Las Vegas Review-Journal (Sunday)
Oregon typifies industry pot-tracking woes
Short-staffed agency can’t keep pace with regulatory caseload
SALEM, Ore. — To the beat of electronic dance music, men and women inside a slate-gray building harvested marijuana plants festooned with radio-frequency identification tags. In another room, an employee entered the tag numbers into a government database.
The cannabis tracking system used by Avitas, a marijuana company with a production facility in Salem, is the backbone of Oregon’s regulatory system to ensure that businesses with marijuana licenses obey the rules and don’t divert their product into the black market.
A huge amount of data is entered into the system by Oregon’s 1,800 licensees every day, a reality that means the state has a tremendous amount of information at its fingertips. But the reality also is the state doesn’t have the manpower to monitor all that data.
The marijuana regulatory agency, the Oregon Liquor Control Commission, has only one marijuana data analyst and not enough inspectors to randomly inspect grow sites and processing facilities to ensure the accuracy of the data they are providing.
A recent state audit concluded that the lack of trained inspectors and “reliability issues” with self-reported data hurt the commission’s monitoring of Oregon’s adult-use marijuana program.
“I think this is a fundamentally sound system,” said the commission’s executive director, Steve Marks. But, he conceded, “It’s not being used to its capabilities. We don’t have the workforce there.”
Oregon’s experience is reflective of one of the significant challenges in the expanding legal U.S. marijuana industry: the ability of governments to keep track of their own markets.
Washington recently switched tracking contractors after it outgrew the first system, and it quickly ran into major technical problems. Colorado has reported no significant technical issues but has only five people on the data analysis staff to help with investigations and look for potential violators.
Last year, Nevada switched tracking companies after its first system crashed. California became the world’s largest legal marijuana market on Jan. 1 without the promised vast computer system for tracking. It won’t be available for months.
The Oregon tracking system was created by Franwell, a Florida-based technology company that has contracts in a handful of states, including California.
The flood of data is checked by the single full-time marijuana data analyst, with occasional help. Five more will be hired soon, but they’ll have their hands full as an estimated 2,000 medical marijuana growers start entering the tracking system on July 1.
According to the Oregon Liquor Control Commission, a recent inventory of adult-use marijuana in the state stood at more than 1 million pounds.
Avitas general manager Joe Bergen said the pot businesses are inputting a “ridiculous” amount of information to the tracking system.
The data have been useful in confirming wrongdoing in roughly 50 investigations, though less than half of them were triggered by the data, commission spokesman Mark Pettinger said.
Cannabis producers and regulators compare the tracking system to filing income taxes. They operate to a large extent on good faith, but when an auditor or inspector comes, there better be evidence to back the numbers.
However, the chances of a “compliance inspector” showing up at a site are low.
Companies that have gone the legal route — paying for licenses, security and other systems to meet the requirements — say regulators should focus on those who remain outside the legal system. They note the illegal producers are unfair competition, without the large overhead.
“Really, there is no incentive for us to do anything but stay in the recreational market,” said Bergen. “Why would we have gone to all this trouble just to lose our license from doing something stupid like selling on the black market?”