Auditor finds Denver could do more to ensure marijuana tax revenue goes to right places

Denver officials are trying to improve transparency around where marijuana tax revenue is going, but there’s still room for improvement.

staff photo
Maat Khan behind the counter at Simply Pure. (Chloe Aiello/Denverite)

Maat Khan behind the counter at Simply Pure. (Chloe Aiello/Denverite)

Denver officials are working to show more details about where marijuana tax revenue is going, but there’s still room for improvement, according to the Denver Auditor’s Office.

Recommendations from a 2016 audit pointing out ways the city could be more transparent about how pot taxes are being spent have been “partially implemented.” But the 2018 budget for the city does not detail how each Denver agency is using the money generated from legal marijuana sales, the auditor’s office announced Thursday in a follow-up report.

The initial audit looked at the Office of Marijuana Policy. The office is now part of the Department of Excise and Licensing.

“The department is working to improve transparency and outreach efforts,” Auditor Tim O’Brien said in a statement. “It could still improve disclosure around specific planned uses of recreational marijuana tax revenues, to ensure the money is used as many voters wanted when they approved legalization of recreational marijuana.”

Voters indicated tax dollars from marijuana sales should go toward education, enforcement, public health and other expenses related to operating the city and its facilities.

In August, O’Brien recommended changing how the tax revenue is handled by the city.

“Having a special revenue fund where you segregate those revenues and the expenditures, whatever they’re for, is a more transparent, accountable way to deal with those kinds of dollars,” O’Brien said at the time. “Right now I would suggest … that the general fund is profiting from the marijuana business.”

This year, the Department of Excise and Licenses worked to include information about marijuana-related expenditures in the city budget, improving transparency from past years. The department also showed significant progress in building relationships with neighborhood organizations and marijuana businesses through community outreach efforts, according to the auditor’s office.

“I’m pleased to see the proactive relationship-building in neighborhoods across Denver,” O’Brien said. “It’s important to keep residents involved and informed as our city continues to adapt to this unique new industry.”

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Business & data reporter Adrian D. Garcia can be reached via email at agarcia@denverite.com or twitter.com/adriandgarcia.

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