Calaveras Cannabis Farmers File Class Action Lawsuit Over Cultivation Ban

A rural California county that placed a significant wager on a cannabis green rush–only to later impose a ban after taking in millions in taxes from cannabis farmers–faces a massive collection demand from farmers wanting their money back.

Two of California’s most powerful cannabis attorneys have a registered class action lawsuit on behalf of former cultivators in Calaveras County that are demanding the return of at least $16.3 million in fees and taxes. Many farmers were forced out of business by the county ban.

The lawsuit is the latest chapter in a long, chaotic saga that may well be dubbed the Great Calaveras Cannabis Debacle.

Seventy miles north of Sacramento, Calaveras County is a depressed former Gold Rush hamlet of 45,000 people, where local industries including mining, a cement plant, and sawmills long ago shuttered.

In 2015, the county was devastated by wildfire that destroyed 860 homes. Unauthorized cannabis farms soon bloomed beneath charred oaks and pines as marijuana speculators snatched up devalued properties. A receptive Board of Supervisors passed a pro-cultivation ordinance that sought to make cash for the county’s economic recovery when controlling the local industry and capping the influx of unauthorized farmers.

By a June 2016 registration deadline, Calaveras had collected $3.7 million in $5,000-per-farm registration fees from over 700 cannabis cultivators. Five months later, voters heartily approved an initiative, Measure C, to impose cultivation taxes of $2 per square foot on outside farms and $5 per square foot on indoor gardens. The county would eventually amass $12.3 million in cultivation taxes, with all the money to fund county plans, including new hires of sheriff’s deputies and code enforcement officers for cannabis regulation.

“It is time for light to be shone on the bait and switch of the Calaveras County Commercial Cannabis program.”


But in the same 2016 election, residents also rejected another initiative, Measure D, which would have sweetened local farming principles. They also voted in new supervisors, who were decidedly hostile to cannabis.

Last October, as the county was collecting on cultivation tax statements and farm registration fees, supervisors voted 3–2 to impose a total ban on marijuana production, effective spring 2018. In early June, infuriated cannabis farmers encouraged out media members as they destroyed valuable plants until they were ready for harvest.

The lawsuit, filed by the firms of Henry G. Wykowski and Associates, of San Francisco, and William G. Panzer, of Oakland, doesn’t directly take on Calaveras County over its cultivation ban. Rather the class action charges that the county violated the California Business and Professional Code by wrongly collecting fees and taxes on growers before California cannabis regulations and licensing requirements went into effect Jan. 1, 2018.

Wykowski and Panzer are huge names in California cannabis law and politics. Wykowski represented Oakland’s Harborside dispensary in a successful legal challenge to a national property seizure and is a top tax lawyer in challenging Internal Revenue Service actions against marijuana companies. Panzer, a prominent criminal defense attorney in cannabis cases, helped author California’s 1996 Proposition 215 medical marijuana initiative, the first successful statewide cannabis measure in the nation.

In a statement accompanying the lawsuit, filed in Calaveras County Superior Court on August 3, lead plaintiff Andrew Greer said: “Calaveras County required the registered farms to adhere to a specific and rigorous set of rules to operate. … This is a case of taxation without representation. It is time for light to be shone on the bait and switch of the Calaveras County Commercial Cannabis program. ”

Greer, CEO of a company named Golden State Herb, is one of two individual plaintiffs in the suit, together with fellow former Calaveras cultivator Adam Ray. The suit seeks monetary damages on behalf of all growers who paid fees and taxes to the county.

“Despite having dutifully paid the taxes and registration fees (to the county) in anticipation of State of California cannabis licenses in 2018, and in anticipation of their ability to legally cultivate thereafter, no farmers are now able to cultivate cannabis within the county,” the lawsuit states.

The Calaveras County Counsel’s office, which declined comment on the action, told Leafly Thursday that county officials still hadn’t formally been served with the suit.

The county declared in June that it was facing a $9.2 million budget shortage , a shortfall worsened by loss of future cannabis revenues. The county is considering raising local hotel taxes to offset the effect.

The vitriol over the cannabis issue from the county was personified by Supervisor Dennis Mills, a fiery opponent of regulation who led last year’s 3–2 vote for the ban.

“This county has repeatedly spoken out against this,” Mills told Leafly around the time of the ban. Marijuana was among the difficulties. People asked me how I felt about it. And I told them outright. ”

Mills was joined from the ban vote by Supervisors Gary Tofanelli and Clyde Clapp. Cannabis advocates later tried and failed to remember Mills and Tofanelli. Clapp faces an election challenge in November after finishing a close second in the June primary to Ben Stopper, who contended that the ban could force deep cuts in the county workforce and services.

Released at Fri, 17 Aug 2018 22:14:11 +0000

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