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Cannabis Program: Management fundamentals needed to improve regulation of emerging industry

Report
An illustration of a cannabis leaf and a four-square grid with text that says, "Program strategy, enforcement data, licensing data, and budget and fees."
Like other businesses that operate in Portland, cannabis businesses must meet various building, safety and environmental requirements. This audit focused on the responsibilities and activities of Civic Life. We did not include a review of the permitting process at the other City bureaus.
Published

Background

New regulatory structure created to respond to legalization

The State of Oregon legalized the sale of recreational cannabis in 2014, and in early 2016 the City of Portland began regulating businesses that grow, produce, or sell cannabis. City Council directed the Office of Community and Civic Life (at the time Office of Neighborhood Involvement) to develop and manage the regulatory process.

The purpose of the regulation is to protect and preserve the public health, safety, and general welfare of Portland communities by setting requirements for the licensing and siting of cannabis businesses. Specifically, Council directed Civic Life to enforce the City’s cannabis regulation and manage complaints and community expectations related to the sale and consumption of cannabis.

Recreational cannabis sale and consumption was not regulated until 2016. City Council did not know how the new recreational cannabis industry would affect the City’s businesses and residents. Council established in an ordinance the purpose of regulation but didn’t set specific regulatory processes. Instead, it asked Civic Life to be responsive to the developing industry, while balancing business and public health needs, as they developed the process for cannabis regulation and proposed City Code.

Various City and State agencies involved

While Civic Life oversees the City’s recreational cannabis regulation, the full process involves different City bureaus and the State. The Oregon Liquor Control Commission administers the State recreational cannabis regulation and issues licenses to businesses. The Commission was charged with inspecting all cannabis businesses that operate in Oregon to ensure they meet the various State requirements.

Businesses that operate in Portland must get both a license from the State and a license from Civic Life. Civic Life inspectors conduct onsite inspections to verify that businesses are meeting all City requirements.

Like other businesses that operate in Portland, cannabis businesses must meet various building, safety and environmental requirements. When a cannabis business applies for a license, it may have to work with the Bureaus of Development Services, Fire and Rescue, and Environmental Services to obtain the necessary permits to operate. Businesses are also required to register with the Revenue Bureau for tax collection purposes and comply with general business requirements.

This audit is focused on the responsibilities and activities of Civic Life. We did not include a review of the permitting process at the other City bureaus, such as Development Services or Revenue.

View our audit report and recommendations

View the audit highlights

Contact

Alexandra D. Fercak

Performance Auditor II

Jenny Scott

Performance Auditor III

Dylan Cain

Audit Services Intern
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