In a new audit released Thursday, Portland’s independent city auditor says the city’s cannabis program needs to implement an improved strategy to better regulate the emerging industry.

Alexandra Fercak, a performance auditor with Portland Audit Services, said it comes down to the Office of Community and Civic Life, which oversees the cannabis program, struggling to meet obligations.

“In order to effectively regulate the cannabis industry here in Portland, we found that the program does not have some very basic management fundamentals,” Fercak said.

“We found that the program doesn’t really budget based on workload development and strategy.”

The audit found the Office of Community and Civic Life lacks a system to track data on cannabis licensing and enforcement.

The report states auditors interviewed managers and staff from the Office of Community and Civic Life and cannabis regulation stakeholders, and reviewed industry feedback on regulation challenges.

Oregon legalized the sale of recreational cannabis in 2014. In early 2016 the city of Portland began regulating businesses that grow, produce or sell cannabis.

The audit recommends the Office of Community and Civic Life should “develop a program strategy, implement a data management system to consistently track program performance and results, and develop communication tools to inform Council and the public about cannabis regulation.”

“While I appreciate the challenge of implementing a regulatory system for an emerging industry, fundamental management tools must be prioritized and in place to ensure the success of any program,” Portland City Auditor Mary Hull Caballero said in a statement.

“Our recommendations are well within the reach of the Office of Community and Civic Life, and I am pleased to see management has agreed to implement them.”

This is the second audit on cannabis regulation conducted by the Portland city auditor. In 2019, a report from the auditor revealed that most of the collected taxes from cannabis have gone toward the city’s general fund, police and transportation programs.

The Office of Community and Civic Life, headed by director Suk Rhee and overseen by Commissioner Chloe Eudaly, formally responded to the cannabis audit.

“The effort to develop a city-wide strategy requires alignment of perspectives on regulation from City Council,” the response reads.

“The program did not benefit from such alignment in the first three of its four years in existence; emerging agreement over this last year is a positive step forward for the City.”

The office said it looks forward to continued improvement as it adapts to emerging economic, cultural and regulatory conditions for cannabis.

This story has been updated for clarity.