{"id":282150,"date":"2026-04-23T15:16:22","date_gmt":"2026-04-23T15:16:22","guid":{"rendered":"https:\/\/www.newsbeep.com\/us-ca\/282150\/"},"modified":"2026-04-23T15:16:22","modified_gmt":"2026-04-23T15:16:22","slug":"some-oc-city-officials-eye-cannabis-to-bail-out-municipal-budgets","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us-ca\/282150\/","title":{"rendered":"Some OC City Officials Eye Cannabis to Bail Out Municipal Budgets"},"content":{"rendered":"

Some elected officials across Orange County are starting to potentially eye legalizing retail marijuana dispensaries to help bring in new revenue to patch up their heavily bleeding budgets.<\/p>\n

The interest in cannabis comes as officials in Irvine<\/a>, Santa Ana<\/a>, Orange<\/a> and Fullerton<\/a> are dealing with multi-million dollar budget gaps, with the latter three eying putting tax measures on the November ballot this year to try and get voters to help them out of the hole.<\/p>\n

Officials have long grappled with cracking down on black market cannabis dispensaries even after a few cities legalized some cannabis businesses.\u00a0<\/p>\n

While state law<\/a> allows cannabis retail shops and delivery services, state legislators ultimately left it up to local officials to allow such sales in their municipalities.<\/p>\n

Now, a couple of city council members in Orange and Fullerton say no revenue option should be off the table to address the deficits as officials across the region are being shown bleak fiscal projections that will require deep cuts to city services and programs to stay afloat.<\/p>\n

In Orange, leaders are more open to explore legalizing and taxing cannabis with a host of restrictions.<\/p>\n

Orange City Councilman Jon Dumitru said all options to generate long term revenue should be thoughtfully considered including cannabis \u2013 a potential tax source that is already helping finance services from some cities in the county.<\/p>\n

\u201cThe question becomes whether Orange should continue to forgo that revenue while residents simply go elsewhere and valuable revenue lost,\u201d he wrote in a Thursday email.<\/p>\n

\u201cI would be open to supporting a well-regulated, carefully structured approach that prioritizes public safety, local control, and community input. That means clear zoning rules, strict operating standards, and ensuring that any revenue generated is reinvested back into the community in a transparent and accountable way.\u201d<\/p>\n

Dumitru and his colleagues are expected to move $17 million from three different spending buckets to balance their general fund budget this summer.<\/p>\n

\"\"A stock image shows a marijuana plant being trimmed. Credit: UNSPLASH<\/p>\n

Meanwhile in Fullerton, City Councilman Ahmad Zahra publicly said his colleagues should consider legalizing marijuana shops during a discussion this month on upping fines and cracking down on illegal cannabis stores.<\/p>\n

[Read: Beefed Up Cannabis Crackdown Comes to Fullerton<\/a>]<\/p>\n

In a phone interview, he said if officials hadn\u2019t backtracked on an ordinance legalizing marijuana five years ago they would have benefited from millions in additional revenues today.<\/p>\n

\u201cBack then, the conservative estimates would have brought in about $3 to $5 million annually to the city, and that\u2019s just from five commercial dispensaries,\u201d Zahra said.<\/p>\n

\u201cThat\u2019s a significant amount of money that we lost over the last several years. Instead, we\u2019re just basically playing Whack-a-Mole with the unlicensed dispensaries.\u201d<\/p>\n

Leaders in Fullerton are facing a projected nearly $14 million deficit in the next fiscal year that could nearly wipe out their reserves if they don\u2019t make cuts as the city seeks a forensic audit amid concerns of an accounting error and questions if staff misrepresented their reserves.<\/p>\n

Still, a couple city leaders in Fullerton don\u2019t think making money off of cannabis should be a solution, while others say it might be too early to explore it.<\/p>\n

Fullerton City Councilwoman Jamie Valencia said she opposed legalizing cannabis.<\/p>\n

\u201cI have a 7 year old and some values are more important than possible city revenue. I oppose it based on my Christian morals,\u201d she said in a Thursday text message.<\/p>\n

The Cash Cannabis Brings into OC Cities\u2019 Pockets<\/p>\n

\"\"Mr. Nice Guy, a cannabis dispensary located on Newport Blvd. in Costa Mesa, on April 7, 2025. Credit: ERIKA TAYLOR, Voice of OC<\/p>\n

