The state’s inspector general has found that the Cannabis Control Commission experienced an “egregious operational breakdown” when they failed to collect over half-a-million dollars in licensing fees over a two year span.

According to a letter sent by Inspector General Jeffrey Shapiro to acting commission Chair Bruce Stebbins and Executive Director Travis Ahern, the CCC failed to collect $550,000 in “prorated licensing fees” and up to $1.2 million in “provisional license fees” between August of 2022 and August of 2024.

“I recognize that neither of you held leadership positions at the CCC during that two-year period, but as the CCC’s current leaders you must definitively act on the recommendations in this letter,” Shapiro wrote.

Shapiro is calling on the commission to conduct an audit of their licenses to make sure all fees have been paid in accordance with state law.

In his letter, the IG says that the problem first came to his attention in July of 2024, when a complaint was lodged with his office that the commission was not collecting licensing fees as required by statute.

An ensuing investigation revealed, Shapiro wrote, “that CCC staff members did not take action on an August 11, 2022 vote by the commissioners to collect prorated fees on license extensions. This inaction resulted in more than $550,000 in foregone revenue.”

“The OIG also found that for almost two years the CCC did not collect fees from more than 120 provisional license applicants, which at one point may have been as much as $1.2 million. While the OIG’s investigation did not find fraud, it does suggest poor business practices and oversight,” he wrote.

That’s not all his staff found, according to the IG.

“Perhaps more troubling than the uncollected fees is the fact that CCC staff were granting license extensions without authority, and then, when given the authority, failed to collect the associated prorated fee,” Shapiro said in a statement.

As he has for many months, Shapiro blamed problems at the CCC on the way its structured under state law, which he’s determined holds too much ambiguity when it comes to precisely who is actually in charge at the agency — the head of its commission, or its executive director.

“I am optimistic that the new executive director is committed to establishing sound operational practices and management. However, that will not overcome the fact that the Commission’s enabling statute does not clearly define the authority of the Chair and the Executive Director. Until that issue is addressed, I fear that responsibility and accountability will continue to be elusive, and the Commission will struggle to gain its footing to chart a proper path forward,” he said.

Ahern, in a statement shared with the Herald by CCC staff, said that, while the agency is glad to hear that Shapiro hasn’t found fraud as he investigates, they don’t necessarily believe that he’s reached the same legal conclusions they have about the fees they are due.

“The public deserves a full and clear explanation of this issue, particularly around the alleged $1.2 million in uncollected provisional license fees referenced in the OIG’s letter. These fees never could have been invoiced since these applicants were not under any obligation to pay the Commission unless they intended to move forward with the licensing process towards opening a cannabis business,” Ahern said.

According to the executive director, only a “very small number” of the provisional applicants actually went on to open a business, and that all of the fees due from provisionally approved applicants that did make it that far “were properly paid, collected, and accounted for.”

“The $1.2 million in uncollected provisional application fees referenced in the OIG’s letter is subject to misinterpretation. To be clear, fees from provisionally approved applicants are only due if the applicants choose to proceed to final licensure,” he said.

Of the more than half-a-million in fees the state is owed and which the IG identified, Ahern said most of that money has already been recovered, but some simply can’t be.

“The Commission is well on its way to collecting these fees with just $170,000 outstanding as of this week. Some of these fees might be uncollectible as some businesses have ceased to operate,” he said.

The IG says the CCC needs to tighten up. (JOSH EDELSON/AFP via Getty Images)

Originally Published: March 27, 2025 at 5:50 PM EDT