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Moreno Valley cannabis operators press city for documentation on annual fees after Sheets ruling
Summary
A lawyer representing local cannabis licensees asked the council for transparency and records showing the citys annual regulatory and public benefit fees are tied to actual costs, citing U.S. Supreme Court and state precedent.
A representative for cannabis businesses urged the City of Moreno Valley to disclose how it calculated annual public benefit fees and regulatory permit fees for licensed cannabis operators, saying the city has not produced sufficient documentation to show the fees are tied to actual governmental burdens.
Katie Podine, who identified herself as general counsel to Syndicate Moreno Valley, told the council that Moreno Valley charges operators more than $78,000 in annual fees in addition to an 8% tax on gross receipts. She said she has submitted public-records requests since July 2023 and consulted with finance staff and the deputy city attorney but has not seen documents that demonstrate a rational connection between fees and government costs.
Podine cited the U.S. Supreme Court's decision in Sheets v. County of El Dorado, saying that fees imposed by local governments must have a rational connection to the burdens they address and the amount collected must be roughly proportional. She also referenced a California decision she identified as Seclaire Paint Co. v. State Board of Equalization and said the California Public Records Act, Proposition 26 and Proposition 218 require the city to provide relevant documentation.
Podine asked the city to provide the analysis, cost breakdowns and financial reports used to set the fees; she said that absent such documentation she must assume the fees are a hidden tax. She also submitted a letter with more detail as part of public comment.
City officials did not produce new financial documents during the public comment period; Podine said she had discussed the matter with the city's deputy city attorney and finance department prior to the meeting.
No council action was taken on the request at the Feb. 4 meeting; Podine asked for compliance with public-records law and for transparency on fee calculations.
