Sacramento Still Implementing Some Recommendations For Cannabis Regulations Two Years After Auditor's Report

It's been two years since the Sacramento City Auditor made 20 recommendations to improve the city's oversight of the cannabis industry, but some have not been fully implemented. 

According to the auditor's office, the city has fully-implemented 16 of 20  recommendations from 2017 that were made after multiple problems with cannabis dispensaries were uncovered.

The city has only “partly implemented” a plan to find out why dispensaries failed to produce requested financial and membership data at the time of the audit and only partly implemented a plan to have more audits of the industry conducted by an independent firm. 

Also, the city has started but not implemented a program to identify "high-risk" violations of city policy nor has it implemented a plan to perform testing to identify dispensaries that fail to properly report their gross receipts. 

Previous holes in the system allowed one man to have an interest in eight of the 30 dispensaries in the city according to the Sacramento Bee.  He has ties to a group of Ukrainian men charged with federal conspiracy and campaign finance violations.   

Mayor Darrell Steinberg has been on the job as medical marijuana dispensaries made the transition to recreational pot shops. 

"I want to ask for our manager and city attorney to come back to council urgently with recommendations to at minimum temporarily prohibit ownership transfers of our cannabis dispensaries while we audit and examine our processes," Steinberg said at last week’s city council meeting.

City Auditor Jorge Oseguera says his office will prepare an updated review of the city’s progress and present findings to the council soon. He says the permits aren't supposed to be sold, but members can be added if they pass a background check. 

"There isn't really a good mechanism to monitor that. So they have to be honest, up front. We're dependant on them to come forward with that information. It's not like you have shares and the city knows who has shares of this particular collective,” Oseguera said.

The city may not actively track owners, but Malaki Amen of the California Urban Partnership says his group's review shows black people have been left out of ownership opportunities. 

"Not one of the marijuana dispensaries has ownership by people who have qualifications for the city's equity program," Amen said. "Not one of them come from a zip code where there was poverty based on disproportionate arrests for marijuana."