Colorado marijuana dispensaries often go unchecked by regulators

One in five retail marijuana dispensaries in Colorado did not undergo an inspection in the last five years, while others found in violation of the law largely avoided penalties, according to a new state audit.

Driving the news: The findings show the Polis administration's lax enforcement of policies that require checks for underage sales, as well as widely varied inspection rates across the state.

• One store was examined 19 times in a four year period, even as less than 50% of marijuana shops were inspected in six counties, auditors told a legislative panel Monday.

Why it matters: The discrepancies raise questions about whether the state's marijuana division is effectively fulfilling its mission to protect public safety, auditors warned.

• The haphazard inspection pattern suggests regulators may be unfairly targeting some retail shops while favoring others.

How it works: Colorado conducts targeted inspections based on the level of risk for violations and uses underage operatives to test compliance with laws limiting retail marijuana to people over age 21.

What they found: The audit found about one-third of the dispensaries on the targeted list were not examined for compliance or underage sales.

• A similar proportion of new stores did not undergo a check within their first year as required.

The intrigue: When inspections led to violations, the division did not pursue consistent disciplinary action, auditors found, blaming unclear agency policies for the disparities.

• 63% of dispensaries received a verbal and written warning, while just 14% reached an agreement or order.

What they're saying: Mark Ferrandino, who at the time of the audit led the Department of Revenue, which oversees marijuana regulation acknowledged to lawmakers that "there is definitely room for improvement" and said a new tracking system is being developed. The agency also is grappling with staffing shortages.

• In addition, he said the agency values "education and working with our licensees so they understand the laws … and not just be enforcement."

The big picture: The numbers show in-person inspections tumbled during the pandemic and remain below 2019 levels.

• The Polis administration did not conduct any underage checks for nearly a year after the start of the pandemic given public health concerns, despite a peak in marijuana sales, the audit revealed.

Of note: Two Democratic state senators concerned about underage marijuana use, Chris Hansen and Kevin Priola, requested the audit.

• The enforcement agency's "work is so important for public safety and making sure we are protecting our youth," Hansen told Axios, adding he's looking forward to seeing changes made.

Editor's note: This story has been updated to include comments from Sen. Hansen.