Office of Community and Civic Life 2022 Audit Status Report

Recreational Cannabis Tax: Greater transparency and accountability needed

Report published May 2, 2016 | Follow-up report | Contact Jenny Scott

This is our second follow up on our 2019 audit Recreational Cannabis Tax: Greater transparency and accountability needed. In that report, we found that most of the taxes had been used for police and transportation programs, even though the tax had been promoted to benefit individuals and cannabis businesses owners who had been adversely affected when cannabis was illegal. We made two recommendations to improve the transparency of tax allocation decisions and results, including improving the grants process. The Office of Community and Civic Life has implemented both recommendations. It worked with City Council to change the decision-making process, increase transparency of the tax allocation, and improve the grants process.

On this audit there were two recommendations implemented.

We recommended Civic Life implement a data management system to track data consistently and accurately on licensing, complaints, and enforcement. This data should be used to manage program resources, adjust licensing fees, and report program performance. Civic Life launched a beta version in April of Civic Portal, an online system where cannabis business owners can initiate and manage licenses. The Cannabis Program was using the system to track its compliance and enforcement activity. The program manager planned to tailor the system to help with performance reporting and anticipated the new technology would be fully implemented by the end of 2022. Complaints about cannabis businesses have dropped since the early days of recreational cannabis legalization, so tracking complaints from the public has not been a high priority, according to the program manager. Most complaints currently are received by email. The program manager wants to allow public access to Civic Portal for comments and complaints in the future. (Cannabis Program: Management fundamentals needed to improve regulation)

We recommended that Civic Life inform Council and the public about cannabis regulation through a monitoring report or other communication tools that include information on program performance and the cannabis industry. This information should be used to revise and update program strategy as needed. The program developed fact sheets and presentations and redesigned its website to share information about cannabis rules and regulations, the Cannabis Program, and available grant and emergency funding. The Cannabis Policy Oversight Team, an advisory body to the Office of Community & Civic Life, released three annual reports with insights about the evolving cannabis industry and policy recommendations for the City and state. When Civic Portal is fully operational, the program manager anticipates having additional performance information. The manager would like future reports to include program and industry performance measures. The program hired a limited-term Research & Data analyst to help with measurement and reporting. (Cannabis Program: Management fundamentals needed to improve regulation)

Implemented Recommendation Details

We recommended that the Office of Community & Civic Life work with Council to develop a tax allocation framework that includes tax allocation and oversight committee input on how tax revenue should be allocated. Civic Life worked with Council to change the allocation process by making it transparent and including the public in the allocation decisions. Civic Life convened and worked with the Cannabis Policy Oversight Team, adopted the team’s recommendations, and provided input to Council. Council discussed tax allocations in budget work sessions, and City bureaus requested funding generated by the tax. Civic Life reported cannabis tax allocations to the oversight committee and publicly on its website. (Recreational Cannabis Tax: Greater transparency and accountability needed)

We recommend that the Office of Community & Civic Life develop a grant process, which includes clarifications for how the grants will be awarded and managed, what outcomes will be achieved, and how outcomes will be reported to City Council. Civic Life improved its process by developing goals and a timeline. A community panel reviews proposals for grant funding. Civic Life aligned the grants process in 2021 with the City’s fiscal year and allocated $1.8 million in Social Equity and Educational Development (SEED) grants, which is more than the three previous years combined. The initiative’s goals are to rectify past racially biased cannabis policies and disparate cannabis-related arrests and repair the lasting legal, social, economic, and inter-generational consequences past cannabis prohibition had on Black and brown communities. Civic Life reported the grant allocations to the public and made it easily accessible to potential grantees. (Recreational Cannabis Tax: Greater transparency and accountability needed)

We recommended Civic Life develop and communicate a strategy for the Cannabis Program, including coordination with other City bureaus to streamline the licensing and enforcement process and focus the work of the Cannabis Program. The Cannabis Program developed a three-year strategic plan in 2020. It focuses the work of the program on the restorative and reparative potential of cannabis decriminalization and equitable regulation. The program reorganized the following year to align resources with its new strategy. The reorganization helped staff increase communication and collaboration with the Oregon Liquor and Cannabis Commission and other City bureaus and launch its online licensing and compliance system. Program staff next plan to develop objectives and strategy for 2023-2026. (Cannabis Program: Management fundamentals needed to improve regulation)

Data Notes