A court ruling was issued Thursday on a $16.3 million cannabis lawsuit against the county for recovery of commercial cannabis cultivation taxes. Presiding Judge Timothy Healy overruled the county’s demurrer and denied its motion to strike, finding “plaintiffs have pleaded all essential facts as to each cause of action under California’s liberal pleading requirements,” according to the court record.

That means the complaint, which was originally filed in August by a cannabis cultivation company called Golden State Herb Inc., will proceed as a class action lawsuit, according to Henry Wykowski and Andrew Scher of Wykowski Associates and William Panzer, the plaintiff’s attorneys.

The company is seeking $12.3 million in Measure C taxes and $4 million-plus in fees received from cannabis cultivation businesses that participated in the county’s now obsolete Commercial Cannabis Urgency Ordinance Registration Program.

The class action status will make the case more efficient and economical, since the attorneys will be be able to represent each individual grower in one case, Scher said in a phone interview Friday.

“This is a very important ruling. It stands for the proposition that it’s a rightful cause, that the full amount of money paid to the county should be refunded to each claimant,” Scher said. “If necessary we’ll take it through trial, but hopefully the county can wake up and realize before that point that (the) money should be refunded and (stop wasting) taxpayer dollars on these proceedings. We fully expect that they’ll try to find ways to delay the case now, because we’re winning so far and that’s what defense attorneys usually try to do.”

County Counsel could not be reached for comment.

The next court date will be April 10 at 1:30 p.m. in Calaveras County Superior Court for a case management conference.

The Board of Supervisors voted to refund formerly registered growers approximately $900,000 in funds leftover from the cannabis regulatory program in a Jan. 22 meeting.

There were 26 possible claims for those that paid renewal registration fees with $130,000 budgeted for reimbursements. Additionally, there were opportunities for 736 claims for first-time applicants (permits that were initiated but were never processed in 2018). Refunds for those claims were budgeted at $768,741 in total.

Auditor-Controller Rebecca Callen told the Enterprise Friday that approximately $660,000 remains in that account at this time.

Of the 26 claims for renewals, 21 have been refunded a collective total of $105,000.

Of the 736 claims for first-time applicants, 124 have been refunded a total of $129,000.

This article was updated Mar. 8, 2019 to include that William Panzer is one of the plaintiff's attorneys.



Davis graduated from UC Santa Cruz with a degree in Environmental Studies. He covers environmental issues, agriculture, fire and local government. Davis spends his free time playing guitar and hiking with his dog, Penny.

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