Sacramento

Sacramento Pot Tax Furor Puts Youth Grants On The Hot Seat

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Published on March 14, 2026
Sacramento Pot Tax Furor Puts Youth Grants On The Hot SeatSource: Google Street View

A low-profile state youth-prevention campaign has suddenly landed in the middle of a Sacramento political brawl. State officials and nonprofit leaders are defending a multi-year initiative after outside investigators accused it of steering roughly $370 million in Proposition 64 cannabis-tax revenue into civic-engagement efforts and, critics argue, political organizing. At the center of the fight is Elevate Youth California, a state-funded grant program that has funneled hundreds of subgrants to community groups across the state.

How the program is structured and how much it has spent

According to the program-impact information on Elevate Youth California, the initiative is funded through Proposition 64 and awards money across three main tracks: standard, capacity building and innovation. The per-cohort totals listed there add up to roughly $370 million. Program materials say the Center at Sierra Health Foundation is the state’s contracted intermediary, responsible for managing grants and providing technical assistance to local partners.

State response: prevention, not politics

California officials frame all of this as straightforward public-health work, not covert electioneering. They say the awards are meant to prevent youth substance use by building leadership skills, strengthening peer support networks and expanding trauma-informed services in communities hit hardest by drug harms.

The Department of Health Care Services announced nearly $47 million in new Elevate Youth grants in December and described the money as backing mentoring, peer support and civic engagement as prevention strategies. In the same release, DHCS noted that since Elevate Youth California launched in 2019, the agency has awarded more than $370 million through 517 grants.

What critics say

Conservative investigators and the Steve Hilton campaign’s CAL DOGE initiative see something very different in the fine print. They argue that grant language using terms such as “civic engagement” and “power building” shows the program can be used for voter outreach and organizing activities that, in their view, stray into politics.

Those allegations are laid out in CAL DOGE materials and echoed in related coverage, including a roundup at Dallas Express. That coverage summarizes claims that the Proposition 64 funding stream has been routed to hundreds of subgrantees whose activities, critics say, drift away from traditional substance-use prevention work.

What is actually written in the grants

On its own site, Elevate Youth California does not hide the civic-engagement angle. Program materials explicitly list civic engagement among the initiative’s prioritized strategies, including “focusing on policy, systems and environmental change through youth civic engagement, mentorship, and peer-led support.”

The same materials say those strategies are intended to reduce substance use by addressing social drivers, strengthening community supports and helping young people lead change in neighborhoods that have borne the brunt of the war on drugs. In other words, the official line is that giving teens a bigger voice in local policy is part of prevention, not a side hustle.

Who received money

The money did not stay in Sacramento. Grant recipients include local health centers, youth organizations and statewide nonprofits that describe their projects as prevention, leadership development or capacity building.

The Sacramento Native American Health Center, for example, reports receiving a $1 million Elevate Youth award to develop youth leadership and engagement programming. The United Way of Santa Cruz County lists an $834,075 Elevate Youth grant to expand youth substance-use prevention work. Other recipients, such as Alcohol Justice, similarly describe their awards as supporting community-based prevention and organizing around health-focused goals.

Oversight and the questions ahead

Critics say the entire setup is asking for trouble. They argue that the pass-through model, where the state contracts with a nonprofit intermediary that then subgrants to hundreds of local groups, reduces direct state procurement oversight and makes consolidated auditing harder to pull off. That structural concern is a central theme in CAL DOGE’s materials.

State officials counter that the intermediary model was chosen to reach grassroots partners that might otherwise be shut out of complex state contracting and to provide hands-on technical assistance. They point to program reporting, cohort outcomes and DHCS statements that consistently describe the work as prevention and leadership development for young people.

Bottom line

Public records and program documents show a large, multi-cohort spending effort tied to Proposition 64. The fight is now less about the total dollars than about definitions and oversight: when does “civic engagement” for teens count as public health, and when does it start to look like politics funded by pot taxes.

For those trying to keep score, the state’s Elevate Youth pages and DHCS releases outline grantees, cohort funding and stated goals. Lawmakers and watchdogs on both sides are signaling that if the questions keep coming, they will push for more transparency and more rigorous auditing of how cannabis-tax dollars are flowing into youth programs.