Subject: Legal Necessity to Restore Full Compliance with Measure C and State Law
Dear Chair Crandell and Members of the Board,
For an additional reason, I write in support of allowing the temporary cannabis cultivation tax reductions to expire on December 31, 2025. Ending the temporary rates is not only important for restoring fiscal balance and honoring the voter intent of Measure C, but it is also necessary to maintain compliance with State Law, including Proposition 218 and Article XIII C of the California Constitution.
Measure C established a tax based on the total cultivation area, defining both the rate and the taxable base approved by the voters. When the Board temporarily lowered rates and shifted the calculation to canopy area, those actions were permissible as short-term administrative relief. However, any attempt to make that narrower base permanent, or to continually extend the “temporary” reduction without returning to the original structure, would effectively redefine the tax approved by the electorate.
Under Proposition 218 and relevant case law (Howard Jarvis Taxpayers Assn. v. Roseville, 106 Cal.App.4th 1178 (2003)), a change to the basis or measure of a voter-approved tax constitutes a new tax that must be approved by voters. The County therefore cannot indefinitely extend the canopy-based calculation or reduced rate without violating both Measure C and State Law.
To remain in full legal compliance and uphold the public trust underlying Measure C, I respectfully urge the Board to:
Allow the temporary rate reductions to expire as scheduled, and
Restore both the original tax rate and the cultivation-area calculation method authorized by Measure C.
This action will return the County’s cannabis program to a clear and defensible legal footing while reaffirming the integrity of voter-approved taxation.
I respectfully recommend that the Board allow the temporary cannabis cultivation tax reductions to expire as scheduled on December 31, 2025.
According to the California Department of Cannabis Control’s 2024 Market Outlook Report (page 27), Lake County currently has the lowest cultivation tax structure in the State, with a weighted average of about $1 per square foot. Even if the rates revert to the original Measure C levels of $1 (outdoor), $2 (mixed-light), and $3 (greenhouse), Lake County would still remain one of the lowest, if not the lowest, tax structures in California. Adjusted for the Consumer Price Index (CPI) since 2018, those original rates would still fall within the lowest quartile statewide.
While the lower temporary rates were intended to support the industry during its formative years, they have come at a clear fiscal cost. The County’s cannabis program continues to spend more each year than it receives in revenue, effectively operating in a subsidized role. Even if reserves or general-fund offsets are used to balance the accounts, the ongoing gap between expenditures and receipts demonstrates that the program is not financially sustainable at current rates.
Allowing the temporary reductions to expire will help bring the program closer to fiscal balance without jeopardizing the competitiveness of Lake County’s cannabis industry. The County’s rates would still rank among the lowest in California, while ensuring that the program begins to pay for itself rather than draw from broader public resources.
Subject: Legal Necessity to Restore Full Compliance with Measure C and State Law
Dear Chair Crandell and Members of the Board,
For an additional reason, I write in support of allowing the temporary cannabis cultivation tax reductions to expire on December 31, 2025. Ending the temporary rates is not only important for restoring fiscal balance and honoring the voter intent of Measure C, but it is also necessary to maintain compliance with State Law, including Proposition 218 and Article XIII C of the California Constitution.
Measure C established a tax based on the total cultivation area, defining both the rate and the taxable base approved by the voters. When the Board temporarily lowered rates and shifted the calculation to canopy area, those actions were permissible as short-term administrative relief. However, any attempt to make that narrower base permanent, or to continually extend the “temporary” reduction without returning to the original structure, would effectively redefine the tax approved by the electorate.
Under Proposition 218 and relevant case law (Howard Jarvis Taxpayers Assn. v. Roseville, 106 Cal.App.4th 1178 (2003)), a change to the basis or measure of a voter-approved tax constitutes a new tax that must be approved by voters. The County therefore cannot indefinitely extend the canopy-based calculation or reduced rate without violating both Measure C and State Law.
To remain in full legal compliance and uphold the public trust underlying Measure C, I respectfully urge the Board to:
Allow the temporary rate reductions to expire as scheduled, and
Restore both the original tax rate and the cultivation-area calculation method authorized by Measure C.
This action will return the County’s cannabis program to a clear and defensible legal footing while reaffirming the integrity of voter-approved taxation.
Sincerely,
Thomas Lajcik
Dear Chair Crandell and Members of the Board,
I respectfully recommend that the Board allow the temporary cannabis cultivation tax reductions to expire as scheduled on December 31, 2025.
According to the California Department of Cannabis Control’s 2024 Market Outlook Report (page 27), Lake County currently has the lowest cultivation tax structure in the State, with a weighted average of about $1 per square foot. Even if the rates revert to the original Measure C levels of $1 (outdoor), $2 (mixed-light), and $3 (greenhouse), Lake County would still remain one of the lowest, if not the lowest, tax structures in California. Adjusted for the Consumer Price Index (CPI) since 2018, those original rates would still fall within the lowest quartile statewide.
While the lower temporary rates were intended to support the industry during its formative years, they have come at a clear fiscal cost. The County’s cannabis program continues to spend more each year than it receives in revenue, effectively operating in a subsidized role. Even if reserves or general-fund offsets are used to balance the accounts, the ongoing gap between expenditures and receipts demonstrates that the program is not financially sustainable at current rates.
Allowing the temporary reductions to expire will help bring the program closer to fiscal balance without jeopardizing the competitiveness of Lake County’s cannabis industry. The County’s rates would still rank among the lowest in California, while ensuring that the program begins to pay for itself rather than draw from broader public resources.
Sincerely,
Thomas Lajcik