Grover Beach pot shop owners quickly sold permits


As part of the green rush stampede, entrepreneurs battled for a limited number of Grover Beach marijuana retail shop permits as the city touted its ability to scrutinize applicants.

But shortly after the city awarded four retail permits, winners began selling their permits without public oversight or disclosure. While the price of the two business deals were not disclosed, in San Diego County sales of permitted retail shops have garnered between $3 million and $17 million.

With a dozen applicants vying for four permits, the Grover Beach City Council espoused the importance of a thorough vetting process. Then in late 2017, the council voted to award the coveted permits to a group of people who included felons, a man on the sex offender registry list and people affiliated with the League of California Cities.

At that time, council members argued against allowing the permit winners – The Monarch, 805 Beach Breaks, Natural Healing Center, and Milkman – to sell their permits. However, a clause in the ordinance permits the city manager to allow the sale of marijuana pot shops and the transfer of permits.

The Monarch was the first to sell, less than five months after the council voted to award the permit, and before they even secured a building.

The Monarch is a pot business consisting 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; Antolin Cardenas, another principal, works in public affairs for the league; and the CEO of the Monarch, Sunni Mullinax, is married to David Mullinax, the league’s local representative on the Central Coast and a close personal friend of former Grover Beach mayor John Shoals.

In his defense, David Mullinax told reporters he was not involved in his wife’s business and that he and Shoals did not discuss The Monarch’s retail pot permit application.

Shortly after Shoals voted to award The Monarch one of the permits, the permit approval was quietly transferred to DRES, a company affiliated with Ash Israni, who is also involved in the Grover Beach Lodge project, according to the Secretary of State website.

Grover Beach City Manager Matt Bronson said he approved the permit transfer, and that the new business must meet city code requirements and their owners undergo background checks. In addition, Sunni Mullinax still has an ownership interest in the business, Bronson said.

With the final construction of Israni’s building underway, the city’s newest pot shop, Urbn Leaf, is currently hiring employees and slated to open soon.

Last month, Harvest Health & Recreation announced it had purchased 805 Beach Breaks, another favorite of Shoals and then councilman Jeff Lee.

In May 2018, 805 Beach Breaks opened at 1053 Highland Way.

Ed Esters, one of the original co-owners, has a controversial past and is presently listed on California’s sex offender registry. Esters was convicted in 1997 of drugging, raping and sodomizing a female victim. He was released from prison in 2001.

In March, deputies raided 805 Beach Breaks after discovering co-owner Brian Touey was illegally growing cannabis in Santa Barbara County. Touey was charged with felony perjury and two misdemeanor counts of illegal possession of marijuana for sale and illegal cultivation.

In a settlement with prosecutors, Touey agreed to give up his cultivation license and to pay $32,000, and the county agreed to drop all charges.