Agenda - Planning Commission - 01/04/2018

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Zoning Bulletin December 10, 2017 I Volume 11 I Issue 23 Citation: City of Vallejo v. NCORP4, Inc., 15 Cal. App. 5th 1078, 223 Cal. Rptr: 3d 740 (1st Dist. 2017) CALIFORNIA (09/29/17)—This case addressed the issue of whether a city ordinance, which granted limited immunity from prosecution as public nuisances to marijuana dispensaries that consistently paid businesses taxes and met other requirements, improperly amended an earlier city ordinance, which placed a business license tax on marijuana businesses, by making activ- ity that was legal at the time committed (or at least subject to very limited penalties) suddenly and retroactively illegal (or subject to greater and much different penalties). The Background/Facts: California laws permit medicinal and recreational use of marijuana. While those laws permit the use of marijuana, they do not "mandate that local governments authorize, allow, or accommodate the exis- tence of' marijuana dispensaries. Nor do they preempt "the authority of Cali- fornia cities and counties, under their traditional land use and police powers, to allow, restrict, limit, or entirely exclude facilities that distribute medical marijuana, and to enforce such policies by nuisance actions." The City of Vallejo (the "City") has several ordinances affecting the opera- tion of medical marijuana dispensaries. The City's zoning ordinance prohibits all uses not expressly permitted, and declares unpermitted uses to be "a public nuisance." The City's zoning ordinance does not recognize marijuana dispen- saries as a permitted or designated land use, and, therefore, such a use is an unpermitted nuisance. Despite the fact that marijuana dispensary uses were not permitted under the City's zoning ordinance, they nonetheless were "proliferating." Noting a lack of financial resources to enforce land use restrictions, the City attempted to take a first step of "taxing and regulating these businesses." In 2011, City voters approved "Measure C" which placed a business license tax on marijuana businesses. In 2015, the City adopted Ordinance No. 1715, which provides that medical marijuana dispensaries are a public nuisance but grants immunity from prosecution to those dispensaries that have consistently paid business taxes and meet other requirements. NCORP4, Inc. ("NCORP4") was a nonprofit corporation operating a medi- cal marijuana dispensary in the City. The City denied NCORP4's request for limited immunity under Ordinance No. 1715 because NCORP4 had not paid most of its marijuana business taxes due under Measure C. In its application for limited immunity, NCORP4 offered to pay delinquent taxes and penalties. The City denied NCORP4's application and then sought to enjoin NCORP4's operations. In May 2016, the City sued to enjoin operation of NCORP4's medical marijuana dispensary. The trial court denied the City's requested injunction. The court found that Ordinance No. 1715 improperly amended Measure C by increasing the penalty for nonpayment of taxes. The court determined that Ordinance No. 1715 amounted to "in essence an ex post facto law, making activity that was legal at the time committed (or at least subject to very limited penalties) suddenly and retroactively illegal (or subject to greater and much different penalties.)" The City appealed. The City contended that it could lawfully preclude © 2017 Thomson Reuters 3