Oregon Audit Forces State Official to Resign Cannabis Consultancy

Other state lawmakers had criticized the business arrangement.

Oregon’s secretary of state on Monday cut ties with a marijuana business she’d been consulting with after the business arrangement came to light following a state audit of Oregon’s cannabis industry.

“I exercised poor judgment by contracting with a company that is owned by my significant political donors and is regulated by an agency that was under audit by my Audits Division,” Secretary of State Shemia Fagan said in a press release, which also stated her consulting deal with Veriede Holdings LLC has been terminated.

Fagan, a Democrat, faced both Republican calls for her resignation and criticism from fellow Democrat Gov. Tina Kotek over the apparent conflict of interest, after it came to light last week that Fagan had taken paid work with Veriede Holdings, a cannabis company affiliated with La Mota, a retail chain.

Though Fagan defended her actions as being in line with state law and ethics rules, she said in the statement she “broke your (voters’) trust. That was wrong. I am truly sorry.”

Fagan released her contract with Veriede Holdings, which KPTV reported was paying Fagan $10,000 with a potential bonus of $35,000 if the company won any marijuana business permits in states other than Oregon and New Mexico.

Fagan’s consulting work emerged at about the same time her office released a statewide audit of Oregon’s cannabis industry, which advised regulators to pivot and prepare for interstate commerce and a national competitive marijuana market.

The audit found that “expensive regulations” crafted in 2014 are essentially outdated and now only pose barriers for the competitiveness of Oregon marijuana companies, The Hill reported. Instead, the audit authors argued, state policymakers should consider business incentives and rewriting industry rules that no longer make sense and are primarily a hindrance to growth.

John Schroyer

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