Desert Hot Springs Moves to Cut Cannabis Retail Tax in Half

Desert Hot Springs may soon follow the lead of other Coachella Valley cities in reducing its cannabis retail tax in an effort to support struggling local businesses.

On Tuesday, the Desert Hot Springs City Council voted unanimously to direct staff to draft an ordinance that would lower the city’s cannabis retail tax from 10% to 5%. The move comes as many cannabis operators face increasing financial pressure from a saturated market, competition from illegal sales, high taxes, and costly security requirements.

“The goal is to help level the playing field for our local, licensed cannabis businesses,” city officials noted.

The proposed tax reduction mirrors recent decisions made in Cathedral City, Palm Desert, and Palm Springs, where cannabis retail taxes have already been cut to help legal dispensaries stay competitive and afloat.

The new ordinance, once drafted and approved, could provide some much-needed relief for Desert Hot Springs’ cannabis industry—one of the first in the state to embrace retail cannabis after legalization.

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