Sacramento Sued Over Its Neighborhood Responsibility Plan

A group of marijuana businesses is suing the City of Sacramento for allegedly overstepping its regulatory authority by slapping an additional fee on their operations.

At the center of the lawsuit is Sacramento’s Neighborhood Responsibility Plan, which seeks to mitigate negative impacts from "novel business activities” like marijuana. As part of the NRP, Sacramento has imposed a fee equivalent to 1% of gross revenues on cannabis businesses.

The plaintiffs argue that the fee has nothing to do with the health or quality of Sacramento neighborhoods. The city already charges a Cannabis Business Operations Tax. The plaintiffs allege it is 100 times higher than that of all other businesses.

Additionally, “cannabis retailers, cultivators, distributors and manufacturers in Sacramento are required to obtain a Conditional Use Permit ("CUP") or modify an existing CUP,” according to a press release from the plaintiffs’ legal team. “The Neighborhood Responsibility Plan is a requirement of cannabis businesses but lacks the legally required relationship and/or nexus with the actual impact of the project and, therefore, oversteps the City's authority to regulate and extract fees under the Mitigation Fee Act.”