Oregon’s system for regulating marijuana needs to be strengthened, according to an audit by the Secretary of State’s Office.

The audit cites weak regulations and a significant oversupply as fuel for the black market, which auditors feared could lead to a federal crackdown.

“Preventing diversion is imperative to ensure federal authorities maintain confidence in Oregon’s ability to adequately regulate the use and sale of marijuana,” Secretary of State Dennis Richardson said. “As the market is still developing, agency tracking of Oregon’s marijuana supply and inspections is lacking.”

The audit found the Oregon Liquor Control Commission has many systems to track marijuana. But without a cap on the number of licenses, inspections haven’t kept pace with production.

The audit found only 3 percent of retailers and a third of growers have had a compliance inspection. It also said that without a verification mechanism, the marijuana testing program can’t ensure a safe product.

OLCC Director Steve Marks agreed his agency needs more inspectors.

“We need to be out there with resources to do these inspections. Also, (a) focus on the evolution of regulating laboratories more aggressively,” Marks said.

Responding to the audit, Marks said he generally agrees with the 23 recommendations in the report. But he said the OLCC has worked hard.

“Even with its considerable imperfections, Oregon’s aggressive testing standards are nation leading and important to marijuana regulation across the nation and internationally,” Marks said. “Laboratory regulation is an important policy area for all states regulating both medical and recreational marijuana.”

The director of the Oregon Health Authority, Pat Allen, also thanked the Secretary of State’s Office for the audit. But he said some of the 23 recommended changes will require legislative changes and that those “fall outside of the scope of OHA’s current statutory authority.”

Lawmakers plan to take a look at the report and decide which recommendations need to be dealt with this legislative session.