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30 CA Counties and Cities Passed Referendums on Cannabis in 2020 Election

by Mike Goral, Ken Teasdale, Jeremy Sucharski

When Proposition 64 was approved by California voters in a state election in 2016, adult-use cannabis was legalized on a statewide basis.  However, local governments still had control over whether any part of the cannabis industry would be allowed in their jurisdiction.  It may come as a surprise to some that approximately 80% of local jurisdictions banned cannabis completely.

During the past four years, there have been many conflicts between the state and local governments that involved cannabis.  Social equity issues that limited the approval of new cannabis licenses and distributors’ desire to deliver across local jurisdictions are just two highly contested issues that have plagued the industry in recent years.

On November 4, 2020, no less than 30 California counties and cities had referendums that involved cannabis issues. All of them were passed by voters. Most of these provisions were not about social equity or delivery. Instead, they mainly involved changes to the tax rate, while a few involved adding cannabis as a new industry eligible for licenses to operate in the respective jurisdiction.

The COVID pandemic has decreased local jurisdictions’ tax revenue, and many local governments are looking for alternatives to replace this lost income.  Increasing taxes on cannabis goods is a popular choice. However, the illicit market continues to thrive, and unfortunately, these proposed tax increases may make matters worse for legitimate cannabis operators until law enforcement can increase their efforts.

If you have any questions, reach out to our experts.

November 19, 2020

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