Budtenders Kate Evans, far left, and Brandon Maniez, right, help customers at Native Roots Dispensary at 1550 Champa St. in Denver, on Dec. 9, 2015. (Helen H. Richardson, Denver Post file)

Denver marijuana regulators’ oversight improved, but still lacking tax transparency, auditor says

Denver’s Office of Marijuana Policy has successfully implemented some suggestions made last year by the city’s auditor; however, the regulatory office continues to fall short on full transparency about how pot tax revenue is spent, a report released Thursday shows.

Denver Auditor Timothy M. O’Brien issued a follow-up report to his 2016 audit of the Office of Marijuana Policy.

The follow-up audit found the office had increased its outreach efforts — via hosting quarterly check-in meetings, publishing bulletins specific to the marijuana industry and by attending Registered Neighborhood Organization meetings. It also noted improvements in documentation for how the office has tracked and monitored its ongoing efforts.

The agency, however, needs to be more transparent about how marijuana revenues will be spent, according to the auditor.

“The department is working to improve transparency and outreach efforts,” O’Brien said in a statement accompanying the report. “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.”

The 2018 budget includes how the approximately $21 million in special sales tax from retail marijuana should be spent: avenues such as regulation, enforcement education and public health efforts around marijuana, as well as deferred maintenance projects for transportation, parks and recreation centers.

However, the auditor’s report says specific programs or efforts were not described in a consistent manner in budget summaries. O’Brien stated that city marijuana regulators had only partially implemented a recommendation to improve documentation and monitoring progress.

Dan Rowland, a spokesman for the Office of Marijuana Policy, said the marijuana taxes revenue and expenditures are found on pages 260-261 of the city’s budget online, with itemized expenditures for $21.2 million. The budget report is also available in the Office of Marijuana Policy’s annual report, he added.

“We are pleased that the auditor continues to find that we are already engaging in best practices, and that Denver has effectively implemented its marijuana regulations, built a collaborative structure for that implementation, and is ahead of its benchmark cities,” Rowland said in a statement emailed to The Cannabist. “The auditor gave us two options for reporting on finances — a special revenue fund or listing it in the budget book. We listed it in the budget book, and as has always been the case, the info is available 24/7 online in our annual report.”

December 8, 2017: This story has been updated to include a response from the Office of Marijuana Policy.

Read the Follow-up report

and the original audit.