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WEBVTT READY HAVING.rtTOM: IT'S A BUDDING INDUSTRYTHAT SACRAMENTO SAYS IS BREAKINGALL THE RULES.THE PRIMARY PROBLEM NOTREPORTING REVENUE OR PAYINGTAXEIN ONE CASE, A CITY AUDIT FOUNDA DISPENSARY WAS NOTES,GRAPHICrt-- WAS MORE THAN $100,000 SHORTIN TAXES OWED.SACRAMENTO AUDITOR JORGEOSEGUERA LED THE INVESTIGATION.NOTES,CLIP 1 4:07 >> PART OFrt OUR TESTING INVOLVEDDOING SOME IN PERSONOBSERVATIONS OF THE ACTUALDISPENSARIES AND DOCUMENTINGEVERY TRANSACTION OCCURREDDURING THE COURSE OF OUROBSERVATION.rtTOM: FIVE OF THE SIXDISPENSARIES AUDITED DIDN'TPROVIDE MONTHLY GROSS RECEIPTS,FINANCIAL STATEMENTS, ORMEMBERSHIP LISTS WHILE NONrtPROVIDED VENDOR LISTS.IN THE CASE OF ALL ABOUTWELLNESS, THE OWNER WASN'TWILLING TO SHARE ANYTHINGLEAVING THE CITY IN THE DARK ONINFORMATION IN EIGHT DIFFERENTCATEGORIES.rt PERHAPS THEY SHOULDN'T BEOPERATING IN THE CITY.TOM: IN ONE CASE, AN EMPLOYEEWAS SEEN CONSUMING MARIJUANA ATTHE DISPENSARY, A MAJOR NO NO.THREE DISPENSARIES DIDN'T HAVErtSECURE DOORS OR THE REQUIREDSIGNS POSTED.ALL THAT MEANS IS THAT PEOPLEHAVE THE ABILITY TO SEE THESESIGNS.rtTOM: LANETTE DAVIES OWNS CANNACARE, ONE OF THE SACRAMENTODISPENSARIES THAT WAS NOTAUDITED.SHE WORRIES A POOR AUDIT CANHAVE A RIPPLE EFFECT.>>rt IF WE CANNOT HONEST,TRANSPARENT AND OPEN THEN OURWHOLE INDUSTRY FAILS.TOM: CURRENTLY THE CITY ALLOWS30 PERMITTED DISPENSARIES JOErtDEVLIN OVERSEES THEM ANDACKNOWLEDGES HIS DEPARTMENT'SSHORTCOMINGS.>> MOVING FORWARD, WE'RE GOINGTO BE INTENSIFYING OURINSPECTIONS FOR ALL CANNABISBUSINESSES.rtTOM: PROMISING TO REIGN ININDUSTRY THAT RIGHT NOW IS GOINGROGUE.

Advertisement Audit: Sacramento medical marijuana dispensaries don't follow laws Dispensaries were also found breaking city code Share Shares Copy Link Copy

A scathing city audit looking into Sacramento’s medical marijuana industry concluded dispensaries may be underreporting revenue and receipts, not paying enough in taxes and are underregulated by the city.Of the six dispensaries whose finances were audited, four did not provide any information whatsoever. The city auditor asked the dispensaries for information on monthly receipt records, financial statements, tax returns, memberships and vendor list and more.Sacramento Auditor Jorge Oseguera led the investigation and said his staff went to dispensaries to kept track of purchases. Based on what they observed, they were able to estimate how much the dispensaries should be reporting in revenue and paying in taxes.In one case, a dispensary was more than $100,000 short in taxes owed.Meanwhile, the dispensary All About Wellness failed to let auditors inside, much to the frustration of Oseguera.“This is critical for the city to be able to do if we’re going to allow these dispensaries within the city," Oseguera said. "And to the extent that (the audits were) contested, well perhaps they shouldn’t be operating in the city.” Dispensaries also failed to meet city code during surprise on-site inspections.Violations included not posting the required signs, not securing doors, selling medical marijuana to people other than qualified patients and allowing the on-site consumption of marijuana.None of the medical marijuana dispensary owners audited talked to KCRA 3 about the audit's results. At Sacramento’s Canna Care, a dispensary that was not audited, owner Lanette Davies said a poor audit can have a ripple effect.“If we cannot be honest transparent and open, then our whole industry fails,” she said.Sacramento currently permits 30 medical marijuana dispensaries to operate within city limits. Last year, they paid the city more than $4.5 million in taxes.Sacramento’s Cannabis Policy and Enforcement Department is promising stricter enforcement as a result of the audit.“Moving forward we’re going to be intensifying our inspections for all cannabis businesses,” Cannabis Policy and Enforcement Chief Joe Devlin said. “They’re going to have to operate within what I could describe as strict scrutiny.”