Post-Election Roundup—California 2020 Cannabis Ballot Measures

November 17, 2020Client Alert

Cannabis was, arguably, the biggest winner on Election Day this year. Voters in Arizona, Montana, New Jersey, and South Dakota approved ballot measures legalizing adult-use cannabis, thus bringing the total to 15 states that have legalized recreational cannabis. Voters also approved new medical cannabis markets in Mississippi and South Dakota, capping a clean sweep of state legalization measures in the 2020 election.

Here in California, Election Day also opened the door to more than two dozen new local markets for cannabis businesses. According to tallies by California NORML, there were at least 35 cities and counties in California with cannabis ballot questions, and most of those ballot initiatives were largely successful. While many of the ballot measures simply authorized a cannabis-related tax, as opposed to a full-scale authorization of commercial cannabis activity, the approval of a tax measure is typically a positive sign that an actual regulatory measure will be on the next ballot, followed by a business licensing process. In other words, more business licensing opportunities in California are on the horizon.

Here is a breakdown of the various localities that voted on cannabis ballot measures and the results:

Artesia: Measure Q (Approved)

Voters in this Los Angeles County suburb authorized a new 15% gross-receipts tax on cannabis businesses and a tax of $20 per square foot of cannabis cultivation.

Measure Q passed with 67% of the vote.

Banning: Measure L (Approved)

In 2018, voters in this desert town near Palm Springs approved Measures N & O, allowing cannabis cultivation, manufacturing, testing and retail dispensaries within the city. However, distribution activity was inadvertently left out of Measures N & O.

This year, voters approved Measure L, which authorizes cannabis distribution activity within the city and imposes a distribution tax of up to 10% on gross receipts.

Measure L won 69% of the vote.

Benicia: Measure D (Approved)

Voters in this small town in the Bay Area approved a non-binding advisory opinion that the city should allow new retail cannabis dispensaries.

Measure D narrowly passed with 51% of the vote.

Calaveras County: Measure G (Approved)

Voters in this eastern Sierra county approved a new tax structure, establishing a maximum cannabis activities tax, not exceeding $7.00 per square foot for cultivation area and 8% of gross receipts for all other cannabis activities.

Measure G passed with 64% of the vote.

Calabasas: Measure C (Approved)

Voters in the town of Calabasas, which currently prohibits all cannabis businesses, approved a 10% gross receipts tax on all cannabis activities.

Measure C passed with 61% of the vote.

Commerce: Measure SB (Rejected)

Voters in Commerce rejected a citizen-initiated measure that would have adopted six development agreements that had previously been struck between city officials and various licensees.

Measure SB only garnered 43% of the vote.

Costa Mesa: Measure Q (Approved)

Voters in this Orange County city approved a 4%-7% gross receipts tax on cannabis retail activities, thus paving the way for Costa Mesa to become the second city in the county to allow retail dispensaries.

Measure Q passed with 66% of the vote.

Encinitas: Measure H (Approved)

Voters in this beach town north of San Diego authorized cannabis retail, cultivation, and manufacturing activities with certain restrictions. The city currently bans all commercial cannabis activity.

Measure H narrowly passed with 51% of the vote.

Fairfield: Measure C (Approved)

Voters in this town northeast of the Bay Area approved a 6% gross receipts tax for retailers, a tax of up to $10 per square foot of canopy for cultivators, and a 4% gross receipts tax for all other cannabis business types.

Measure C passed with 65% of the vote.

Grass Valley: Measure N (Approved)

Voters in this Sierra mountain town approved an 8% gross receipts tax for retailers, a tax of up to $7 per square foot of canopy for cultivators, and a 6% gross receipts tax for all other cannabis business types.

Measure N passed with 62% of the vote.

Hawthorne: Measure CC (Approved)

Voters in this Los Angeles suburb approved a 5% gross receipts tax on all cannabis businesses, generating no revenue until cannabis businesses are permitted in the city.

Measure CC passed with 62% of the vote.

Jurupa Valley: Measure U (Rejected)

Voters in this Riverside County city rejected a measure that would have expanded the number of retailers allowed in the city from seven to nine and increased taxes on all cannabis businesses.

Measure U narrowly lost, garnering nearly 49% of the vote.

King City: Measure P (Approved)

Voters in this Monterey County city authorized a tax of up to 5% gross receipts on the retail sale of cannabis products, including hemp products, and up to 2% of gross receipts on the distribution of cannabis products generated from outside of the city.

Measure P passed with nearly 70% of the vote.

Laguna Woods: Measure V (Approved)

Voters in this Orange County city approved a non-binding advisory opinion that the city should allow cannabis retailers. The city currently bans all commercial cannabis activity.

Measure V narrowly passed with 51% of the vote.

La Habra: Measure W (Approved)

Voters in this Orange County city authorized four retail delivery businesses and a tax of up to 6% gross receipts on all cannabis businesses. The city currently allows cannabis distribution and testing labs.

Measure W passed with 68% of the vote.

Lemon Grove: Measure J (Approved)

Voters in this San Diego County city approved a new tax structure, establishing a maximum 8% gross receipts tax for retailers and a 4% gross receipts tax for all other cannabis businesses.

Measure J passed with 72% of the vote.

Madera: Measure R (Approved)

Voters in this Central Valley town authorized a tax of up to $10 per square foot of canopy for cultivators, a 6% gross receipts tax on retailers, and a 4% gross receipts tax on all other cannabis business types. The city currently bans all commercial cannabis activity.

