A state employee who works at the department regulating medicinal marijuana is applying for a dispensary license from that very agency — a potential conflict of interest that raises questions about how well the state can regulate the billion-dollar pot industry, a watchdog said.

“It’s astonishing, really, that someone would attempt to work both at a regulatory agency and the entity it’s regulating,” said David Tuerck of the Beacon Hill Institute.

He added just the appearance of conflict could lead to suspicions of favoritism and “raises doubts in the minds of voters whether the government is operating on their behalf or on the behalf of government bureaucrats.”

State officials officially approved the creation of a Cannabis Control Commission last month that will regulate and distribute licenses for both recreational and medicinal pot. But while that commission is getting off the ground, the state Department of Public Health has been overseeing the licensing and operation of medicinal marijuana dispensaries, including one that’s opened in Boston.

According to DPH documents, Petrichor Medicinal Corp. filed an application of intent — which lays out financial information but no potential site plans — to open a dispensary in May and provided additional information to DPH two weeks ago. Petrichor’s president and CEO is Nicolette Smith, who DPH officials confirmed works in the department.

Smith did not respond to multiple requests for comment from the Herald.

Smith, according to state records, is a program manager at DPH with a salary of $56,682.

A spokesman for Gov. Charlie Baker deferred comment to the DPH, whose spokesman said the application was in the very early stages of the approval process and would have to go through background checks if it were to move forward.

“There is no indication on the application of intent that Ms. Smith is one of the 3,000 employees of the Department,” said DPH spokesman Tom Lyons in a statement. “The application of intent is the first step in a long process. There has been no action taken to move this application to the next stage. If the applicants are invited to move forward they are subjected to thorough background and employment checks.”

Tuerck said DPH not flagging the application was particularly troublesome in the wake of Baker and Attorney General Maura Healey refusing to name the candidates vying for seats on the Cannabis Control Commission, who must be appointed by the end of the month.

“When you’re dealing with a product like marijuana that’s been illegal, it’s especially important to be careful about the process,” Tuerck said. “It looks more and more like there’s a certain carelessness going on, that should be unacceptable to taxpayers and voters.”