Is SLO’s marijuana shop approval process unbiased?

January 8, 2020

By KAREN VELIE

After the city of San Luis Obispo approved three businesses to operate marijuana retail shops, the members of each proposed business passed their criminal records checks. But city staff later rejected one company’s approval based on a police officer’s questionable assumptions.

In late 2018, after public officials failed to report campaign donations from marijuana kingpin Helios Dayspring, the city council voted to allow three retail pot shops to open in the city.

Council members then created a selection criteria to determine the winners of the three lucrative cannabis retail permits, a benchmark that appeared to promote specific candidates.

For example, the city provided extra points if a company had enough money to purchase their property while also handing out points for having a minority owner with financial difficulties.

In March, city staff announced three companies had received the most points: Dayspring’s Natural Healing Center, Megan’s Organic Market and Elemental Wellness. Shortly afterwards, several city staffers, who asked not to be named to protect their employment, said city officials wanted staff to change the scores to knock Elemental Wellness out. The employees refused.

SLO police detective Suzie Walsh was then charged with interviewing the applicants.

During the April interviews, she asked odd questions such as, “Have you ever been cruel to animals? Have you ever been involved in a lawsuit? Have you ever had a building code violation?” Even though Walsh does not have a business background, she inspected a number of corporate and business documents.

Walsh then chastised Elemental Wellness for providing misleading or false documents. In her report on Elemental Wellness, Walsh notes that the company did not file a power of attorney with a county clerk recorder (not a legal requirement); that the company did not have a DBA (doing business as), which the application noted was required; and that a minority partner signed an agreement in a Starbucks parking lot without meeting the other partners.

Walsh also voiced concerns that minority partners had limited or no involvement in the preparation of the city application, a common practice in business.

In response to the question, “Have the police ever been called to your home for any reason,” another minority partner, Johnathan Martines, checked no. However, police had been at his home for a domestic dispute call, though no action was taken. Walsh determined this showed the applicant had made false and misleading statements.

Based on Walsh’s report, Chief Deanna Cantrell asked city management to disqualify Elemental Wellness, boosting SLOCal Roots into third position. The SLOCal Roots team is currently working through the background screening process.

“The City’s process is being administered fairly and objectively and no pre-determinations of any kind were made, nor were there any preferences afforded to any applicant for reasons other than the merit of the application,” said City Attorney Christine Dietrick. “All applicants were asked to submit the same background packages and respond to the same set of questions, which are consistent with questions asked of applicants in a broad scope of circumstances where background checks are required. Background checks are a best practice.”