Judge squashes lawsuit seeking to reverse Grand County’s marijuana taxes | SkyHiNews.com

Judge squashes lawsuit seeking to reverse Grand County’s marijuana taxes

A lawsuit seeking to reverse Grand County’s voter-approved 5% sales tax on retail marijuana has gone up in smoke.

Grand County District Judge Mary Hoak dismissed David Michel’s lawsuit against the Grand County Board of County Commissioners in a May 19 ruling recently obtained by the Sky-Hi News. Because the case was dismissed with prejudice, it cannot come back before the court.

In the lawsuit, Michel contested two ballot questions — one pertaining to the 5% tax on retail marijuana sales and another that put a 5% excise tax on the first sale or transfer of unprocessed retail marijuana by a cultivation facility. Both passed in November 2018.

Michel challenged the voter-approved taxes by claiming the ballot questions contained misleading information that failed to accurately state certain financial information and the fiscal impact of the taxes.

Reached over the phone, Michel, general counsel for IgadI, a marijuana dispensary in Tabernash, didn’t want to comment on the case.

“The judge’s opinion speaks for itself,” he said in response to questions about judge’s ruling.

Michel emphasized that he filed on his own behalf, as a county voter, and he said the lawsuit has nothing to do with IgadI, which boasts having “the largest observable marijuana grow in the world,” in addition to its retail sales floor and product sales through the dispensary and its “dispensing partners around the state.”

In places, the county sought to defeat Michel’s suit by beating him on procedure and technicalities, including a rather dubious claim that he failed to properly identify the commission in his complaint against “The Grand County Board of County Commissioners.”

Another misstep might have come up when Michel served the commissioners instead of the clerk, as he was supposed to do, but that fact by itself was not enough to convince Hoak to discard the lawsuit. Instead, the judge granted the commissioners’ request to dismiss based on how she interpreted the merits of Michel’s case. 

“The court, therefore, finds that even if Michel is correct that the BOCC provided inaccurate or misleading fiscal information, such fact does not state a claim for relief because the BOCC is not required to provide any fiscal information at all under section 1-7-902 and Michel has not cited any other statue requiring such information,” Hoak wrote before explaining that Michel’s attempt to argue the lawsuit on another precedent set by the Colorado Supreme Court was just as futile.

In the ruling, Judge Hoak explained that the Supreme Court case Michel cited involved an initiative petition to amend the Colorado Constitution, and a board composed of the secretary of state, director of the legislative drafting office and attorney general was required to prepare a summary of the proposed amendment. The summary they crafted included language about the “fiscal impact,” and that formed the basis of the dispute, Hoak added. 

“Ultimately, the Colorado Supreme Court found the fiscal impact was ‘without an adequate basis’ and reversed the board’s decision to include it in the summary,” the judge summarized.

But in Michel’s case, the judge found he didn’t demonstrate the “fiscal impact” described in the Supreme Court case was the same as the “fiscal information” at the heart of his lawsuit against the county commissioners and dismissed the lawsuit.

In response to Michel’s accusations the ballot questions contained false or misleading information, Grand County Commissioner Rich Cimino defended the information presented to voters in November 2018.

“I will stand by the estimates we provided were the best available based on the info we were able to gather,” Cimino said. “We respect the judge’s decision, and we are happy to move forward.”

Timeline of Dispute

Aug. 21, 2018 – The Board of County Commissioners approves ballot measures 1A and 1B. Measure 1A increases sales tax on retail marijuana by 5 percent and measure 1B increases excise tax on retail marijuana by 5 percent.

Oct. 23 – IgadI general counsel David Michel approaches the county commissioners with his concerns regarding the financial impact statements. Measure 1A claims to increase tax revenue by $310,000 and measure 1B claims to increase tax revenue by $155,000.

Nov. 6 – Election Day. Measure 1A passes by 693 votes and 1B passes by 537 votes.

Nov. 21 – Election results are certified by the county clerk.

Dec. 1 – Michel files contest of measures 1A and 1B in the Grand County District Court on the basis that the financial impact statements were misleading to voters and therefore the ballot measures should be overturned.

Dec. 11 – Michel serves the county commissioners with his contest of measures 1A and 1B.

Dec. 18 – County files motion to dismiss the lawsuit on the grounds of lack of jurisdiction and failure to state a claim upon which relief can be granted.

Dec. 19 – Dill Dill Carr Stonbracker & Hutchings, P.C. files entry of appearance on behalf of Michel.

Jan. 8, 2019 – Dill Dill Carr Stonbraker & Hutchings, P.C. files response to motion to dismiss on behalf of Michel.

Jan. 14, 2019 — County files reply to the response to the motion to dismiss.

May 19, 2019 – Judge Hoak dismisses the case.


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