CA: State auditor criticizes cannabis licensing process in Fresno, other CA cities

ABC 30 reports

The State Auditor is zeroing in on the City of Fresno, criticizing how it licenses legal cannabis dispensaries.

In a 60-page audit released last week, the state auditor found the possibility of corruption and conflicts of interest.

State Auditor Grant Parks wrote Fresno’s “process lacks transparency for how potentially lucrative cannabis-related permits are being issued by the city manager, possibly eroding public trust in the process.”

Robin Goldstein is an economist at UC Davis, where he studies cannabis markets. He broke down the audit during an interview with Action News.

“I think the issues in Fresno, in particular, related to having no appeals process for applicants,” Goldstein said. “The idea of no blind scoring. The idea that there wasn’t anonymity in the process was also problematic.”

The report also criticizes the city manager’s power to approve applications, but city communications director Sontaya Rose says that is what the city council wanted.

“The ordinance passed by the Fresno City Council in 2018 gives the City Manager responsibility and authority for developing the permit application evaluation process and for issuing permits,” Rose said. “However, the Mayor and City Council has the authority to appeal that decision.”

Fresno is not alone. The audit also found problems with how three other California cities and two counties license their dispensaries. Goldstein says he’s not surprised.

“The widespread problem all across the state is these limitations – these artificial quotas or these artificial caps on the number of licenses that can be awarded,” Goldstein said. “When you have artificial intervention where some producers are allowed to produce, and others are not, consumers lose. They pay higher prices for lower quality.”

The City Council President and the city’s communications director tell Action News Fresno would consider the audit’s recommendations in the future.