforced; there is a shortage of management oversight and staff; the licensure fees were established arbitrarily; and key information has not been kept up-to-date as MMJ policies have evolved.
These issues have resulted in an unknown number of dispensaries and grow operations operating within the city without city licensing, according to the auditor's office. These businesses are operating legally due to a loophole in state licensing, which Downey says has been fixed. But since these facilities do not have proper licensing from the city, they are not being monitored to the extent that they should be, the audit notes, and as a result inspections are not being done, facilities are not being monitored -- and the city is losing revenue, since it does not know of their existence.
When he took the position after Michael Hancock was elected mayor, department staff had been cut by 20 percent and applications had not been processed for six months, Downey noted. "The department as a whole needed to go through a major overhaul," he explained. "Over 50 percent of our staff is new since two years ago."
Downey also said that technology issues and regulation inconsistencies added to the challenges -- right as the MMJ industry was burgeoning.
(The department will be gaining additional resources if the proposition for a city sales tax of up to 10 percent on recreational marijuana passes in November.)
Continue reading to find out more issues in the audit.