Blowing smoke? Fresno projects jarring boom in cannabis sales.

Fresno’s cannabis tax revenue has become an early sticking point in the city’s budget negotiations.

The Fresno City Council kicked off its budget hearings on Monday, the first step to approving a balanced budget by the end of the month. 

Part of the discussion on the general fund centered on Fresno’s cannabis tax revenue, which the city is projecting to increase by over 360 percent. 


The big picture: Thus far only two retail cannabis dispensaries have opened in Fresno, both of which came on the same day last July in a push to be the first in city history. City ordinance allows for 21 dispensaries spread throughout the city. 

  • City councilmembers raised the point that the slow-to-open sector makes any substantial projections for cannabis tax revenue difficult, which ultimately paints a murky picture of what the city’s expenses can truly be to account for a balanced budget. 
  • Assistant City Manager Jennifer Ruiz, who oversees the city’s cannabis operations, expects nine more dispensaries to open throughout fiscal year 2024 and substantially increase tax revenue. 

By the numbers: The city is projecting cannabis tax revenue to be $5,381,400 million in fiscal year 2024, which would be a 360.4 percent increase from the current year. 

  • The estimate for fiscal year 2023, which wraps at the end of the month, is $1,168,900. That number comes in as a severe underperformance compared to the initial projections for fiscal year 2023. 
  • The city initially thought the cannabis tax revenue would bring in $5.3 million this year, but it dropped its projection to $2.1 million at the mid-year budget revue in February. Yet the projection made at the mid-year budget review has now ended up about double of what the actual revenue is shaping out to be just four months later. 

What they’re saying: Ruiz said the expectation that nine more dispensaries will open in the following year is a “conservative estimate, but there are still a lot of variables with these sites opening.” 

  • Councilman Miguel Arias took issue with the tax revenue projections, saying businesses have always been delayed from opening in Fresno due to inspections, permits and other issues, giving him little confidence that the $5.38 million projection for fiscal year 2024 will be accurate. 
  • “All these cannabis numbers have been wrong since Day 1,” Arias said. “The projections have been off. The amount of companies opening when they’re supposed to open have been off, but we keep on being asked to adopt budgets that assumes that revenue coming in.”
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