SAN FRANCISCO — Steve Hilton, a Republican candidate for California governor, has accused state officials of diverting $370 million in cannabis tax revenue intended for substance abuse programs to organizations that bolster Democratic voter outreach efforts. The allegation, made through Hilton's newly formed unofficial advisory group known as CAL DOGE, targets funds from the California Cannabis Tax Fund, which collects revenue from marijuana sales legalized under Proposition 64 in 2016.
According to CAL DOGE, the money was distributed by Elevate Youth California, a nonprofit tasked with allocating the funds to support youth substance abuse prevention and education initiatives. Instead, the group claims, the grants went to a network of 517 organizations, with each receiving an average of about $700,000. Hilton, a former Fox News commentator and British political strategist, launched CAL DOGE last month as part of his campaign to highlight what he describes as widespread government waste in the state.
The investigation by CAL DOGE, which includes investigators, tech advisors, and citizen journalists, points to specific recipients as evidence of misuse. For instance, the Jakara Movement, a Fresno-based nonprofit focused on Punjabi and Sikh communities, received $350,000. According to the report, those funds were used for "Sikh youth empowerment and voter registration" programs, activities that CAL DOGE argues stray from the original intent of combating substance abuse.
Similarly, Young Invincibles, a Los Angeles organization advocating for young adults on issues like health care and education, secured a $1 million grant. CAL DOGE alleges this money supported broad "civic engagement" efforts, including voter mobilization drives that primarily benefit Democrats. The group describes these nonprofits as part of a "tangled web" designed to build the Democratic voter base in key demographics.
Another example cited is Asian Refugees United, a San Francisco-based social justice organization affiliated with the Asian Americans for Civil Rights and Equality network. It received $800,000 for projects described as "LGBTQ+ Asian Storytelling," which CAL DOGE claims has little connection to substance abuse prevention. The report suggests these grants represent a pattern of funds being funneled to progressive causes under the guise of public health programming.
Hilton, running alongside state controller candidate Herb Morgan, framed the discovery as part of a larger audit of state spending. In a statement, he boasted, "In seven days of work, CAL DOGE has already uncovered more fraud than Gavin Newsom and his regime have done in their seven years in power. And we’re not even elected yet!" He added, "This is exactly why I set up CAL DOGE in the first place, to expose fraud and corruption in the system so we can act to stop it on day one."
The broader implications, according to Hilton and Morgan, extend far beyond the $370 million. They estimate uncovering $250 billion in "fraud, waste, and abuse" across major state programs, including education, health care, and infrastructure. CAL DOGE's director, Jenny Rae Le Roux, who briefly ran in the 2021 recall election against Governor Gavin Newsom, oversees the team's operations from Sacramento.
Proposition 64, approved by California voters a decade ago, legalized recreational marijuana and directed tax revenues toward public safety, youth programs, and environmental protections. The Cannabis Tax Fund has generated billions since then, with Elevate Youth California receiving a portion specifically for substance use disorder prevention among young people. State records show the organization has distributed over $500 million in grants since 2018, but details on individual allocations are not always publicly itemized in real time.
Elevate Youth California, based in Oakland, describes its mission on its website as empowering communities to address youth substance misuse through education and support services. The organization has not responded to requests for comment on the CAL DOGE allegations. Similarly, representatives from Young Invincibles, the Jakara Movement, and Asian Refugees United did not immediately reply to inquiries from The Appleton Times.
California's political landscape adds context to the claims. Hilton, a longtime critic of Democratic dominance in the state, is positioning himself as an outsider reformer in the 2026 gubernatorial race. The November election will determine the successor to Newsom, who is term-limited after serving since 2019. Democrats have held the governorship for 16 years, a streak Hilton vows to end with his campaign's focus on fiscal accountability.
Experts in state budgeting caution that while grant oversight can be lax, outright fraud requires verification through audits. Michael Genest, a former California budget director under Republican and Democratic governors, noted in a recent interview that cannabis tax funds have faced scrutiny before, particularly over allocation transparency. "These programs often partner with community groups for outreach, and voter education can overlap with public health goals," Genest said, without directly addressing the specific claims.
CAL DOGE's emergence mirrors national trends of political figures using independent "task forces" to spotlight government inefficiencies ahead of elections. Hilton, who advised former British Prime Minister David Cameron before moving to the U.S., has leveraged his media background to amplify the group's findings on social media and through press releases. The initiative has garnered attention from conservative outlets, though mainstream fact-checkers have yet to independently confirm the $370 million figure's diversion.
As the allegations unfold, they could influence voter perceptions in a state where cannabis revenue has become a significant budget line item, projected to exceed $1 billion annually. If substantiated, the misuse could prompt legislative reviews or calls for tighter controls on grant distributions. Hilton indicated more revelations are forthcoming, stating, "There is much more to come from CAL DOGE and its work will play a huge part in ending 16 years of Democrat one party rule this November."
Meanwhile, Democratic leaders in Sacramento have dismissed similar accusations from Hilton as partisan attacks. A spokesperson for Governor Newsom's office referred questions to the state auditor's office, which is conducting ongoing reviews of various funds but has not commented on this specific matter. The controversy highlights ongoing debates over how California allocates its progressive tax revenues amid rising costs in housing, homelessness, and public health.
With the gubernatorial primary still over a year away, Hilton's CAL DOGE efforts are likely to remain a central campaign theme. Voters in battleground areas like Los Angeles and the Central Valley, where many of the cited nonprofits operate, may scrutinize the claims as the race heats up. For now, the allegations stand as unverified assertions from a candidate's advisory group, awaiting deeper investigation by independent authorities.