By KAREN VELIE

Amid allegations of threats and backroom deals, Grover Beach has whittled down the list of 12 candidates for two medical marijuana dispensary slots to seven. And at the top of the list of seven are applicants who are political donors to a pair of council members or connected with a local lobbyist who likewise contributes money to the two politicians.

Several marijuana business owners argue that the final choices have already been made. They believe the winners for the two coveted dispensaries, which are expected to bring in millions of dollars in revenue every year, were predetermined.

In addition, several leaseholders in the marijuana zone say they have been threatened and intimidated to give up leases by people involved in the cannabis industry.

The top seven contenders include a local pot businessman who has engaged in questionable activity, including promoting his weed brand at children’s events, and a team of applicants intertwined with the League of California Cities, a powerful nonprofit that has lobbied cities on marijuana policy.

As it stands now, the two candidates slotted to get permission to open brick and mortar dispensaries in Grover Beach have each contributed $1,000 or more to Mayor John Shoals or Councilman Jeff Lee. Shoals and Lee together make up the Grover Beach council subcommittee on marijuana, about which city officials refuse to disclose details.

At a council meeting in January, Shoals asked the council to approve the cannabis council subcommittee. However, there is no documentation that the committee was previously discussed, the initiation of the committee was never agendized and the council never voted to create the committee, according to the results of a public records request.

Nevertheless, the committee was created and placed in charge of determining criteria and rules regarding marijuana and the permit application process.

The top-ranking applicants contributed significantly to Shoals and Lee, who were both up for re-election last year. Meanwhile, the dispensary applicants who were eliminated made limited or no campaign contributions to Grover Beach elected officials.

During last year’s city election campaign, Shoals and Lee received contributions from donors including dispensary owners and project applicants, as well as other members of teams vying for the two pot shop slots. Additionally, Shoals and Lee received money from Cory Black, a local political consultant and owner of the firm Public Policy Solutions.

Black’s long list of clients includes Shoals, Sheriff Ian Parkinson and the San Luis Obispo County Planning Department, among other policymakers on the Central Coast. In addition, Black’s clients include multiple marijuana business owners who are battling for a share of the local marijuana market.

During the 2016 election cycle, Black operated a campaign committee for a Grover Beach marijuana tax measure. Marijuana interests contributed more than $8,000 to Black’s committee.

In turn, Black gave personal donations and campaign funds to Shoals and Lee. After finishing the 2016 campaign flush with cash, Lee opened a committee for running for mayor in 2020 and transferred more than $3,000 into the account.

Over the last year, several marijuana business owners alleged that some local officials might attempt to rig the selection process for Grover Beach dispensaries. In addition to complaints about applicants possibly buying influence, critics have lodged complaints that a team could use political clout to sway the election process.

One of the two teams currently slotted to get to open a dispensary consists of people who are connected to the California League of Cities. That has raised questions about potential conflicts of interest.

With dispensaries prohibited in most other cities in the region, critics are saying Grover Beach is creating a near-monopoly for the two pot shops that will ultimately open in the South County city.

Initially, the Grover Beach council said it would allow up to four dispensaries. But just before formally approving the city’s new marijuana regulations, the council changed course and cut the number of dispensaries in half.

After adopting the ordinance allowing two medical marijuana dispensaries to open within its city limits, Grover Beach received a total of 12 applications to set up pot shops. City staff scored and ranked the applicants on criteria consisting of the location of the proposed dispensary, the business plan, the qualifications of the principals, the compatibility of the neighborhood, the operations and security plan and whether the dispensary is a local enterprise.

It is unclear what criteria for security plans and compatibility of the neighborhood was used in the city’s determination. City Manager Matt Bronson did not return several requests for information.

In its assessment, city staff gave four applicants scores in the 90 to 100 range, which staffers categorized as the top tier. Three applicants received scores in the 80 to 89 range, placing them in Tier 2.

Grover Beach staff scored the bottom five applicants below 80 points. Several weeks ago, the city council eliminated the bottom five applicants from contention.

The seven dispensary applicants remaining are:

Tier 1:
Milkman
The Monarch
Natural Healing Center
GDI Grover Beach Retail

Tier 2:
Trident Management Solutions
805 Beach Breaks
House of Holistics

The top-ranked dispensary belongs to Milkman, a Central Coast medical marijuana delivery service that sends drivers around in ice cream trucks to deliver “nature’s milk.” The marijuana delivery men wear T-shirts that say “Milkman.”

