Antioch Acknowledges It Has Never Audited Cannabis Operators Gross Receipts

City Reveals It Has Never Audited Cannabis Gross Receipts

Officials in Antioch, California, have acknowledged that the city has never conducted a true audit of marijuana operators’ gross receipts. The acknowledgment came in reports presented Tuesday to Antioch’s Cannabis Standing Committee. The reports included an evaluation from the City Attorney’s Office examining operating agreements and compliance.

Under Antioch’s system, marijuana businesses make payments to the city based on self-reported gross receipts or cultivation activity. Retail operators submit reports and payments monthly, while cultivation businesses report quarterly.

Operating agreements give the city authority to inspect financial records and conduct annual audits at an operator’s expense. City staff said those powers have not been used.

“The City has not exercised those provisions to date,” the report states. The City Attorney’s Office separately said it does not have a complete operator-by-operator picture of compliance with social-equity contribution requirements.

To the City Attorney’s Office’s knowledge, “a true audit of gross receipts records has not been conducted.” Individual payment amounts and gross receipts figures were not released because the city considers them confidential.

Some Operators Report No Social Equity Contributions

Among the operators that have been reviewed, officials said some are fully complying with their social-equity obligations. Others have made partial contributions, and some have reported making no contributions to their designated nonprofit partners.

Antioch’s operating agreements require marijuana operators to maintain social-equity programs throughout the life of their agreements. Those programs include written equity plans outlining goals, responsibilities, timelines and measurable outcomes.

Operators are also required to provide annual reports to the city manager. The agreements include enforcement mechanisms if an operator is found in default, including a 45-day notice and cure period.

If a violation is not resolved, the city manager can order the suspension of operations under the agreement and recover costs. The city’s revenues are separate from the contributions operators make directly to nonprofit social-equity partners.

Since fiscal year 2019-20, Antioch has received $11,702,329 in marijuana-related revenue, including approximately $1.97 million during fiscal year 2025-26.

Audit Identified As The Next Step

City staff concluded that an audit of gross receipts is the practical next step for determining precise compliance. The finding follows the City Attorney’s Office review of the operating agreements.

The review examined whether operators are meeting their obligations under those agreements. It also assessed the city’s own oversight practices.

The reports were presented to the Cannabis Standing Committee, which received the findings on Tuesday. The committee is the body that oversees the city’s cannabis program.

City staff said the audit powers in the agreements remain available to the city. Those powers allow inspections of financial records and annual audits at an operator’s expense.

No timeline for conducting an audit was included in the reports presented to the committee.

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