Sacramento cannabis business owners sue city over fee they say violates state, federal law

The Sacramento Bee reports…

The city of Sacramento is violating state and federal laws by charging a fee to cannabis business owners, a lawsuit alleges.

A group of Sacramento pot cultivators, distributors, manufacturers and retailers — with gross revenues in excess of $300 million and thousands of employees — filed the lawsuit earlier this month in Sacramento County Superior Court.

The city charges cannabis business owners a fee of 1% of their gross receipts, to be used to mitigate adverse impacts on the area the business is causing. The money is used for what’s called the Neighborhood Responsibility Plan program.

That fee is actually a special tax, meaning it should have been approved by voters by a two-thirds vote under the California Constitution, the lawsuit alleges. The finding that fees are necessary to mitigate negative impacts from business activities in the first place is unsupported, violating the California Mitigation Fee Act, the lawsuit also alleges.

And the 1% fee constitutes an “undue burden on commerce,” in violation of the state and federal constitution, the lawsuit alleges.


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