Proponents of a follow-on medical marijuana clinic permitting petition failed to meet the December 7 deadline for filing with the Upland City Clerk sufficient signature endorsements to qualify an initiative that would have forced the city to hold a special election sometime in Spring 2016.
The same group, bankrolled by wealthy strip club owner Randy Welty, working with the California Cannabis Coalition qualified a similar proposal last year. But the city thwarted the California Cannabis Coalition’s goal of having the matter decided during a special off-year election on technical grounds. Instead, the city and its lawyers last spring succeeded in persuading a San Bernardino Superior Court judge that the election would need to be consolidated with the general election in November 2016. That court ruling prompted the second and most recent signature-gathering effort.
In October 2014, 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, 2015 Beresh and Welty on behalf of the California Cannabis Coalition and others involved in the signature-gathering effort came to Upland City Hall and handed over to then-Upland administrative services director/city clerk Stephanie Mendenahll an 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 that governmental  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, 2015, 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 north side 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.
Referencing the $75,000 licensing fee, Adams and his assistant, deputy city attorney James Touchstone, asserted that if a governmental fee exceeds the cost of providing services, licensing and inspection, it is not a fee but a tax and that, according to the California Constitution, 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 was cost. The county registrar of voters would charge the city somewhere between $75,000 and $180,000 to handle the election as a stand-alone June 2015 event. The city stood to reap considerable savings by putting the election on the November 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 saw 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 believed that through the aggressive and energetic use of social media and networking among that portion of the city’s electorate most favorably inclined toward the accessibility to medical marijuana and marijuana use in general, they could 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 might fail to participate.
Diamond, on behalf of the sponsors of the initiative, filed 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 matter came before Judge David Cohn, who wrung from both sides an agreement to let him decide the matter as a bench trial without a jury. Cohn then pressed Diamond to deconstruct the city’s primary defense for waiting until 2016 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.
When the Cannabis Coalition’s attorney, Diamond, failed to satisfactorily convince him that the fee does not rise to the level of a tax, Cohn ruled against the Cannabis Coalition and in favor of the city. “Saying ‘This is clearly a fee,’ doesn’t make it a fee,” Cohn said. “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.”
At that point, Welty and Beresh headed back to square one and in June 2015 took up a second petition drive, this time one in favor of a marijuana clinic-permitting initiative that omitted the provision for the $75,000 fee. They had until December 7 to obtain the requisite signatures to force the issue onto the ballot. Armed with the valid signatures, names and addresses of the 6,865 voters who endorsed the first petition turned in to the city clerk in January, Welty and Beresh appeared poised to be able to go directly to those voters and reproduce the success they had earlier achieved. Accompanying the second petition drive were threats that emanated from their camp that they would also seek the recall of members of the council who had opposed their first effort.
At a council meeting he attended in August 2015, Beresh told the Sentinel his group had gathered what was nearly a sufficient number of signatures to qualify the initiative for the ballot. He said that his group was trying to make a determination as to what the most advantageous timing would be with regard to turning the petitions over to the city clerk.
Then, in September 2015, Hal Tanner, a former assistant warden in the California Prison System who lives in Upland, served Mayor Musser with recall papers, beginning a petition drive to remove him from office. It was unclear whether Tanner was in any way affiliated with Welty and Beresh, but the recall effort he led appeared to be a fulfillment of one of Beresh and Welty’s recall threats. Tanner subsequently denied being involved with the marijuana dispensary legalization effort. No recall effort against Bozar or Timm accompanied the one targeting Musser.
Meanwhile, a group, Upland Parents Against Drugs, led by Jackie Nutting and Pat Almazan, undertook a grassroots effort to thwart the signature gathering effort by the California Cannabis Coalition. They shooed and shamed signature gatherers from public locations where the petition gatherers for the first initiative had previously experienced success, such as grocery store and shopping center parking lots. They devised a handbill entitled “Bad Medicine For Upland” which called upon Upland residents to eschew the petition and they made a concentrated effort to distribute the flyer to registered voters throughout the city, particularly those who had signed the first petition.
A confluence of factors – including the efforts by Upland Parents Against Drugs and a backlash related to the recall effort against Musser, as well as Welty’s failure to infuse the signature gathering effort with as much money as he had provided toward the previous effort – resulted in the petition drive coming up short. How short is not known, as the keepers of the petitions are not required to publicly release them. As the D-hour approached, 6 p.m. – when City Hall closes – on December 7, initiative opponents were bracing themselves for what they considered to be the worst. But when City Hall shut its doors that evening, no one representing the California Cannabis Coalition had arrived and the second effort was officially dead.
Efforts to obtain a reaction from Welty were unsuccessful. A call to the Tropical Lei was met by an employee who acknowledged that Welty owned the strip establishment but that “He’s never here, Bro. I never see him. You’ve got to get a hold of him on his cell phone.” He did not provide Welty’s cell phone number.
Jackie Nutting said, “The members of Upland Parents Against Drugs are resolved to fighting the Cannabis Coalition and all others who seek to endanger our children for their own personal gain. The fact that the coalition could not even gather enough signatures to qualify their petition for a special election shows that Upland citizens will act wisely when given the truth.”
Nutting continued, “The members and volunteers of Upland Parents Against Drugs fought diligently with their time and their money in order to win this battle. Again in January we will be reaching out to PTA members and other such groups to begin our fight against the November 2016 ballot initiative in favor of legalizing marijuana dispensaries.”
Almazan told the Sentinel, “I am just happy that smarter, sensible heads prevailed and people realized that pot shops, delivery vans and the cultivation of pot is not right for our community. However, come November 2016, in the general election, Upland residents will have the opportunity to officially vote this issue in or out once and for all. Many dedicated individuals came together and worked hard on this issue. It takes a village and that village came out.”