Cash from cannabis taxes has pulled Del Rey Oaks from the brink.

As the legal cannabis industry grows, Del Rey Oaks – the first city in Monterey County to legalize cannabis businesses – is beginning to cash in big, and for the first time in years, is no longer teetering on bankruptcy.

“I’ve been on the council now 20 years,” Mayor Jerry Edelen says, “and the question was always, ‘how do you keep the wolf from the door?’”

Now, because of cannabis tax revenues, Edelen says the city has a “very, very bright future.”

In the city’s 2018-19 budget, adopted June 26, it is estimated the city will rake in $900,000 in cannabis tax revenues, up from about $600,000 this year, which will help the city pay for long-deferred road repairs, pay off debt, and for the first time ever, allow it to establish a reserve fund.

Because the industry is still in its infancy, City Manager Dino Pick recommended that City Council treat the windfall as “one-time money,” and hold off on creating recurring expenses until it’s more clear the boom won’t go bust.

So far, that boom shows no signs of letting up, and Pick says in the coming weeks City Council will consider amending the city’s cannabis ordinance to remove the current cap that allows only three cannabis manufacturing businesses.

Pick is also taking a deeper look into the possibilities of testing and laboratory facilities so that the city can “capitalize and maximize” on the evolving industry.

“Dispensaries are very sensitive to local competition,” Pick says. “That’s why we deliberately focused on bringing manufacturing to the city.”

At Integral Innovations, one of the three businesses that have obtained a manufacturing permit from Del Rey Oaks, the growth has been explosive. The business, which extracts cannabinoids to be put in things like vape cartridges, set up shop in January, and has almost tripled its sales since then, according to Chief of Staff Harold Hawkins.

“We’re doing what we can to keep growing,” Hawkins says, adding that the small company is already in the top 15 in market share in California for vape companies. “We’re still pretty early in the development cycle,” he adds.

Integral COO Marc Zurlinden says the company is constantly reinvesting its profits, and that ultimately it should be able to produce two to three times as much product. If that does happen, Del Rey Oaks has even bigger windfalls ahead: Hawkins says that in the month of May, the company had over $550,000 in revenue. With the city’s cannabis tax, which voters approved in November 2016, 5 percent of that revenue goes into city coffers.