By City Finds No Audits and Missing Equity Payments
Officials in Antioch, California, say some marijuana businesses have reported making no social-equity contributions to their designated nonprofit partners. The findings were detailed 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. The City Attorney’s Office said it does not have a complete operator-by-operator picture of compliance with social-equity contribution requirements.
The office also said that, to its knowledge, “a true audit of gross receipts records has not been conducted.” 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.
Operators Show Mixed Compliance
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.
Individual payment amounts and gross receipts figures were not released because the city considers them confidential. 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.
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 Next Step
City staff concluded that an audit of gross receipts is the practical next step for determining precise compliance. The city’s marijuana revenues are separate from the contributions operators make directly to nonprofit social-equity partners.
The Cannabis Standing Committee received the reports as part of its review of the city’s cannabis program. No individual operators were named in the public findings.
The City Attorney’s Office evaluation focused on the terms of the operating agreements and how compliance has been tracked. City staff did not say when an audit might begin.
Officials did not release a breakdown of which operators reported zero contributions. The city has not said whether any operators are currently in default under their agreements.
