Secretary of state audit says OLCC should better align marijuana, alcohol rules, prepare for federal legalization

SALEM, Ore. (KTVZ) — The Oregon Liquor and Cannabis Commission and state leadership can better align the regulation of cannabis businesses to that of alcohol businesses, prepare the state for federal legalization of cannabis, and implement strategies to provide equitable access to the cannabis industry, according to an audit released Friday by the Oregon Secretary of State Audits Division.

“Oregon’s cannabis industry faces significant regulatory issues, stemming from federal restrictions on cannabis. This audit revealed Oregon’s regulatory system for cannabis compounds these problems,” said Deputy Secretary of State Cheryl Myers. “Given the action taking place at the federal level, now is the time for Oregon to prepare its system for a future when cannabis is legal nationally.”

Auditors found Oregon cannabis businesses are subject to regulations that create burdens the alcohol industry does not face, particularly when coupled with the current licensing moratorium and federal restrictions on interstate commerce, banking, and taxation.

These regulations are not based on a robust risk assessment or any kind of test of real-world effectiveness but are instead based on federal guidance from 2018 that has since been repealed and was put in place to prevent federal intervention in Oregon’s legal cannabis system.

Auditors also found that Business Oregon, the state’s economic development agency, will not work with cannabis businesses due to concerns over criminal liability and losing its federal funding. Compounding these issues is the fact Oregon has not developed a clear directive on how state agencies should interact with cannabis businesses.

Additionally, Oregon did not consider or include targeted equity provisions when developing the recreational cannabis program and OLCC’s current licensing system is not capable of tracking demographic data. The lack of these provisions hinders efforts to mitigate the disproportionate impacts experienced in communities targeted by the War on Drugs and does nothing to provide equitable access to this multi-billion-dollar industry.

This audit focused on the OLCC’s cannabis program. It does not examine the agency’s Distilled Spirits Program.

The audit includes three recommendations to OLCC. The audit also recommends the Governor and the Legislature work with the Oregon Department of Justice to develop guidance for state agencies working with cannabis businesses.

The report can be accessed online at https://sos.oregon.gov/audits/Pages/recent.aspx