Pot regulators will soon begin spot inspections
SALEM — State regulators will soon start doing random inspections of cannabis businesses, starting with retailers, according to the Oregon Liquor Control Commission.
More details are forthcoming, said OLCC spokesman Mark Pettinger.
Until now, inspections of legal cannabis businesses have largely been complaint-driven, Pettinger said. In December, the agency started checking whether businesses were selling marijuana to minors through "minor decoy" stings.
Although marijuana became legal under Oregon law in July 2015, OLCC did not start issuing retail licenses for recreational marijuana until October 2016.
The OLCC now has a baseline of information in its seed-to-sale Cannabis Tracking System to analyze deviations from the norm and ensure compliance.
Random inspections of businesses could be described as audits, Pettinger said — in the sense inspectors will compare what's in the state's tracking system to what's on the shelves.
The OLCC says it is working to improve upon problems identified in a recent Oregon Secretary of State audit of the system. In a response to the audit, OLCC officials said the CTS "has identified thousands of discrepancies, small and large, that have led to investigations, administrative charges, and warnings or sanctions."
OLCC Executive Director Steve Marks in November notified licensees of several other upcoming changes in enforcement. Among them: OLCC will do spot checks on businesses to make sure their video security systems were up to snuff and check that businesses weren't selling amounts over the legal limit to individual customers.
"With each passing day OLCC licensees are seeing and hearing about increased OLCC enforcement activity," Marks wrote in a Nov. 29 bulletin posted on the state's website. "...Compliance is critically important in building this industry so you need to take action to prepare for the increasing likelihood you may be inspected in the field and that your (Cannabis Tracking System) data will be scrutinized."
Additional positions were approved in 2017, so that there are now 23 inspector positions and 21 investigator positions, compared to 11 of each in 2016. Inspectors typically work in the field, whereas investigators typically work on licensing from an office setting.
State budget analysts have said it can be difficult to ascertain just how much money is needed to regulate the state's legal marijuana market — in part because the growth of the industry has been rapid.
"The budget environment related to regulation of marijuana continues to be in near constant motion," wrote budget analysts in the annotated current two-year budget for the Oregon Liquor Control Commission's marijuana program. "Budgeted resources are predicated on an estimated number of licensees, which have so far exceeded expectations at every turn."
The changes on the state level as the marijuana industry matures come amid additional layer of uncertainty — as to what extent the federal government will scrutinize states where recreational marijuana is legal.
U.S. Attorney General Jeff Sessions said at an event at Georgetown University earlier this month that federal prosecutors wouldn't pursue "small" marijuana cases.
But Sessions has rescinded more liberal Obama-era guidelines on states where marijuana is legal, and has given federal prosecutors wide latitude on the issue.
It's not yet clear how the U.S. Attorney for Oregon, Billy Williams, will proceed.
However, Williams has claimed that a significant amount of marijuana leaks out of Oregon across state lines. He convened a group of law enforcement, lawmakers, public health and cannabis business groups to discuss the issue last month.
David Bordelon, a manager of Ancient Remedies, a cannabis dispensary in Salem, says the store hasn't been subject to a random inspection by the OLCC, other than a "minor decoy" operation.
OLCC records show that Ancient Remedies didn't sell marijuana to minors as part of a sting Dec. 21. It was one of 18 stores that passed a 25-store inspection in the Salem-Keizer area.
Ancient Remedies converted from a medical marijuana dispensary to a recreational outlet in November 2016, which at the time was "really scary" because they were one of the first cannabis businesses in the area to make the transition, Bordelon says.
But Bordelon says their experience with the OLCC has been positive.
While to his knowledge, there haven't been any complaints filed about his business, he says the agency identified a problem with the way Ancient Remedies was reporting store-to-store transfers in the Cannabis Tracking System and contacted the business right away.
"That's the only time we've been contacted for an issue," Bordelon said. "They called us immediately to let us know there was an issue."
Periodically, the business files requests with the agency to make changes, such as when they sought to rearrange the layout of the store, Bordelon said.
Ancient Remedies will typically get a full response approving the changes or asking for more documentation within two weeks to a month, Bordelon said.
Bordelon believes the agency could benefit from more inspectors.
"In general, the people they have are doing a great job," Bordelon said, noting that more inspectors could mean a quicker response time for businesses seeking guidance as well as increased enforcement.
Alicia Smith, owner of Homegrown Oregon, a cannabis business with three locations in Salem, also says her experience with the regulatory agency has been positive.
"We have a great relationship with the OLCC," Smith said, "And I think a lot of the reason why that is true is because we've always been really transparent with them, and we've kept in constant communication with our inspectors."
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