On Aug. 28, 2017, the California Supreme Court issued a 5-2 split decision in California Cannabis Coalition v. City of Upland, S234148. The court held that a revenue measure proposed by citizen initiative is not “imposed by local government,” and does not trigger the procedural limitations of Article XIII C of the California Constitution, which establishes substantive and procedural limitations on the imposition of local taxes. Immediate responses from many commentators reflect an expansive view of this decision, including a perception that the case could pave the way for communities to establish special taxes with majority voter approval, rather than the 2/3 required by Article XIII C, section 2. An alternate reading of the case, however, suggests a narrower impact from the decision.

In September 2014, the California Cannabis Coalition (CCC) introduced a local ballot initiative to repeal the City of Upland’s ban on cannabis dispensaries. The initiative also aimed to establish related regulations on cannabis dispensaries and a licensing fee to cover regulatory expenses. In conformance with Elections Code section 9214, CCC qualified its initiative for a special election. The City, however, determined from a cost of service study that the fee was governed by Article XIII C, section 2, which requires that a general tax “impose[d], extend[ed], or increase[d]” by a “ local government” must be approved by a majority vote at a general election.

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