The city's finance department released figures showing that medical marijuana collectives paid $290,000 in March, the first month of San Jose's new 7-percent tax on dispensaries.
City Councilman Peirluigi Olivero told the San Jose Mercury News the new revenue is important at a time when hundreds of layoffs are expected to help the city deal with its deficit.
Still, officials are not sure how long the windfall will last. The Council last month decided to limit the more than 100 pot clubs in San Jose to 10.
Officials in July will finalize details on the new limits.
The Associated Press contributed to this report.