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Are SLO officials skirting laws to protect marijuana kingpin?

February 16, 2019

Editor’s Note: This is first in a series about allegations of backroom deals in the battle to control the local marijuana market and San Luis Obispo officials’ attempts to withhold public information.

By KAREN VELIE

San Luis Obispo city officials are refusing to release details of marijuana store application forms as questions have been raised about the fairness of the process for picking who will be allowed to open local retail marijuana stores. [Cal Coast Times]

And, as city officials denied requests for public records about the nine applications filed in January, they also refused to divulge information about a fundraiser hosted by one of the applicants. Mayor Heidi Harmon and two current city council members all failed to report the fundraiser on their financial disclosure forms.

For more than two weeks, city officials have refused to allow CalCoastNews to review the marijuana store applications at city offices, posted redacted copies of applications online and repeatedly delayed the release of public records that could shine a light on the process of selecting the people who will be able to operate retail marijuana stores in the city.

The city attorney’s office has acknowledged in nearly three in four cases that its initial decisions to censor portions of records were improper under the law — but only after challenged by a reporter.

Heidi Harmon and Helios Dayspring

On Oct. 28, marijuana mogul Helios Dayspring and his marijuana brand Natural Healing Center hosted a fundraiser for eight politicians from local cities planning to open cannabis shops in the near future, including three from San Luis Obispo. Mayor Heidi Harmon and council members Carlyn Christianson and Erica Stewart then won their elections. But all three candidates failed to report the cost of the fundraiser on their financial disclosure form.

Almost a month later, on Nov. 27, the SLO City Council unanimously passed a resolution establishing criteria to rank marijuana shop applicants. It created a point system under which the city would award the top point earners the coveted pot shop permits. Legal marijuana shops regularly garner between $5 million to $10 million a year in sales in California.

The point system decision drew criticism that city officials were rigging the selection process in favor of certain local pot business owners, including Dayspring.

During the discussion, Harmon and Christianson sought extra points for people who live locally. In May 2018, Dayspring purchased a home on Los Osos Valley Road near Foothill Boulevard.

Harmon was also successful in granting eight extra points to marijuana businesses with at least three people, with 2 percent or greater ownership, who earned below the median income at the time of the application. Dayspring’s application lists four additional owners, each with 3 percent ownership, earning him the eight extra points.

One of the owners is Nick Andre, who along with Harmon founded and later co-chaired the SLO County Progressives. In his application, Dayspring includes photos of himself with leaders in the SLO Progressives including Harmon and SLO County Supervisor Adam Hill.

In late January, nine applicants applied for the three available cannabis retail shop permits. But city staffers have yet to release eight of the nine applications while posting a heavily redacted copy of Dayspring’s Natural Healing Center application on the city’s website. A review of the application shows Dayspring is in line to receive the top points available in almost every category.

City officials have refused to allow reporters to review the applications at the counter or to receive the applications through a public records request. Instead, the city attorney’s office claims posting a heavily redacted copy online satisfies the city’s transparency requirements.

While government agencies can redact documents posted on government websites, planning permit applications and many other public records are required to be viewable without redacting names and contact information at the counter upon request or in an email following a public records request.


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District Attorney Dan Dow has to look into this! Therealtruth’s comments are incredibly damning about the rigged application process the city is pursuing. The City Attorney’s abject refusal to comply with the Public Records Act requests, coupled with Dayspring’s political support of the Mayor and the two victorious Council candidates in return for an application process that favors only him, just reeks of corruption. And then the New Progressive’s leader Nick Andre, a primary backer of Heidi Harmon’s election, joins forces in the cannabis business with Dayspring? Not only does this not look good, it smells worse.


How can the city justify this behavior? It’s time for the city to undo it’s flawed application process and start over with an objective lottery system involving applicants whose qualifications can pass background checks.


This demands action! Surely Dan Dow can’t look the other way in the face of these revelations? Come on Dan, please stand up and investigate these transgressions. Letting it slide is not an option.


46

In my 53 years living in this town, I’ve never seen our local government act like this. Nothing surprises me about what this Mayor and Council are doing to our fair city. Something has got to give…


50

The real truth – Could you please call me at 805-234-1703 – Karen Velie


16

This boondoggle may end up in the hands of the Dan Dow and perhaps, eventually, the State Attorney General. The SLO City Council better be careful how this is handled. Would like to see this article appear in the Tribune and New Times but don’t bet on it!!


