(May 20) A San Bernardino County Superior Court Judge on Tuesday denied a petition by two Upland residents and the California Cannabis Coalition to force the city of Upland to stage a specially-called election this year on an initiative they had qualified for the ballot by collecting the signatures of more than 15 percent of the city’s voters endorsing a vote on allowing three medical marijuana dispensaries to operate in an area within the city limits along the north side of Foothill Boulevard near the city’s border with Claremont.
In October, a group of Upland residents, nominally headed by Nicole DeLaRosa and James Velez, and  sponsored by the California Cannabis Coalition, Craig Beresh and Randy Welty, undertook a petition drive to qualify for the ballot in Upland an initiative aimed at overturning  Upland’s ban on marijuana dispensaries.  Beresh is the California Cannabis Coalition’s president.  Welty, a coalition board member, has an ownership interest in 53 medical marijuana clinics throughout the state and owns Upland’s Tropical Lei nightclub, Upland’s Toybox adult bookstore, other adult bookstores located elsewhere, and at least four other strip clubs.
On January 14, Beresh and Welty on behalf of the California Cannabis Coalition and those involved in the signature-gathering effort came to Upland City Hall and handed over to Upland administrative services director/city clerk Stephanie Mendenahll the initiative petition endorsed with 6,865 signatures later determined to be valid  gathered in Upland. Per state law, an initiative petition that garners the valid signature endorsements of ten percent of the voters within a particular jurisdiction must be put on the ballot at the next regularly scheduled election in that jurisdiction.  An initiative petition that garners the signed endorsement of 15 percent or more of the voters in a particular jurisdiction requires that the initiative be put on a specially-scheduled ballot within that jurisdiction not more than 105 days after the petition is accepted as valid by the board overseeing the governmental entity overseeing that jurisdiction. That  governmental entity must bear the cost of that special election. The 6,865 signatures gathered by the petitioners represented more than 15 percent of the registered voters in Upland. Thus, the Cannabis Coalition, represented by its attorney, Roger Diamond, asserted that the city was obliged to put the initiative before the voters no later than June 23,  the first Tuesday after the elapsing of 105 days from the time the Upland City Council on March 9 officially acknowledged that the 6,865 signatures on the petition were valid.
Three members of the council, however, consisting of mayor Ray Musser, councilman Glenn Bozar and councilwoman Carol Timm, were adamantly opposed to reversing the city’s current ordinance, which bans cannabis clinics from operating anywhere in the city. Taking his cue from that troika’s political sentiment, city attorney Richard Adams researched the issue and brought forth a theory by which he asserted the city could postpone the election until the next regularly scheduled municipal election in November 2016.
The initiative imposes a set of limitations on the dispensaries and a protocol for their application and licensing. Under the terms of the initiative, the number of dispensaries in the city would be limited to three and they would have to be located within the relatively confined area north of Foothill Boulevard, south of Cable Airport, and between Airport Drive to the east and Monte Vista to the west. Each of the applicants for the three dispensaries would have to pay a $75,000 nonrefundable licensing fee intended, the initiative’s sponsors asserted, to cover the city’s costs in carrying out background checks and making other inquiries and efforts to process the applications and patrol the dispensaries once they were up and running.
It was with regard to this last point that Adams said the city had what he termed a “profound” basis for holding off until a regular election to let the city’s voters consider the initiative. Referencing the $75,000 licensing fee, Adams said, “The State Constitution indicates that if the fee exceeds the cost of providing the services, licensing and inspection, it is not a fee. It is a tax.” Further, according to the California Constitution, Adams said, a vote on a tax cannot be held in the venue of a special ballot but must be held during a regularly scheduled election.
The timing of the election was considered significant for two reasons. The first is the cost. The county registrar of voters would charge the city as much as $180,000 to handle the election as a stand-alone event this year. The city would reap considerable savings by putting the election on the 2016 ballot, when the mayor’s post, a single city council position and city treasurer spot are up for reelection. Secondly, advocates of the initiative see a special election as the forum in which sale of medical marijuana within the city limits of Upland is most likely to gain acceptance of the voters participating. Informal surveys of Upland voters show that, on balance, the city’s residents are against the initiative. But special elections normally have poor voter turnout and the initiative’s advocates believe that through the aggressive and energetic use of social media and networking among that portion of the city’s electorate most favorably inclined to the accessibility to medical marijuana and marijuana use in general, they can drive enough voters to the polls to prevail in a special election while a significant portion of the city population opposed to the concept of open access to marijuana fails to participate.
