Desert Hot Springs is Awash in Marijuana Revenue

It's a great time to be mayor of Desert Hot Springs. Eight years ago, the city declared a fiscal emergency and filed for Chapter 9 protections for a second time. Today it’s swimming in revenue — cannabis revenue — that has helped fund a new City Hall and library, repaved roads, additional police officers, and attracted thousands of new residents to the city.

Desert Hot Springs was early to the party on cannabis. Even before adult use pot was legalized, the city embraced large-scale medical cannabis cultivation. It was the first city in Southern California to do so. Now, it continues to adjust policy to keep itself competitive. Several months ago, the City Council approved cannabis "entertainment facilities” and allowed hotels to sell cannabis inside their properties. In February, the City Council voted to lower the cultivation tax.

The city’s embrace of marijuana came in handy last year, as the pandemic upended Coachella Valley tourism. The cannabis industry contributed more than $4 million to city revenue, trumping real estate as the largest revenue generator, according to Mayor Scott Matas. This year, officials are expecting even more dough.

“It's been incredible to see the transformation,” Deputy City Manager Doria Wilms told NBC News. “We don't see it slowing down."