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Court Ends Marijuana Tax Dispute: Local Voters Can Tax Themselves

By William Vogeler, Esq. on August 31, 2017 | Last updated on March 21, 2019

Ulysses, fearing he would heed the tempting Siren's song, ordered his men to lash him to the mast of his boat.

Upland, fearing a prohibited tax aimed at marijuana businesses, kept it off the special election ballot. That's a slight twist on the California Supreme Court's mythical reference in California Cannabis Coalition v. City of Upland.

"As Ulysses once tied himself to the mast so he could resist the Sirens' tempting song (Homer, The Odyssey, Book XII), voters too can conceivably make the clear and important choice to bind themselves by making it more difficult to enact initiatives in the future," the court said.

It was a tax powers case and more complicated than a Greek myth. But the story ends something like this: voters have the power to tax themselves.

Marijuana Odyssey

The California Cannabis Coalition drafted an initiative to repeal a city ordinance banning medical marijuana dispensaries and instead adopt regulations permitting and establishing standards for operating dispensaries and requiring that each dispensary pay an "annual Licensing and Inspection fee" of $75,000.

The city, saying the "fee" was actually a tax, concluded that it should be submitted at the next general election under Article XIII, Section 2. That provision limits local governments ability to impose taxes by initiative.

The coalition organizers sued, and an appeals court agreed with them. But voters defeated the measure at the general election, rendering the issue moot.

The Supreme Court, however, exercised its jurisdiction to address the issue. Court watchers said the impact would be far-reaching.

Voter Initiatives

The court distinguished between the Article XIII limitations on "government" and "voter" initiatives. The court said "section 2, subdivision (b) does not limit voters' powers to propose and adopt initiatives concerning taxation."

"Only by approving a measure that is unambiguous in its purpose to restrict the electorate's own initiative power can the voters limit such power, tying themselves to the proverbial mast as Ulysses did," Justice Mariano-Florentino Cuéllar wrote in the 5-2 decision. "Unless a provision explicitly constrains the initiative power or otherwise provides a similarly clear indication that its purpose includes constraining the voters' initiative power, we will not construe provisions as imposing such limitations."

Justice Leondra R. Kruger dissented, echoing some concerns by taxpayer watchdog groups. Other commenters, however, praised the decision.

"It's hard to overstate how important this ruling is," state Sen. Scott Wiener told the San Diego Union Tribune. "Communities will now have a much easier time funding schools, transportation and other critical needs."

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