Corruption allegations continue to dog local cannabis industry

SLO County Supervisor Adam Hill

By KAREN VELIE

Battles over control of the multi-million dollar Central Coast marijuana industry have led to a barrage of ethical and criminal allegations.

Some elected officials and government employees have been accused of taking bribes and engaging in inappropriately close relationships with marijuana business owners and consultants. Local marijuana kingpins, several elected officials, and a political consultant are at the center of the controversy.

Shortly after Californians voted for the legalization of recreational marijuana, San Luis Obispo County Supervisor Adam Hill and consultant Cory Black began courting marijuana growers with promises of success in exchange for money, multiple growers said.

In fall 2016, a group of local marijuana farm owners said that Supervisor Hill had asked them to place money into envelopes he brought to a grower’s meeting if they wanted his support.

Following the meeting, on Sept. 26, 2016, attendee Reggie Collins sent out an email asking cannabis farmers to each give Hill $1,000 for his support.

“I am calling a special meeting to donate $ and help to his campaign,” Collins wrote. “My farm donated $1,000 recently. He is prepared to speak and attend our meeting. This is a mandatory donation for attendees.”

The next day, Collins sent out another email explaining his plan.

“My plan is to get the people who will pay to play,” Collins wrote.

While Collins confirmed that he had donated to Hill’s campaign, Hill did not report a donation from Collins on his financial disclosure fillings. Hill did not respond to questions about the email or the alleged donation.

Cory Black at a county meeting listening to discussions on marijuana regulations

Black’s political consulting firm, Public Policy Solutions, contributed significantly to Hill’s election. Meanwhile, Hill argued for marijuana regulations that favored Black’s clients. Black did not return requests for comment.

In Sept. 2016, the board of supervisors directed SLO County planning staff to construct an ordinance regulating the local marijuana industry. However, staffers repeatedly failed to follow board direction in favor of proposed regulations that appeared to support the larger growers affiliated with Black.

At a SLO County Board of Supervisors meeting in Oct. 2017, Christopher Matthews said staff’s draft ordinance disadvantaged the smaller growers. He questioned whether staff was biased because a political consultant who works for Hill, Supervisor Bruce Gibson, Sheriff Ian Parkinson and the planning department is also paid by several of the large marijuana businesses.

“The number one reason is the involvement of Cory Black and Public Policy Solutions in nearly every single aspect of the draft ordinance,” Matthews said. “How is someone who claims on their own website the county planning department as a client, allowed to represent clients applying for licenses under your own urgency ordinance? Why did the staff never raise the question that this is more than a conflict of interest, but rather an incubator for collusion and corruption?

“Can the county planning department be trusted to write a fair and impartial ordinance when they are clearly still working with Cory Black and Public Policy Solutions? Clearly, the answer is no.”

And a group of former grow supervisors at pot farms owned by marijuana mogul Helios Dayspring, accuse their former boss of paying Supervisor Hill and Black to promote rules and approvals that benefit Dayspring. In addition, the former workers said planning department inspectors have approved Dayspring’s sites without actually inspecting the grows.

Rather than respond to questions about the allegations, Dayspring hung up on a reporter.

In Grover Beach, multiple members of the marijuana industry have alleged corruption in the Grover Beach City Council’s marijuana store approval process.

In 2017, amid allegations of threats and backroom deals, the Grover Beach City Council awarded three marijuana shop permits to applicants who were political contributors to Mayor John Shoals and Councilman Jeff Lee. All three have connections to Black.

Shoals and Lee veered from staff’s recommendations, selecting Dayspring’s Natural Healing Center, The Monarch and 805 Beach Breaks as their top three choices.

Mayor John Shoals and Councilman Jeff Lee

Based on a point system developed by a Grover Beach subcommittee on marijuana, staff weighted specific attributes of each candidate and then ranked them accordingly. Shoals and Lee together made up the subcommittee on marijuana, about which city officials refused to disclose details.

Even though city staff ranked 805 Beach Breaks in seventh place for points earned, Shoals and Lee touted the applicant as a great choice for a city cannabis shop. One of the founders of 805 Beach Breaks, Ed Esters, had been convicted in 1997 of drugging, raping and sodomizing a female victim. When asked about the conviction, Shoals held his hand up in a reporter’s face before walking away.

A few months before the vote, marijuana business advocate Claire Mamakos said she was at a winery event when one of founders of 805 Beach Breaks said she had already been promised one of the Grover Beach marijuana shop permits, Mamakos said.

Before Shoals and Lee selected Dayspring’s Natural Healing Center as their top choice, Dayspring had been involved in a variety of controversial child-related activities. In April 2017, Dayspring sponsored an Easter egg hunt in Grover Beach for children ages 1-11 where his marijuana delivery service was advertised on banners, hats and T-shirts.

Councilman Lee attended the event and commended Dayspring’s medical pot business for its involvement in the community.

Several of Dayspring’s former grow supervisors, said that Dayspring’s involvement includes paying public officials for votes and support.

Two of the former grow supervisors, who have asked to remain unnamed because of fear of retaliation, said Supervisor Adam Hill and Black introduced Dayspring to Grover Beach Council members.

Helios Dayspring, rapper Xzibit and Grover Beach mayor John Shoals outside a building Dayspring planned to house one of his marijuana businesses

Another former grow supervisor, Tony Brocking, said Dayspring boasted of paying public officials.

“Dayspring told me he paid the mayor $100,000,” Brocking said. “He was guaranteed a spot.”

Councilman Lee did not respond to requests for comment. Mayor Shoals denied the allegations.

“I categorically deny these allegations,” Shoals said.

Several months ago, a friend of two of Dayspring’s partners in several of his cannabis businesses, Rick Holiday, repeated the allegations of a six-figure bribe.

“What if I were to tell you that a certain Grover Beach council member took a very large (6 figure) bribe for a favorable vote on one of the medical marijuana dispensaries,” Holiday wrote on a reporter’s Facebook page. “How do I know this for a fact you ask? Because the person who gave the money to the council person personally told me almost 6 months before the vote that they had paid the council person and we’re guaranteed ‘a spot’ in Grover Beach to sell Cannabis!”

Currently, Supervisor Hill is promoting select city council and mayor candidates in the cities of San Luis Obispo, Grover Beach and Arroyo Grande. At the same time, the San Luis Obispo City Council is deciding who can operate cannabis shops in their city, with a point based system similar to what was approved in Grover Beach.

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