Morro Bay wins lawsuit alleging a rigged cannabis permit process


Amid widespread allegations of corruption in the cannabis industry, a San Luis Obispo County judge ruled in favor of Morro Bay and its retail cannabis application process.

In its lawsuit, Connected Morro Bay Blvd. argued the city manipulated results and ran afoul of its own laws to reward retail permits to a pair of favored pot businesses — Helios Dayspring’s Natural Healing Center and Perfect Union. But Judge Ginger Garrett ruled on March 22 that city officials had discretion when they passed over a consultant’s top choice in favor of the fifth and sixth ranked businesses.

Connected Morro Bay Blvd. was ranked first with a score of 1,646 out of 1,650. Natural Healing Center scored 1,382.5 while Perfect Union scored 1,326.

Following the application session, Morro Bay City Manager Scott Collins made the final decision, and in the process, essentially reversed the recommendation list, with Dayspring’s company moving from fifth to first.

“They used their discretion to create rules and clear a path that favored those two candidates,” said Jeff Augustini, Connected Morro Bay Blvd.’s Irvine based attorney.

In Oct. 2018, Dayspring and Natural Healing Center hosted a fundraiser for eight local politicians, including three current members of the SLO City Council, and now-Morro Bay Mayor John Headding and now-Councilwoman Dawn Addis.

After CalCoastNews reported that eight council candidates who benefited from an Oct. 28 fundraiser hosted by Dayspring had not disclosed Dayspring’ donations, Headding and Addis filed amended financial disclosure forms which report Dayspring’s non-monetary donations.

The city selected Natural Healing Center and Perfect Union in Aug. 2019.

It was yet another victory for Dayspring, who has garnered coveted pot shop permits in Grover Beach, San Luis Obispo, Morro Bay and Lemoore. The FBI raided Dayspring’s home outside SLO a year ago.

Connected Morro Bay Blvd. is reviewing the court’s decision as they decide if they will file an appeal, Augustini said.

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