cannabis tax grant program in South Lake Tahoe will continue for at least one more year after the City Council voted to renew it while staff develops longer-term funding options. The program currently holds about $400,000 from city cannabis tax receipts and has directed $1,666,551 to local nonprofits over the past four years.
When South Lake Tahoe approved adult-use cannabis sales and the related tax framework, officials set aside half of cannabis tax receipts to fund community mitigation grants. Measure G, approved by voters in 2022, authorized a gross receipts tax of up to 6% on retail, distribution and manufacturing, plus $20 per square foot of canopy for cultivation. Measure G projected roughly $950,000 annually while it remained in effect and required public reporting on spending.
City officials said recent changes reduced available grant dollars. Cannabis business owners successfully lobbied the council to cut the gross receipts tax in half, which lowered the revenue stream that had fed the grant fund. Despite the decrease, councilmembers voted to keep the grant program operating for another year, keeping roughly $400,000 available to award to qualifying nonprofits this cycle.
Council discussion focused on who should qualify and how the program should align with city priorities. Under the current rules, applicants must show at least one funded activity ties to a city strategic goal and demonstrate they mitigate the community impacts of adult-use cannabis — a standard originally aimed at programs serving children and youth.
Councilmember Scott Robbins pushed to expand eligibility. He argued groups such as Al Tahoe Firewise, which focuses on wildfire mitigation, should be allowed to apply and proposed removing the explicit mitigation requirement for grant applicants. Robbins said limiting awards primarily to youth-focused mitigation narrows the pool of potential recipients and omits other local needs.
Councilmember Heather Horgan urged caution. With a background in community health, Horgan said the needs the grant program targets — youth prevention, school-based interventions and drug-access reduction — remain active and measurable. She recommended a short needs assessment by a committee before the next grant year to identify which programs most directly reduce harms linked to local cannabis sales.
The council approved three immediate actions: restart the competitive grant cycle for about $400,000, ask staff to return with proposals for stable long-term funding, and add a councilmember as a standing participant on the grant review committee. The current process uses a review panel to score applications, narrow the field and deliver finalists for council approval.
Grant awards to date show where the funds have gone. Over four years the Tahoe Alliance for Safe Kids (TASK) received $200,000, the largest single recipient, because its programs focus entirely on reducing youth access to drugs and alcohol and run prevention initiatives in local schools. Gateway Mountain Center received $148,750, Tahoe Youth and Family Services received $133,169, and Sober Grad Night programs received $110,000. The Lake Tahoe Boys & Girls Club received support through other city channels separate from this cannabis grant program.
Council members and staff acknowledged the gap between voter expectations from Measure G and current revenues after the tax reduction. To address that, the council asked staff to outline options that could include restoring a higher tax rate, reallocating other city revenues, or changing eligibility and award size to concentrate funds on highest-impact programs.
The one-year extension preserves the existing application rules for the upcoming funding cycle but leaves room for policy shifts. If the council adopts Robbins’ proposal to remove the mitigation requirement, the pool of eligible nonprofits could expand to include fire-prevention groups, broader public-safety projects or other community services that contend with secondary effects of a tourist-driven economy.
Staff will present long-term funding scenarios and recommended eligibility changes at a future meeting. Councilmembers signaled they want a clearer, consistent approach before committing multi-year funding levels. The council also agreed to formalize council oversight by assigning a member annually to the grant committee to ensure elected officials remain directly involved in grant decisions.
Facts and figures – Current fund for grants: approximately $400,000 – Total issued since program start: $1,666,551 over four years – Major past recipients: TASK $200,000; Gateway Mountain Center $148,750; Tahoe Youth and Family Services $133,169; Sober Grad Night $110,000 – Measure G provisions: up to 6% gross receipts tax on retail/distribution/manufacturing; $20/sq ft canopy for cultivation; projected ~$950,000 annually while adopted
Next steps The council expects staff to return with a report that models projected revenues under different tax scenarios, recommended eligibility criteria tied to measurable outcomes, and options for maintaining predictable grant funding. Council members will decide whether to keep the mitigation requirement, broaden eligible applicants, or change award structures for targeted impact.
The one-year renewal gives nonprofits time to prepare applications under the current rules while the city outlines a longer-term policy that could change how cannabis tax dollars are distributed in South Lake Tahoe.