The city council, in a split 3-2 vote, with Musser, Bozar and Timm in ascendency and councilwoman Debbie Stone and councilman Gino Filippi dissenting, on March 9 voted to accept the initiative petition and schedule the vote for November 2016.
The city’s action prompted Diamond, on behalf of the sponsors of the initiative, to file a lawsuit on March 19 accompanied by a peremptory writ in which it was asserted the city had denied “the signers of the initiative…the full benefit of California law, which requires that the initiative be put on the ballot within 88 to 105 days of the certification of the signatures.”
The city did not have the legal option to postpone the election until next year, Diamond said, and Adams had misapplied the section of the California Constitution that prohibits governmental entities from imposing taxes on citizens without the benefit of a vote to an initiative brought forth not by the government but citizens. Moreover, Diamond, insisted, the fee involved in the Upland initiative was not a tax, but a reasonable element of the licensing procedure intended to recoup the city’s costs for accommodating medical marijuana dispensaries within its jurisdiction.
The matter came before Judge David Cohn in San Bernardino on Tuesday, May 19. After Cohn got Adams, assistant city attorney James Touchstone and Diamond to agree to have the matter adjudicated by motion, i.e., on the basis of his ruling rather than through a court trial, Cohn devoted the lion’s share of his questioning to Diamond. He questioned Diamond as to why the Cannabis Coalition was so intent on getting the initiative on a special ballot rather than having it voted upon during next year’s election, suggesting as he did so that it would stand a greater chance of passage during a special election. Diamond did not confirm that there was any political motive to his client’s desire for a special election, stating only that the goal was to make medical marijuana available to patients at the earliest date possible. Cohn then pressed Diamond to deconstruct the city’s primary defense for waiting until next year to hold the election, which consisted of its representation of the fee as a tax. Cohn asked Diamond to identify in a series of the city’s legal submissions evidence to controvert the city’s assertion that the $75,000 fee is a tax. In his responses, Diamond took aim at the city’s claim that the background checks, licensing processing, follow-up inspections and investigations would at most cost $56,540 and that enforcement and prosecutions of violations would run no more than another $10,000. Diamond asserted that the city had “artificially” minimized the cost and that while the exact costs could not be quantified ahead of time, the $75,000 fee was a reasonable one intended to cover the city’s outlays in accommodating the uses envisioned in the initiative. “You cannot come up with an exact mathematical figure when you are talking about a future event,” he said. “They [the city] can set any cost they want.”
Touchstone retorted that the total itemized costs of $66,540 was under the $75,000 specified in the initiative.
Telegraphing that he was inching toward ruling against the Cannabis Coalition, Cohn further pressed Diamond for proof the fee does not rise to the level of a tax. “Saying ‘This is clearly a fee,’ doesn’t make it a fee,” Cohn said.
Ultimately, when Diamond did not offer him an argument to persuade him that it was not a tax, Cohn ruled in favor of the city, denying the motion by DeLaRosa, Velez and the California Cannabis Coalition to place the initiative on a special election ballot. “I wasn’t able to find anything that stated $75,000 was a reasonable cost,” Cohn said. “The city has an affirmative obligation not to place a measure on the ballot it believes is unconstitutional.”
In the immediate aftermath of Cohn’s ruling, Diamond conferred with Beresh, the president of the California Cannabis Coalition who was present for the hearing, about whether his clients wanted to file an appeal. Shortly thereafter, he stated he was leaning toward taking the matter up with the court of appeal in Riverside, while weighing the relative merits of filing a appeal of Cohn’s ruling, which would afford the opportunity for oral arguments but might take months or even more than a year to be heard, or carrying a writ to the appeals court, which would be considered in a more timely manner but which could be dismissed without a hearing and might not entail oral argument.
By Wednesday, May 20, there were reports that the California Cannabis Coalition, with Welty’s financial backing, was preparing to undertake another petition drive. It is anticipated that Diamond will draft the new petition in such a way as to cure the defects in the petition the group circulated last year which allowed the city to delay the vote on the initiative to next year’s general municipal election.
Mayor Ray Musser, who attended the hearing, departed the courthouse without  comment.