Public Water Now told Central Coast News it has "essentially conceded" in the Measure O campaign.
But, it's not a complete loss, the group added.
"We felt we woke up the community some of CalAm's poor performances in the past," said George Riley, Measure O's co-sponsor.
Measure O claimed California American Water's rates were too high.
"They overcharge us for their failures," Riley said.
Riley also criticized CalAm for its inability to implement its desalination project.
"It's up to CalAm to continue to prove that is can deliver," he said.
No on O media representative Carlos Ramos says now CalAm can move forward without any distractions.
"I really believe that now it's time for us to regain that trust, to focus on reliability, to focus on safety, to focus on service," Ramos said.
No on O spent more than $2 million and, much like an experienced defense attorney, raised reasonable doubt that Measure O had the resources and clear plan to take over the water supply.
Yes on O maintains it wanted to win to get the chance to answer those questions, but faced a steep financial disadvantage during the campaign.
"Money wins," Riley said. "This is a disgrace to the election process, I think, more than it is to our side of the argument."
CalAm said it will be asking the state for an extension on the cease and desist order. The CDO will cut CalAm off from taking water from the Carmel River.
CalAm said the hope would be to show the state the progress on the desalination project and push the deadline to 2018.