A Historic Shift in Ceres Cannabis Policy

On March 30, 2026, the Ceres City Council made a historic move by adopting a new cannabis tax structure that reflects the realities of today’s market, Ceres is serious about accountability, and serious about creating a fair path forward for legitimate operators. The council approved cannabis business tax rates of 4% of monthly gross receipts for storefront dispensaries, 3% for manufacturing, 2% for distribution, 1% for laboratories, and a $4 per square foot fee for cultivation businesses.

The action replaced the city’s former fee structures set through developer agreements. The cannabis industry has been under pressure for years. Legal operators have had to compete against an illegal market that does not play by the rules, does not pay taxes, and too often sells products with little or no accountability. That is exactly why I have long said the legal market can help deter the black market, but only if the legal side is not being crushed while illegal activity continues pound for pound. In Ceres, we have made our position clear. Illegal sales in smoke shops, unlawful marijuana sales, and access by minors are not something we will tolerate.

Enforcement in our city is active, frequent, and often without notice.

At the same time, enforcement alone is not enough. If a city wants a legal industry to survive, it must create a structure that gives legitimate businesses a real chance to operate. That is what this council recognized after months of back-and-forth discussion and deliberation. This was not a rushed decision. It was a measured response to an industry that has struggled, both locally and statewide, and to a business environment that has changed dramatically over the last decade.

The new Ceres tax structure is also competitive. For example, the City of Modesto and County lists cannabis business tax rates of about 8% for retail, 4% for manufacturing, 2.5% for distribution, 1.5% for testing labs, 1% for nursery cultivation, and 2.5% for indoor cultivation. That means Ceres is lower than Modesto in several key categories, especially retail and manufacturing. important, Ceres has capped storefront dispensaries at two. At this point, our city has not grown to the level where more are needed. That cap creates structure and balance while still allowing a legal marketplace to exist. This is not about opening the floodgates. It is about maintaining local control, protecting neighborhoods, and making sure any cannabis activity in Ceres remains tightly regulated and fairly limited.

For those interested in operating under the new tax system, the path is clear. New operators will need to contact the City of Ceres and go through the appropriate city process. Existing operators can also reach out and take advantage of the new framework. The message is simple: the City of Ceres is open for business, but only for those willing to follow the rules.

There is also a broader public benefit here. Revenue generated from cannabis business taxes goes back into the city’s general fund, creating more opportunity to support public services and continue investing in the community. That matters. But let’s also be honest: this industry was once projected to boom, and in many places it has not lived up to that promise. Cities that want to preserve a regulated market must be willing to adapt. Ceres has already rolled back operator percentages before, and even that did not fully solve the issue. This latest move was necessary.

What comes next will depend on results. Over time, the city should evaluate how this new system performs and whether adjustments are needed. A fiscal-year public report could be one good way to give residents and stakeholders a transparent look at what the tax generated, how the industry responded, and whether the policy achieved its intended goals. That kind of accountability matters.

In the end, the council did what it believed was right. We have a duty to protect public funds, support responsible business, and make sure accountability runs both ways. This decision was about more than taxes. It was about fairness, enforcement, public safety, and keeping Ceres in control of its future