Up in smoke: Stanislaus Co. cannabis community fund to run dry

The county’s legal cannabis businesses are being overrun by illegal distributors. The impact is hurting tax revenues and community benefit funds.

Stanislaus County’s cannabis industry, like many of California’s newly-legal markets, is not living up to expectations. 

Various local community groups and nonprofits received thousands of dollars each from the Stanislaus County Community Benefit Contribution Program last week – a distribution that will not be repeated. 


The big picture: The program benefited 25 local nonprofits to the tune of $750,000 total, which came from cannabis fee revenues. 

  • City Ministry Network and Able Works received the two largest shares of the fund with $50,000 a piece. Stanislaus Partners in Education and the State Theatre of Modesto each received $45,000, while the rest of the nonprofits received at least $10,000. 

State of play: This distribution looks to be a one-time occurrence, however, even though the county initially planned for cannabis businesses to regularly contribute to local nonprofits. 

  • Stanislaus County launched its cannabis permit program in 2017, and since then only 18 businesses are up and running. 
  • The county collected $1 million in fees as part of the community contributions program, which was ultimately terminated last May. 
  • The problem: Legal cannabis dispensaries were no longer able to make the required fee payments as their profits were coming in well under projections. 
  • Illegal cannabis distribution in Stanislaus County faces none of the regulations and expenses that the county’s legal dispensaries do, leading to the legal dispensaries getting crushed by black market competition.

What we’re watching: Without a community fund to contribute to, Stanislaus County could explore a variety of other options for cannabis companies to make an impact locally, which reportedly include volunteer time with youth programs.

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