Measure R passed with 67% of the vote.

Marina: Measure Z (Approved)

Voters in this Monterey County town approved restricting cannabis businesses’ proximity to parks and recreation centers and maintaining a 5% gross receipts tax on cannabis businesses. The measure additionally added a cap of three adult retailers and three medical dispensaries and continued to prohibit recreational sales to those under 21.

Measure Z passed with 72% of the vote.

Marysville: Measure N (Approved)

Voters in this Northern California town (north of Sacramento that is) approved taxes on cannabis businesses. Specifically, 6% of gross receipts for retail, 4% of gross receipts for other cannabis businesses, and $10 per square foot for cultivation.

Measure Z passed with 63% of the vote.

Mount Shasta: Measure L (Rejected)

Voters shot down Measure L, which would have allowed the regulation and licensing of cannabis businesses in this Siskiyou County town.

Measure L failed with only 40% of the vote.

Oceanside: Measure M (Approved)

Voters in this coastal San Diego County city approved a 6% gross receipts tax on cannabis retailers, manufacturers, anddistributors and a tax of up to 3.5% gross receipts for cultivators.

Measure M passed with 63% of the vote.

Ojai: Measure G (Approved)

Voters in this quaint Santa Barbara town approved a general cannabis business tax beginning at 3% of gross receipts for all cannabis businesses. It is estimated that Ojai city officials could increase that tax to as much as 10%.

Measure G passed with 70% of the vote.

Pomona: Measure PO (Approved)

Voters in this Los Angeles County suburb approved a commercial cannabis permit program that would allow up to eight permits for cannabis businesses, requiring these businesses to be at least 1,000 feet from schools, daycares and youth facilities.

Measure PO passed with 59% of the vote.

Porterville: Measure R (Approved)

Voters in this Central Valley town approved a tax of up to $25 per square foot of canopy for cultivators or 10% of gross receipts.

Measure R passed with 59% of the vote.

San Bruno: Measure S (Approved)

Voters in this San Francisco suburb approved a general cannabis business tax of up to 10% of gross receipts which will not serve to generate any revenue until San Bruno votes to remove the prohibition on all cannabis businesses.

Measure S passed with 64% of the vote.

San Joaquin County: Measure X (Approved)

Voters in this Central Valley County approved a general tax of 3.5%-8% of gross receipts for all cannabis business types as well as an annual $2-per-square-foot fee for cultivators.

Measure X passed with 66% of the vote.

Solana Beach: Measure S (Rejected)

Voters in this San Diego suburb rejected the prospect of allowing two storefront cannabis retailers/ delivery operators, indoor cultivation, and delivery. The city currently prohibits all cannabis businesses.

Measure S failed with only 37% of the vote.

Sonoma: Measure X (Approved)

Voters in this rural Northern California town approved a general cannabis and hemp business tax of up to 4% for retailers, manufacturers, and indoor growers; 3% for distributors; 2.5% for outdoor cultivators; and 2% for testing labs.

Measure X passed with an astounding 79% of the vote.

Tracy: Measure W (Approved)

Voters in the Central Valley town of Tracy approved a 6% tax on gross receipts for cannabis retailers, $12 per square foot for cultivation and a 4% tax on gross receipts for other cannabis businesses.

Measure W passed with 66% of the vote.

Trinity County: Measure G (Approved)

Voters in Trinity—one of the three counties that comprise the famed Emerald Triangle— approved cannabis cultivation taxes at a rate of $15.44 per pound for flower, $4.59 per pound for leaves, $2.16 per pound for fresh plants, and 2.5% of gross receipts for retail businesses (although the county does not yet allow retailers).

Measure G passed with 72% of the vote.

Vacaville: Measure V (Approved)

Voters in this Solano County town approved a 6% gross receipts tax for retailers, a 3% gross receipts tax for distributors, a 2% gross receipts tax for testing labs and a tax of $10 per square foot for cultivators.

Measure V passed with 65% of the vote.

Ventura: Measure I (Approved)

Voters in this town, just north of Los Angeles, approved a general cannabis business tax of up to $10 per square foot of canopy for cultivators, a 8% gross receipts tax for retailers and a 4% gross receipts tax for all other cannabis businesses. The city currently bans all commercial cannabis activity.

Measure I passed with 73% of the vote.

Ventura County: Measure O (Approved)

Voters in Ventura County, located between Los Angeles and Santa Barbara counties, approved an ordinance allowing cannabis cultivation, processing, distribution and sale within the unincorporated areas of the county, with limitations of 500 acres for indoor cultivation and 100 acres for indoor nurseries. Voters also approveda tax of 4% of gross receipts for cultivation and 1% of gross receipts on nursery cultivation. The county currently bans all commercial cannabis activity.

Measure O passed with 57% of the vote.

Weed: Measure B (Approved)

Voters in this small Northern California town, appropriately named “Weed,” approved the establishment of regulations on cannabis businesses including requiring licenses, limiting licenses, and other regulations on operations and conduct. Licenses to follow.

Measure B passed with 60% of the vote.

Yountville: Measure T (Rejected)

Voters shot down the measure that would have allowed for a single retail operation and a local cannabis tax of 3% of gross receipts. Currently, the city still prohibits all cannabis businesses.

Measure T failed with 33% of the vote.