Thomas McAuley, the founder and owner of Milkman, donated $1,000 to Councilman Lee on Oct. 9, 2016.

Also currently in position to win a dispensary slot is a team that plans to open a pot shop called The Monarch. That team consists of six principals, three of whom have ties to the League of California Cities.

Patrick Shannon, The Monarch’s chief operating officer, is a former employee of the League of California Cities. He worked for the League from 2003 to 2008 as a legislative analyst and public affairs manager, according to his resume.

Antolin Cardenas, another principal, currently works for the League of California Cities. Cardenas has served as the public affairs regional manager for the Orange County Division of the League since 2008, according to his resume.

The local League of Cities representative David Mullinax is married to the chief executive officer of The Monarch Sunni Mullinax. David Mullinax has at times advocated for Central Coast cities to enact bans on medical marijuana dispensaries.

But, David Mullinax has not called for Grover Beach to adopt a pot shop ban, prompting critics to accuse The Monarch group of using the statewide organization’s influence to stifle potential competition.

In addition to allegedly exerting influence on local marijuana policy through the League of Cities, members of The Monarch team also made campaign contributions in Grover Beach races. Cardenas contributed $250 to Shoals last year, while Matthew Bashwiner, another partner in The Monarch, gave the Grover Beach mayor $1,000.

On top of the $1,250 Shoals received from The Monarch team, Shoals’ campaign consultant, Cory Black, received a total of $3,775 from another principal in the group. Cory Glazer, a marijuana businessman, contributed $3,775 to Black’s Yes on Grover Beach L-16, the campaign committee that backed the city cannabis tax measure.

The third-ranked dispensary proposal is a partnership between a Los Angeles real estate developer and a SLO County pot businessman, who has appeared in the news on multiple occasions.

David Separzadeh, co-owner of a proposed Grover Beach dispensary called Natural Healing Center, has been involved in several multi-million commercial real estate deals in Los Angeles, including high-rise office buildings on Wilshire Boulevard. On the Natural Healing Center project, Separzadeh is partnering with Helios Dayspring, the owner of House of Holistics, a San Luis Obispo County marijuana delivery service.

Dayspring’s bio states he is a local master cannabis grower with more than 12 years of experience in the industry who currently owns and operates 15 marijuana cultivation properties in SLO and northern Santa Barbara counties. Dayspring previously owned and operated five different brick and mortar dispensaries in the Inland Empire, according to his bio.

But, Dayspring has been involved in a variety of controversial activities. In April, he organized an Easter egg hunt in Grover Beach for children ages 1-11 that his marijuana delivery service sponsored.

“It was awesome to see so many smiling children having a blast!!!” Dayspring’s House of Holistics stated on its Facebook page.

House of Holistics’ name and green cross appeared on advertising for the children’s event and on shirts worn by staffers during the Easter egg hunt.

Councilman Lee, who had already accepted campaign contributions from marijuana interests, attended the event and commended Dayspring’s medical pot business in an interview with KSBY.

“I am here to support the community, so it is great even that the House of Holistics is putting this on and we really appreciate them being here,” Lee told KSBY.

Last December, House of Holistics sponsored a Christmas toy giveaway in which children got to meet Santa Claus and select their toys from a large batch of gifts.

In between the two medical marijuana-sponsored charity events, Dayspring was targeted in a home invasion robbery in Atascadero in which the robbers masqueraded as police officers and reportedly snatched 100 pounds of medical pot, as well as more than $100,000 in cash. Dayspring managed to break free from restraints the robbers placed him in and call 911, leading to the arrests of seven men.

Unlike the two contenders ranked ahead of them, Dayspring and Separzadeh did not make direct donations to the election campaigns of Shoals or Lee. However, their project architect, Craig Smith, of CSRA Architecture, contributed $100 to the campaigns of both Shoals and Lee.

Additionally, Dayspring has hired Cory Black for consulting work.

While Dayspring is a co-owner and executive in the Natural Healing Center project, he is simultaneously applying for House of Holistics to receive one of the two brick and mortar dispensary slots. House of Holistics is not faring so well in the pot shop race, but it is still technically in contention at number seven.

The Grover Beach council is expected to continue trimming the list on Sept. 25. The two dispensaries that are ultimately selected are expected to open next year.