The state’s inspector common has discovered that the Hashish Management Fee skilled an “egregious operational breakdown” once they failed to gather over half-a-million {dollars} in licensing charges over a two 12 months span.
In line with a letter despatched by Inspector Basic Jeffrey Shapiro to performing fee Chair Bruce Stebbins and Govt Director Travis Ahern, the CCC failed to gather $550,000 in “prorated licensing fees” and as much as $1.2 million in “provisional license fees” between August of 2022 and August of 2024.
“I recognize that neither of you held leadership positions at the CCC during that two-year period, but as the CCC’s current leaders you must definitively act on the recommendations in this letter,” Shapiro wrote.
Shapiro is looking on the fee to conduct an audit of their licenses to verify all charges have been paid in accordance with state regulation.
In his letter, the IG says that the issue first got here to his consideration in July of 2024, when a grievance was lodged together with his workplace that the fee was not gathering licensing charges as required by statute.
An ensuing investigation revealed, Shapiro wrote, “that CCC staff members did not take action on an August 11, 2022 vote by the commissioners to collect prorated fees on license extensions. This inaction resulted in more than $550,000 in foregone revenue.”
“The OIG also found that for almost two years the CCC did not collect fees from more than 120 provisional license applicants, which at one point may have been as much as $1.2 million. While the OIG’s investigation did not find fraud, it does suggest poor business practices and oversight,” he wrote.
That’s not all his employees discovered, in response to the IG.
“Perhaps more troubling than the uncollected fees is the fact that CCC staff were granting license extensions without authority, and then, when given the authority, failed to collect the associated prorated fee,” Shapiro mentioned in a press release.
As he has for many months, Shapiro blamed issues on the CCC on the best way its structured below state regulation, which he’s decided holds an excessive amount of ambiguity on the subject of exactly who is definitely in cost on the company — the top of its fee, or its govt director.
“I am optimistic that the new executive director is committed to establishing sound operational practices and management. However, that will not overcome the fact that the Commission’s enabling statute does not clearly define the authority of the Chair and the Executive Director. Until that issue is addressed, I fear that responsibility and accountability will continue to be elusive, and the Commission will struggle to gain its footing to chart a proper path forward,” he mentioned.
Ahern, in a press release shared with the Herald by CCC employees, mentioned that, whereas the company is glad to listen to that Shapiro hasn’t discovered fraud as he investigates, they don’t essentially imagine that he’s reached the identical authorized conclusions they’ve in regards to the charges they’re due.
“The public deserves a full and clear explanation of this issue, particularly around the alleged $1.2 million in uncollected provisional license fees referenced in the OIG’s letter. These fees never could have been invoiced since these applicants were not under any obligation to pay the Commission unless they intended to move forward with the licensing process towards opening a cannabis business,” Ahern mentioned.
In line with the manager director, solely a “very small number” of the provisional candidates really went on to open a enterprise, and that the entire charges due from provisionally accredited candidates that did make it that far “were properly paid, collected, and accounted for.”
“The $1.2 million in uncollected provisional application fees referenced in the OIG’s letter is subject to misinterpretation. To be clear, fees from provisionally approved applicants are only due if the applicants choose to proceed to final licensure,” he mentioned.
Of the greater than half-a-million in charges the state is owed and which the IG recognized, Ahern mentioned most of that cash has already been recovered, however some merely can’t be.
“The Commission is well on its way to collecting these fees with just $170,000 outstanding as of this week. Some of these fees might be uncollectible as some businesses have ceased to operate,” he mentioned.
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