Four years after recreational cannabis was legalized in California, the Humboldt County Civil Grand Jury has a released report entitled "A Growing Concern." The report focuses on the Planning and Building Department's record keeping and cash handling procedures for the cannabis industry.
"There is a notable lack of in-depth reporting of revenues and expenditures that would accurately show the citizens of Humboldt County the effectiveness and the operational and fiscal efficiency of the Cannabis Planning program," the report states.
Part of the problem, according to the report, is that cannabis remains a Schedule 1 substance under federal law, meaning banks will not allow cannabis cultivators to open accounts or establish lines of credit. As a result, permit fees and abatement fines collected by the county are often paid in cash.
"The Planning and Building Department assumes the risk inherent in the storage and handling of large sums of cash," the report states, requiring "a highly transparent, very accurate system of accounting."
The report concludes with the recommendation that the Planning and Building Department take the following actions: Update the website to reflect changes in regulations and offer relevant information regarding permit applications; undergo an audit by the Auditor/Controller of all incoming receipts, and make the results public; hire a qualified accountant to organize and maintain financial records; and direct customers who pay in cash through the Treasurer-Tax Collector's office.
The report can be read in its entirety below.
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