Supervisors have legal concerns over marijuana initiatives

Purple Cross is on Bolsa Road.

San Benito County supervisors expressed their initial concerns about two petitions put forth by a private citizen that could potentially put ballot initiatives on the primary election next June to allow the sale of medical marijuana in the county and create tax revenue from such sales.
Scott McPhail, the owner of Purple Cross Rx, a medical marijuana dispensary, filed the petitions on June 18.
Joe Paul Gonzalez, the county clerk, auditor and recorder, and Angela Curro, the assistant clerk, auditor and recorder, spoke about the process of putting a countywide initiative on the ballot at Tuesday’s county board meeting. County Counsel Matthew Granger talked briefly about some of the legal options the county has as well as potential legal ramifications of the proposed ballot initiatives. He said legal issues related to Purple Cross Rx would be discussed at greater length at the Aug. 6 board meeting in closed session.
One ballot measure calls for the county to establish zoning ordinances related to medical marijuana dispensaries while also limiting the county’s ability to receive federal funding to eliminate such dispensaries. The second ballot measure calls for a 3 percent tax on medical marijuana sales for the first three years, with an increase to 7 percent thereafter.
McPhail had his attorney answer questions last week about his move to initiate the ballot measures. 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. “I have heard very positive feedback for the measures.”
Granger’s office has already returned a title and summary for the initiatives to McPhail and his attorney. Law requires the title and summary be unbiased and factual. Curro said the next step in the initiative process is for McPhail to publish a public notice of the title and summary. Then he can begin collecting signatures to get the initiative on the ballot.
To qualify a ballot measure, McPhail will need to gather 1,642 signatures for each initiative by Dec. 30.
Curro said elections staff members will certify the petitions by doing a random check of the signatures collected. She said state law governs how many of the names and addresses have to be verified. A computer program selects the signatures to be reviewed at random.
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 zoning or call for an election to place the ballots on next year’s June 3 statewide primary election. Due to Proposition 13 requirements, they cannot approve the taxation ordinance without approval of voters.
Gonzalez and Granger both recommended that supervisors direct department heads to begin looking at the potential impact of both initiatives on the county. Granger said if the petition is certified, supervisors will have 30 days to present reports. He said if they want to consider a pre-election or post-election challenge to the ballot measures, they would need reports to back up their legal arguments.
“None of that time to put the reports together is reimbursable,” said Supervisor Margie Barrios. “Will the county have to use general funds or go outside for help because staffing levels are low?”
Staff members confirmed the financial burden of putting together reports would be on the county.
Supervisor Anthony Botelho asked how an initiative could be pursued when it is in direct conflict with a federal law.
“That is something we will discuss more in depth in August,” Granger said. “The board is faced with several choices – whether or not they want to bring legal action to set it aside because it violates federal law and whether to do it pre-election, which is harder to do, or post-election.”
Botelho expressed concern that legal proceedings against Purple Cross Rx had already cost the county a lot of money.
“It will continue to cost money,” he said.
The fee to file an initiative is $200, set by a state statute.
Granger touched briefly on potential legal issues with the tax initiative.
“The taxation portion is very troubling,” he said. “The DEA argument has been made in other cities, like Oakland and West Hollywood, whether we are conspiring with a private citizen to break a federal law and if we are benefiting from ill-gotten goods.”
Roberts said at the full 7 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 if black market sales are curbed, Roberts said.
Granger said there would have to be serious legal discussions before the county could collect tax revenue from the sale of medical marijuana, even if the ordinance were to be approved by voters.
McPhail and his attorney were not present at the board meeting.

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