Facing a decline in marijuana tax receipts, the Trinidad City Council on Nov. 6 revised the city’s allocation policy for revenue from local marijuana sales, consolidating most funds into general operations. The move ends a previously structured distribution that earmarked revenue for projects, business incentives, nonprofits and reserves, officials said, instead directing the bulk of the money to sustain core municipal services.

Under the former policy, 65 percent of local marijuana tax revenue was set aside for projects, 4 percent went to business incentives, 1 percent supported nonprofits, and 30 percent was placed in reserves. The council’s adjustment maintains a $20,000 annual allocation beginning in 2025 for economic development and affordable housing, but it redirects the remainder into the general fund to address immediate budgetary pressures, officials said.

City leaders framed the change as a pragmatic response to lower-than-anticipated cannabis tax collections, a funding source that many municipalities have found to be volatile. By channeling the bulk of these revenues into general operations, Trinidad aims to preserve the delivery of everyday services that residents rely on, avoid deeper cuts to municipal programs and stabilize near-term finances.

For local organizations and projects that had come to expect predictable marijuana-tax support, the reallocation will mean tighter competition for other funding or delays in planned initiatives. Small business incentives and nonprofit grants previously covered under the dedicated percentages are now pooled into the general fund, reducing the earmarked funding stream those groups could draw on. The preservation of a modest, targeted $20,000 annually for economic development and affordable housing signals a council effort to retain some investment in long-term community needs, but the amount will be limited relative to the prior project-based allocation.

The council’s revision also affects the city’s reserves. With 30 percent of prior revenues previously directed to reserves now consolidated into general operations, opportunities to build a financial cushion specifically from marijuana tax proceeds are reduced. Officials said the change reflects a prioritization of near-term operational stability over reserve accumulation in light of reduced receipts.

Implementation is timed to take effect with fiscal adjustments into 2025, when the dedicated $20,000 allotment will begin. Residents and stakeholders can expect city budget discussions in the coming months to reflect the new allocation framework as council and staff work to balance services, investments and fiscal resilience amid uncertain revenue flows.

For Trinidad, a small municipal pocket in Las Animas County, the decision highlights the challenges of relying on a single, fluctuating revenue source and underscores the broader need to align fiscal policy with local economic realities while preserving core services that underpin daily life.