The Nevada Dispensary Association is responding to a recent state audit that was critical of the seed-to-sale tracking system the marijuana industry uses, noting that auditors did not find cannabis was diverted to or from the black market and suggesting that confusion over new software led to reporting errors.
State auditors found frequent discrepancies between the amount of sales that are logged into the seed-to-sale tracking software METRC, and those reported on state tax returns. The association, which represents numerous marijuana businesses, did not comment last Thursday at a meeting when the audit was first discussed, but provided a statement to The Nevada Independent about the findings this week.
“Inaccurate entry, confusion over batching and tagging during the program’s rollout and destruction of unusable marijuana are likely responsible [for] a vast majority of the discrepancy between Department of Taxation sales data and METRC data,” association representatives wrote, emphasizing that auditors uncovered no instances of diversion to the illegal market in their review.
The audit suggested that with data incongruencies between the tax returns and the software, the state could have been losing out on $500,000 in tax revenue in a six-month period. Auditors noted that the Nevada Department of Taxation, which regulates the industry, did not provide supporting documentation that might have shed more light on why there were discrepancies.
“METRC is effective for preventing diversion, but I don’t know that it will ever be the best tool for calculating taxable sales,” Brett Scolari, general counsel for Reef Dispensary and an NDA board member, said in the statement.
As for a finding that high-potency products limited to medical marijuana patients were sold to recreational customers with relative frequency, the association said members “are vigilant to only sell tested, clearly labeled and legally appropriate products” to customers and posited that the