Wed March 27, 2013

Auditors Critical Of Colorado's Medical Marijuana Enforcement

Colorado's troubled medical marijuana regulation agency is up for a second day of scrutiny Wednesday in the Colorado Legislature.

A scathing 89-page report [.pdf] calls the Medical Marijuana Enforcement Division “distressed and directionless.”

State auditors say it’s taking too long to approve licenses for marijuana growers and dispensaries – years, in some cases. In other cases, the report says the MMED sometimes granted licenses to people who shouldn't have received them, such as individuals with felony convictions.

The report also faulted regulators for setting up ambitious tracking goals but failing to fully implement them. As the Denver Post reports, the agency paid more than $1 million to develop a “seed-to-sale” tracking system for marijuana plants, but was unable to come up with another $400,000 to put it into use.

The agency is under intense scrutiny because it will likely regulate recreational marijuana, with sales expected to begin next year.

Despite its shortage of staff and funding, the enforcement division assures state lawmakers it will reform the flawed systems.

Updated 11:00 a.m.: In a second day of hearings, state auditors detailed examples of the agency's excessive spending on office furniture and other items, burning through cash that could have been used to regulate the industry.

From the report [.pdf]:

“Overall, we found that the Division has not managed its resources effectively to meet its objectives…. For example, the Division experienced a monthly net loss of about $2.3 million in June 2011, which resulted from the Division making many large capital purchases, such as furniture, computer equipment, and software for a marijuana plant tracking system.”

To furnish four offices, the MMED spent roughly $250,000 - including $16,000 for 3 cubicles and more than $4,000 for four office chairs. The audit faults the agency for not using a competitive bidding process, which the state generally requires for purchases over $150,000. The agency instead purchased most of the furniture from Colorado Correctional Industries.

The audit also reports the agency bought more cell phones and tablets than necessary, including 50 Blackberries for a staff of 37. The unused cell phones still incurred charges of about $10,000 per year.

Agency heads again told lawmakers they're making changes to save money and improve marijuana regulation.