Currently, six cities in Orange County allow at least one type of cannabis business within their borders.<\/p>\n

In Orange County, Santa Ana, Costa Mesa and Stanton allow and license cannabis retail stores and delivery, distribution, testing and manufacturing businesses.<\/p>\n

La Habra allows for cannabis delivery, testing and manufacturing, Laguna Woods allows cannabis retail stores and Irvine allows cannabis testing.<\/p>\n

In Santa Ana, about two thirds of their cannabis tax revenue goes to fund youth services and programs as well as enforcement services like police staffing while the remaining one third remains discretionary.<\/p>\n

Last summer, Santa Ana staff estimated the tax would bring in nearly $13 million with about $8.2 million going towards youth services and enforcement services, according to their 2025-26 budget<\/a>.<\/p>\n

According to the 2025-26 budget<\/a>, Costa Mesa officials estimate raking in an estimated $3.6 million in revenue off a 7% tax on retail cannabis sales. The money brought in is used to help finance the city\u2019s first homebuyer fund and the city\u2019s Art and Culture Master Plan.<\/p>\n

In Stanton, cannabis sales brought in nearly $2 million in tax revenue last year, according to their budget<\/a>.<\/p>\n

Challenges With Legalizing Pot<\/p>\n

\"\"A marijuana dispensary in Santa Ana on June 16, 2020. Credit: JULIE LEOPO, Voice of OC<\/p>\n

Despite the additional revenue from cannabis, officials in both Costa Mesa and Santa Ana<\/a> are expected to place tax measures on the November ballot.<\/p>\n

Since its legalization in Costa Mesa, officials have grappled with how to regulate legal dispensaries, introducing buffer zones and capping the number of store fronts allowed in the city amid concerns from local residents while also cracking down on illegal shops.<\/p>\n

In Santa Ana, staff said in last year\u2019s budget cannabis tax revenue has been on the decline, pointing to increased competition from illegal cannabis sales that undercut prices from legal shops.<\/p>\n

Officials there are now part of a host of cities in the region cracking down on local smoke shops<\/a> arguing in part that they sell black market marijuana.<\/p>\n

Dumitru said even if Orange officials legalize marijuana, officials will have to take on news costs and consider a lot of factors like caps on the number of storefronts, location restrictions, community outreach, compliance enforcement and cracking down on illegal shops.<\/p>\n

\u201cIt\u2019s important to view these costs in context. Many cities structure their programs so that application fees, permitting, and local cannabis taxes offset or fully cover the cost of regulation, while also generating net new revenue over time,\u201d he said in an email.\u00a0<\/p>\n

\u201cUltimately, the challenge is designing a program that is responsible, enforceable, and aligned with our community\u2019s expectations.\u201d<\/p>\n

Will Marijuana Help Orange\u2019s Budget Bounce Back?<\/p>\n

\"\"Medical marijuana. Credit: JULIE LEOPO, Voice of OC<\/p>\n

Orange City staff say a cannabis tax could bring in millions of dollars in revenue.<\/p>\n

\u201cBased on projections modeled on other cities with a 7% gross receipts tax, staff estimates an annual revenue of roughly $4 million from a cannabis gross receipts tax,\u201d said Charlene Cheng, a spokeswoman for the city in a Thursday email.<\/p>\n

Mayor Dan Slater publicly said while he opposes cannabis, officials should still consider legalizing sales of it.<\/p>\n

\u201cWe are losing revenue to other cities because we do not allow the sale of cannabis,\u201d Slater said at a city council meeting last month<\/p>\n

He said people will use it regardless of whether the city allows the sale or not.\u00a0<\/p>\n

\u201cThis is a source of revenue that we\u2019re losing with all the hospitals we have, the college\u2019s students we have, I\u2019m sure that they would be customers as well. Not advocating for it. I don\u2019t use it, but people are going to continue to use it, and it\u2019s a revenue source,\u201d Slater said.\u00a0<\/p>\n

Councilwoman Ana Gutierrez, Councilman John Gyllenhammer and Councilman Dennis Bilodeau did not respond to a request for comment last week.<\/p>\n

Councilwoman Kathy Tavoularis said while she never considered cannabis before, officials have to be open to hear all revenue options.<\/p>\n

