A Mendocino County judge denied a motion by a group of cannabis activists challenging the legality of Measure AI, the cannabis business tax, in a hearing on Friday.
The motion asked the court to prevent the county from enforcing the measure until after their lawsuit against the county is settled. Their argument largely rests on an interpretation of Proposition 218, which first provided a distinction between special and general taxes.
Measure AI placed a tax on the gross receipts of marijuana growers starting at 2.5 percent and imposed a flat rate of $2,500 a year for all other cannabis businesses, to be increased after July 1, 2020.
The group, represented by attorney Larry Rosen, argues it is a special tax because it is placed on a specific industry, commercial cannabis. They also say priority has been given to certain services it will be spent on, as its companion Measure AJ advised the county to spend the majority of the revenue on four public services (including marijuana enforcement and road repair) used disproportionately for dealing with problems caused by cannabis operations.
Based on that, the group alleges the measure’s approval by 64 percent of voters was not enough to pass the measure, since special taxes require a supermajority vote (66 and two-thirds) to go through.
Prop. 218 defines a special tax as one that allocates its revenues for a specific purpose. Judge Jeanine Nadel said there was no specific spending requirement laid out in the measure, which is why she denied the motion. An analysis included in the ballot initiative says it “requires…
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