Updated: Dispensary owner seeks voter approval of medical marijuana

Purple Cross on Highway 25

The owner of a medical marijuana dispensary that has been operating on Highway 25 in San Benito County has plans to circulate countywide initiatives in regards to the legalization and taxation of medical marijuana, to potentially appear on a statewide ballot in June 2014.
Scott McPhail, the owner of Purple Cross RX, filed the notices of intention to circulate countywide initiative petitions on June 18. One potential ballot measure would change the county code to “allow, regulate and specify zoning of medical marijuana dispensaries, prohibit a County ban or moratorium on medical marijuana dispensaries, and would void and preempt the existing San Benito County moratorium on new dispensaries.” The second potential ballot measure relates to taxation of medical marijuana sales – it would authorize a tax on gross receipts of three percent for the first three years and seven percent thereafter on medical marijuana sales.
McPhail had his attorney answer questions about his move to initiate the ballot measure. Jim Roberts, of Roberts & Elliott LLP responded to questions via email.
Roberts said the county should implement the medical marijuana laws of the state in a manner consistent with all applicable laws. According to Roberts the sale of medical marijuana is a proper source of general revenue for the county.
“Statewide polling suggests that the public overwhelmingly supports this type of measure,” Roberts wrote, via email. “I have heard very positive feedback for the measures.”
He said the graduated taxation proposed in the ordinance is meant to “slowly strangle the continued resilient black market, which continues to compete with the now lawful market.”
He said at the full seven percent the county could potentially draw in $300,000 to $500,000 if illegal sales continue. It could be as much as $1 million to $2 million, Roberts said.
To qualify a ballot measure, McPhail will need to gather 1,642 signatures for each initiative by Dec. 30. If McPhail is successful at collecting the necessary signatures the county supervisors will have the option to approve the ordinance on the medical marijuana dispensary or call for an election to place the ballots on the June 3, 2014 statewide primary election.
Joe Paul Gonzalez, the county clerk, auditor and recorder, is expected to bring the items before the board of supervisors for discussion at Tuesday’s regular board meeting. The supervisors will be asked to direct staff to complete an analysis of the impacts of the initiatives concerning the legalization and taxation of medical marijuana.
The County Counsel’s office included a summary of the proposed measure in the agenda. The measure would call for medical marijuana dispensaries to be allowed in commercial thoroughfare, neighborhood commercial and agricultural zones as well as in light industrial with a conditional use permit. The measure would prohibit a ban on medical marijuana dispensaries though it would allow the supervisors to limit the number of dispensaries in the county – but not to less than three. It also prohibits the county from accepting federal funds to investigate, cite, arrest, prosecute or seize property for medical marijuana offenses, or participate in a task force that accepts federal funding or revenue sharing for such activities.
County officials have been in a legal battle with McPhail since he opened the location on Bolsa Road in late 2010 after initially setting up shop in downtown Hollister. At an administrative hearing in 2011, county supervisors voted 4-1 that the dispensary was in violation of county zoning ordinances.
In May, Judge Harry Tobias filed a final statement of decision against Purple Cross just as California’s Supreme Court ruled that municipalities are allowed to ban marijuana dispensaries for zoning reasons. Tobias cited the higher court’s ruling. An attorney representing the county argued the dispensing of marijuana violates the local zoning designation for the area on Bolsa Road, which is zoned for agricultural use. McPhail argued that his dispensary is a seasonal agricultural operation because it grows and sells marijuana on site.
Cole, the attorney, said in May if Purple Cross continued to operate after the ruling “we’ll move forward with enforcement.”
Roberts said the dispensary has no plans of breaking any laws and that the decision is being appealed.
In a letter included in the agenda, Gonzalez said the supervisors can seek analysis from county departments on the measures effect including:
• Fiscal impact
• Effect on internal consistency of the County’s general and specific plans
• Effect on the use of land and housing impact
• Impact on infrastructure funding of all types
• Impact on the community’s ability to attract and retain business and employment
• Impact on the uses of vacant parcels of land
• Impact on agricultural lands, open space, traffic congestion, existing business districts and developed areas designated for revitalization
• Any other matters the board of supervisors request to be in the report

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