\u201cIt\u2019s interesting that Orange has such wonderful Grade A hospitals like St Joseph, UCI, etc, and oncology centers. Probably a lot of these people are in the market looking for something after their treatments and they\u2019re probably going to Santa Ana,\u201d Tavoularis said in a Thursday phone interview.<\/p>\n

\u201cObviously, I\u2019m open to hearing if it\u2019s possible.\u201d<\/p>\n

Councilwoman Arianna Barrios said she would be supportive of allowing only medicinal marijuana sales and only allowing stores near the quadrant of hospitals and medical centers in town.<\/p>\n

\u201cI would not be open to them becoming as ubiquitous as the smoke shops that are everywhere and causing us all kinds of problems,\u201d she said.<\/p>\n

Barrios added they\u2019ve been losing revenue on medicinal marijuana to other cities.<\/p>\n

\u201cWe have people who are being given prescriptions for medicinal marijuana and leaving our city to go over to Santa Ana or go over to other cities where they can get those materials instead of staying and keeping that revenue and that sales tax in our city,\u201d she said.<\/p>\n

Fullerton\u2019s Tug-O-War With Cannabis<\/p>\n

\"\"A train passes by Downtown Fullerton on Oct. 5. 2025. Credit: ERIKA TAYLOR, Voice of OC<\/p>\n

In November of 2020, Fullerton City Council members narrowly voted to allow regulated cannabis dispensaries in the city, requiring permits and allowing five facilities for cultivation, manufacturing, retail and distribution.\u00a0<\/p>\n

But months later, officials narrowly repealed the ordinance<\/a> after concerns from residents that the drug would be available to kids and lacked a large buffer zone between schools.<\/p>\n

Mayor Fred Jung, who voted for the repeal back then, said officials initially projected $3 million in tax revenue from the ordinance \u2013 a number he said was inflated \u2013 and highlighted how he opposed how officials planned for one cannabis business in each of the five city council districts.<\/p>\n

\u201cThe notion of one in each district, I think is stupid,\u201d he said in a Wednesday phone interview. \u201cIt\u2019s just nonsense and this is kind of the government\u2019s pursuit of a more egalitarian society that it doesn\u2019t need to be. Just be reasonable about where this can be and cannot be.\u201d<\/p>\n

Jung said now no options should be off the table when it comes to addressing their nearly $14 million deficit, even cannabis, but officials should wait for the results of their forensic audit before taking action.<\/p>\n

\u201cThere\u2019s no sacred cows when you\u2019re in the budget situation that not only we are but other municipalities throughout Orange County are facing,\u201d he said.<\/p>\n

\u201cOnce we have clear understanding from the forensic audit, then we can go about doing a more thorough exploration of our budget challenges for this year.\u201d<\/p>\n

Zahra, who opposed the repeal, said there is a market for cannabis in Fullerton and it should be regulated to protect consumers.<\/p>\n

\u201cIt\u2019s harming our resources and missing out on opportunities for it to invest in our community. I\u2019ve always opposed unlicensed dispensaries, but to not properly organize this and regulate this in our city is, in my opinion, bad governance,\u201d he said.<\/p>\n

Zahra added it is his last year on council and he doesn\u2019t know if his colleagues have the appetite to reconsider cannabis shops.<\/p>\n

\"\"Fullerton City Hall. Credit: EMILY CHO, Voice of OC<\/p>\n

Councilman Nick Dunlap, who also voted to repeal the ordinance, said as a father he was against exploring cannabis as a revenue option.<\/p>\n

\u201cIf that were something that perhaps a committee wanted to vet and that\u2019s something they wanted to put in front of voters, then maybe that\u2019s something to explore but it\u2019s not something I personally believe in and it\u2019s not something that I think the city should pursue,\u201d he said in a phone interview.<\/p>\n

Councilwoman Shana Charles said cannabis is a viable option for revenue but not one officials will likely explore this year.<\/p>\n

\u201cWe do know that it is a source of revenue for cities, so I don\u2019t think it should be completely off the table for the future, but it\u2019s certainly not something I think that we\u2019re going to pursue this year,\u201d she said in a Thursday phone interview.\u00a0<\/p>\n

\u201cIt would be premature to think about it for this year.\u201d<\/p>\n

Hosam Elattar is a Voice of OC reporter. Contact him at helattar@voiceofoc.org.<\/p>\n

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