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Office of Marijuana Policy Needs More Transparency

Marijuana plants and a sign.DENVER – Denver’s efforts to improve transparency regarding marijuana tax revenue use still have room for improvement, according to a recent follow-up report.

Denver Auditor Timothy M. O’Brien issued a follow-up report on the 2016 audit of the Office of Marijuana Policy. The office is now part of the Department of Excise and Licensing after the Mayor merged the office with the department in 2016. When the audit team checked in on the recommendations from the original audit, they found some of them implemented and some still in progress past the target implementation date.

“The department is working to improve transparency and outreach efforts,” Auditor O’Brien said. “It could still improve disclosure around specific planned uses of recreational marijuana tax revenues, to ensure the money is used as many voters wanted when they approved legalization of recreational marijuana.”

This year, the Department of Excise and Licenses worked to include information about marijuana-related expenditures in the Mayor’s budget. At the time of the original audit, marijuana tax revenue went into the general fund, and there was little transparency to prove the money was used as directed by voters for marijuana regulation, education, enforcement, public health and other expenses related to operating the city and its facilities.

The 2018 budget includes marijuana-related expenditures from the approximately $21 million dollars of special retail marijuana sales tax revenue, so the agency’s efforts to increase spending transparency are considered partially implemented. However, the budget does not give enough information about the specific agency uses of the money. Auditor O’Brien found the Department of Excise and Licenses should provide increased transparency on how all marijuana- revenues will be spent to support various programs and initiatives.

The original audit also recommended the office do a better job of documenting and monitoring progress. The follow-up found the office is doing much better at documentation but could still do more to integrate specific performance measures with goals and strategies in its strategic plan.

The office did show significant progress in building relationships with neighborhood organizations and marijuana businesses through community outreach efforts. Attendance at quarterly industry check-in meetings has nearly doubled. Publication frequency of the office’s Marijuana Industry Bulletins has increased consistently. Office staff members also regularly attended meetings with registered neighborhood organizations, including those with marijuana businesses within their boundaries.

“I’m pleased to see the proactive relationship-building in neighborhoods across Denver,” Auditor O’Brien said. “It’s important to keep residents involved and informed as our city continues to adapt to this unique new industry.”

Auditor O’Brien’s original evaluation found the Office of Marijuana Policy was a valued addition to the organizational structure of the city and it accomplished a great deal. The office’s mission is to recommend, administer and implement policies, oversee and coordinate city agencies and act as a liaison for many different officials, agencies and stakeholders.

Read the Follow-Up Report

Read the Audit

In the News:

"Denver marijuana regulators' oversight improved, but still lacking tax transparency, auditor says" - The Cannabist - Dec. 7, 2017

"Denver Auditor: Marijuana Policy Office Needs More Transparency" - Westword - Dec. 8, 2017

"Auditor finds Denver could do more to ensure marijuana tax revenue goes to right places" - Denverite - Dec. 8, 2017