April 28, 2021

Nonprofits Gain Funding From Unusual Source: Marijuana Sales

April 28, 2021
Image of a cannabis plant—non profits have been benefitting from legal weed taxes.

A positive trend in the national marijuana movement is spending revenues generated on building up communities who have been adversely affected by the war on drugs. Subsequently, non-profit organizations have newly begun benefitting from state marijuana sales.

In the last few years, the state of California had designated funding received from pot sales to provide grants to community organizations. Nearly $100 million dollars has already been disbursed, and the amount is expected to increase to $175 million this May.

An example of an organization who is making a difference in the lives of people who have been through the criminal-justice system is ‘Fathers and Families of San Joaquin’. This small group received a $1 million grant in 2019 to train formerly incarcerated citizens to serve as substance-abuse counselors, conduct workshops for youth, and work as emergency response teams for domestic and child abuse.

According to an article by the Associated Press (AP), “So many of the problems the organization tackles in and around Stockton, California, can be traced to the war on drugs, says Samuel Nuñez, the group’s executive director. He remembers police officers knocking down his front door when he was a child — something he says was common in his neighborhood — and his mother sitting terrified on the floor.

‘They were fiercely policing our communities,’ Nuñez says. ‘They were traumatizing us.’”

California isn’t the only state working this angle. Alaska and Illinois are also utilizing marijuana revenues to support marginalized communities, and New York state has passed a bill that delineates 40% of tax revenues will aid communities suffering from the drug war. As weed is legalized across the nation, other states may adopt this platform. Most recently, voters approved policies to usher in recreational marijuana use in Arizona, Montana, New Jersey, and South Dakota.

The AP posted, “The system that California set up has been particularly beneficial to smaller groups that are closest to these communities, says Bonnie Midura, a senior program manager at the California Endowment, a foundation that supported efforts to push for the marijuana grants. State agencies often have rigorous application requirements for nonprofits that can shut them out of the process.”

The opportunity for high dollar grants will have a high impact on the state.

The Chronicle of Philanthropy interviewed an official at the Sierra Health Foundation, stating, ‘“I’ve had a number of conversations with these organizations where they’ve told us that these are the largest grants that they’ve ever received,” says Matt Cervantes, which manages part of the California effort. “These are well-known advocacy organizations from across the state that have deep history in the philanthropic sector. But a $1 million grant over three years, that can be a total game-changer.”’

Another example of an entity who has received funding through the California state program, is Painted Brain. As a newer non-profit in the LA area, they were awarded $900,000 in a three year grant period. Its mission is to create lasting community-based solutions to mental health challenges and the impact of social injustice through arts, advocacy, and enterprise. They offer art programs, job services, and even legal counsel for those with mental health issues. The funding has helped the organization to not only increase services, but to begin looking toward its future.

“It provides a predictability and security for our organization that allows us to actually think bigger and think about what we really want to be doing,” says Dave Leon, the organization’s executive director, in an interview with the Chronicle of Philanthropy.

California’s program is aimed at funding small organizations run by people of color, with a focus on citizens who were formerly incarcerated, communities ravaged by the drug war, and programs that strive for drug use prevention. Out of the clients served by programs who won grants, about 45% are Latino, and 35% are Black.

However, although the benefits seem obvious, there are some non profits and grant makers who do not support the idea of using funds generated by drug consumption. Especially if part of their mission is to try to decrease the number of drug offenders.

In Alaska, the state government allocates 12.5% of its marijuana sales revenue to fund after-school prevention programs. Thomas Azzarella, director of the Alaska Afterschool Network, oversees distribution of the money, which totalled $1.25 million to seven organizations in 2019. He has mixed feelings about the process. 

“We are not for or against the industry. We recognize if legalization occurs, we need to be focused on prevention,” Azzarella says in an interview with the Chronicle of Philanthropy. “With the new industry comes additional risks and hazards. And this is our way to ensure that the industry is a good partner.”

Organizations in California feel much the same way. It’s important that stakeholders understand that they are not relying on drug abuse to then reinvest in preventing something which continues to provide funding for programs.

Midura, from California Endowment, explained that it is a matter of perspective. She told the AP in an interview, “There are these dollars coming in. They belong to the people of California,” she says. “How can they be invested in the most disproportionately impacted communities in California?”

Additional Resources:

At The Weed Blog, we strive to produce the latest online news resources regarding marijuana. We also review various strains of cannabis or other edible counterparts. We are committed to helping you find valuable information about marijuana on our website. With marijuana laws constantly changing, learn from us what you can do to promote activism in your area. Otherwise, consider these other top-tier articles regarding cannabis tax revenue:

States Ranked by Recreational Marijuana Tax Revenue

Crime Is Down and Tax Revenue Is up in Denver after Cannabis Legalization

Marijuana Tax Revenue Surpasses Alcohol Tax Revenue in Colorado


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