New cannabis law lowers tax rates, allows consumption lounges and events

Posted on December 12, 2022

City of Santa Ana Logo, surrounded by the words "Downtown Orange County"

Santa Ana is the top destination for legal cannabis in Orange County.

SANTA ANA, Calif. – Santa Ana will continue to be the top destination for legal cannabis in Orange County thanks to several new measures approved by the Santa Ana City Council that will lower tax rates and allow marijuana consumption lounges and events.

The City Council unanimously approved an ordinance in October to amend the municipal code as well as tax rates related to cannabis retail, cultivation, manufacturing and distribution. The new ordinance will go into effect on Jan. 1, 2023

“The City of Santa Ana was the first in Orange County to permit recreational marijuana sales, and we continue to lead the way in allowing the safe cultivation, sale and consumption of legal cannabis,” City Manager Kristine Ridge said. “These changes to our cannabis laws will help our Santa Ana operators remain competitive in an industry that creates local jobs while also producing new tax revenues that help pay for City services.”

The Cannabis Public Benefit Fund, adopted by the Santa Ana City Council in 2018, has generated over $50 million in revenue over the first four years for various City enforcement and youth services, including the Santa Ana Public Library’s Knowledge Mobile and Play and Learn Children’s Patio, as well as 10 new fitness courts in our parks and planned splash pads at various parks.

Under the amended cannabis rules:

  • The tax rate for cannabis distribution, cultivation and manufacture is lowered from 6% to 1%.
  • Cannabis retail taxes are reduced by 1% – medicinal from 6% to 5% and recreational from 8% to 7%.
  • Cannabis retailers that meet the requirements of social equity measures can further reduce their tax rates by an additional 2%.
  • All retailers may sell medicinal and recreational cannabis.
  • Permitted retail locations can open consumption lounges where cannabis products may be sold and consumed.
  • Permitted retailers can have temporary consumption events where cannabis may be sold and consumed twice a year at the retail site.
  • The City of Santa Ana can hold temporary consumption festivals where people can sell and consume cannabis.

The City Council added optional social equity measures for cannabis retailers that include certain wage and workforce guidelines, local and low-income community hiring requirements, and training programs.

Retailers that comply with the social equity measures will get first priority to apply to open consumption lounges in the first year of the ordinance. Other legal retailers that haven’t implemented social equity measures will be able to apply to open consumption lounges after Jan. 1, 2024.

Visit our Cannabis Business Portal for more information at

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