Fresno’s cannabis industry continues to miss the sky-high expectations from City Hall, forcing the city to once again adjust its budget to account for lower tax revenue.
The Fresno City Council looked at the low cannabis tax revenue during last week’s meeting.
The backstory: Fresno’s first cannabis dispensaries opened in July 2022 following a competitive process to award 21 retail licenses throughout the city.
- In that time, however, only 13 retail dispensaries have opened their doors to the public.
- Fresno City Council member Tyler Maxwell pointedly questioned city officials about the state of legal weed in the city, noting that it “seems to be the one thing that we always have the rug pulled from under us.”
By the numbers: The Fiscal Year 2025 budget projected over $7.12 million in cannabis tax revenue to fill the city’s coffers.
- But the city is now decreasing that projection in its mid-year budget review by nearly $4 million to $3.16 million.
Driving the news: City Manager Georgeanne White said during last week’s meeting that the issue is largely due to the tax revenue coming in well below projections.
- Each dispensary projects what their revenue will be for the year. The city took 25% off of those projections to play it safe, leading to the $7 million budget projection, White said.
- Looking at four dispensaries, White said their projected revenue is off by 23% to 65%. In total, Fresno’s retail dispensaries are averaging 46% less than what their projected revenue was.
- The city thinks the projections are significantly off because of market saturation and competition from the illegal market.
Flashback: The $7.12 million projection for Fiscal Year 2025 was a 215% increase from the actual total from the previous year.
- For Fiscal Year 2023, the city budgeted $5.3 million in cannabis sales tax revenue but only took in $1.58 million.
- Last year the city projected $5.38 million but only ended up with $2.26 million in revenue.