32

I am directly involved with the cannabis industry in SLO county. I have direct 1st hand knowledge of what is happening with the application process. Helios paid the city officials for the promise that all 3 storefronts would be granted to him. He purchased 3 retail locations in San Luis, then he reached out to several cannabis delivery services that had been operating in San Luis Obispo county for more than 5 years.He had slo tweak the point system so he could use it it his advantage. He proposed to the delivery services that if they used there business name on the application he would in return allow them to use the building with there name, have control over who is hired and the day to day operations.Helios also would pay the application fee and remodel the building in whatever design we would want. But we would only receive 10% of gross sales. He gets to pocket 90%. So without the general public knowing what’s really going on it seems that 3 lucky local businesses will get picked. But in reality, Helios will get #1, Megan’s market who sold their soul to Helios will get #2 (this is why on there website they are already stating there location will be at the old guitar store which is one of the buildings helios purchased) and #3 will be to what ever other fool took his offer and wanted so bad to see their business name on a storefront, and will work their ass off for a 10% payout. I didn’t take him up on his proposal, that’s how I know exactly what is happening. I feel bad for all the other businesses that wasted their money on the application fee. SOMEONE PLEASE INVESTIGATE SLO CITY OFFICALS. THEY TOOK A BRIBE FROM HELIOS ALL 3 BUILDINGS THAT WILL HOUSE THE BRICK AND MORTARS ARE OWNED BY HELIOS. HE HAS HIS HAND IN AT 90% OF GROSS SALES OF EACH OF THE COMPANIES THAT WILL BE AWARDED THE STOREFRONTS!


58

I also am involved in the local cannabis industry, have been for years. I don’t have direct knowledge of what is claimed above, bribes seem a little too far fetched, but I do have direct knowledge of other dirty tactics being used in the city to get these permits. The owner of 805 Beach Breaks, Brian Touey, in Grover Beach is doing something similar to what is described above about Dayspring. Touey suggested being involved in multiple projects, and has brought in delivery services to be the front people for the applications. Just look at the 805 application posted on the city website, it shows Stephanie Kiel with 55% ownership. Stephanie is the owner of Ethnobotanica delivery service, who is pretending to be local. It also shows Touey at only 9%. Do you think the owner of 805 Beach Breaks is really only getting 9% of his own dispensary? He was soliciting to delivery services and making offers that would publicly show numbers like 55% but really have side deals that gave the equity back to him. He is doing this because the majority owners need to have 5 years of cannabis experience to get the full points during the evaluation, and he doesn’t have that. He was calling people up until the final few days of the application period. I know of this directly. He is also working with political consultant Cory Black to try and win the licenses. Not only that but word in the industry is that 805 and Touey are involved in several illegal operations even after they won the coveted permit in Grover Beach. I also wonder about how they didn’t make the cut for a dispensary permit in Grover Beach after the city scored the applications, but somehow won a permit anyway after the city council changed their score…


Other applications in SLO look like they are doing the same thing. Look at Harvest’s application, they are a national company but a local cultivator with no retail experience has 91% ownership. Do you think a nationwide chain would give away that much control? Not likely. All the ownership percentages are posted on the city website for people to see.


24

I don’t see the applications on their website {Cannabis page}


Where are they??


Is there a link.


1

WHAT? Corrupt politicians and money right here in HAPPY HAPPY City? Nothing to see here people; just move along.


23

“But all three candidates failed to report the cost of the fundraiser on their financial disclosure form.”


This might be true, but it’s written in an “in-your-face,” confronting kind of style. As a seasoned journalist myself, I would just edit it to read: “The three candidates did not report the cost of the fundraiser on their financial-disclosure forms,” omitting the words “But” and “failed.”


“The city attorney’s office has acknowledged in nearly three in four cases that its initial decisions to censor portions of records were improper under the law — but only after challenged by a reporter.” This is weird. Is “nearly three” around two-and-seven-eighths? How many records are we talking about? And “censor”? Totally the wrong word: “withhold” might be accurate. And “challenge”? Not cool for reporter to go around “challenging.” If I wanted a public record, I would “request” it.


“City officials have refused to allow reporters to review the applications at the counter or to receive the applications through a public records request.” That’s quite an interesting statement: I wouldn’t mind seeing a sidebar describing the exact scene when the reporter or reporters actually walked into the place and made the request. That would make fine reading. Plus, we really should have some quotes from the official or officials on their side of the issue.


A little more editing might go far in assuring the reader that the news agency doesn’t have an “agenda.”


-26

Wow, George, you need a hobby… or a job. Instead of tossing around your meaningless criticism, why not volunteer to help Velie put out a really clean product if you are such a great editor? She and Josh do more real reporting work than the entire cast of kids from the other two local “newspapers.” Content is king. Appreciate what you’ve got.


33

Exactly


4

It’s quite telling when the local media are so incompetent so as to NOT go after real graft and corruption. There is TOO much smoke going up to ignore the “fire” so to speak. CCN, you’ve won me over.


4

Business as usual in SLO. Nothing new as the corruption still flourishes.


37

Smells stinky, bud.


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