State regulators charged with watching over Colorado's medical marijuana industry have fallen short on everything from tracking inventory and managing their budget to keeping potential bad actors out of the business, a state audit released Tuesday found.

Often lauded as a national model, Colorado's so-called seed-to-sale system of regulating medical marijuana does not exist, auditors found.

The findings are a blow to the state Medical Marijuana Enforcement Division as it prepares to take on the additional task of regulating recreational marijuana legalized by Amendment 64.