By JOSH FRIEDMAN
Following an internal investigation, San Luis Obispo County administrators concluded marijuana mogul Helios Dayspring’s bribes to former Supervisor Adam Hill may have only affected two board decisions and that taking corrective action on the votes would now be “moot.”
On Tuesday, the county vowed sheriff’s officials would scrutinize cannabis businessmen assuming ownership of Dayspring’s projects. But, officials announced no corrective action against those projects, other than plans to deny business licenses to Dayspring, himself. Additionally, the county’s announcement overlooks how Hill’s efforts on the board helped derail Dayspring’s competitors, as explained in the marijuana mogul’s plea agreement with federal prosecutors.
Prior to Tuesday’s announcement, Dayspring had three cannabis grows approved by SLO County this year, though one is being appealed by neighbors. Dayspring also maintains concealed ownership stakes in many other grows, something not reflected in official records.
Between fall of 2016 and Nov. 2019, Dayspring paid Hill multiple bribes in cash and money orders totaling $32,000, according to the plea agreement. Federal prosecutors charged Dayspring with one count of bribery and one count of filing a false tax return on July 28, 2021.
Dayspring agreed to plead guilty to both felony offenses, pay $3.4 million in restitution to the IRS and cooperate in the government’s ongoing corruption investigation. On Aug. 25, Dayspring surrendered to federal authorities in an arraignment hearing, and was then released shortly afterwards on $50,000 bail.
The county became aware on July 28, 2021 of the federal charges against Dayspring, and the plea agreement he made with prosecutors on July 28, according to Tuesday’s press release. Even though federal agents raided Hill’s county government center office in March 2020, the news release makes no mention of prior knowledge of the FBI investigation into Hill and Dayspring.
“We are not privy to the status or extent of the FBI investigation but in instances where wrongdoing has been alleged, we have done and will do full investigations of our own as well,” according to the press release. “The county of San Luis Obispo has cooperated fully with the FBI and will continue to do so.”
After learning in late July of the “profoundly disappointing news,” administrators put a hold on all of Dayspring’s cannabis permits and began a review of all marijuana legislation and land use permits that could be called into question because of Hill’s actions or votes. The process included reviewing each legislative action of the board of supervisors related to cannabis, including a review of the minutes and the final vote.
Additionally, the county compiled each local cannabis project Dayspring was involved in to determine whether Hill participated in any approvals for those projects.
Upon completing the review, county officials found two decisions may have been impacted by the bribes Dayspring admitted he gave to Hill. Both decisions passed on a 3-2 vote, with Hill voting in favor of the respective motions.
The first vote occurred on Dec. 17, 2019 when Supervisors voted to place an extension of an enforcement abeyance resolution on the Jan. 14, 2020 agenda. Then on Jan. 14, 2020, the board voted to extend the abeyance until June 2020.
The abeyance, which placed a temporary hold on enforcement of cannabis regulations on certain operators registered with the county, served as a key tool used by Dayspring to gain a dominant position in the local marijuana market.
As the state of California was crafting its approach to retail marijuana policy and as county supervisors argued over cannabis regulations, growers worried they would be forced to stop cultivating their crops as they waited for their applications to be processed. At that time, several farmers asked for a temporary abeyance ordinance that would allow them to grow without a permit.
Shortly afterwards, Hill introduced Dayspring to consultant Cory Black, and they discussed plans for a pay-to-play scheme, Sean Despain, an employee of Dayspring, told CalCoastNews. In addition to agreeing to take money to promote Dayspring’s business interests, Hill would act to thwart Dayspring’s competitors’ plans, Despain said.
In Nov. 2017, after already receiving bribes from Dayspring, Hill voted to enact a 13-month abeyance ordinance, which allowed marijuana growers who had previously registered with the county to continue growing with a county permit. Then in 2018, Dayspring gave Hill about $5,000 in cash and marijuana. He pushed Hill and other county supervisors to vote to continue the abeyance after it was set to expire in Jan. 2019.
“It’s really important u guys extend the time frame for submission and don’t allow other people in yet.” Dayspring texted Hill on Dec. 10, 2018. “This affects all the properties that I just got investment into every one of them. If I am not deemed complete and get accepted I don’t get ownership in the land.”
The board then voted 5-0 to extend the abeyance ordinance with Hill seconding the motion.
In late 2019, Dayspring asked for another extension of the abeyance ordinance which was set to expire. At a Dec. 2019 meeting, Hill moved to place the proposed extension on a future agenda.
On Jan. 14, 2020, the board voted 3-2 to approve another extension of the abeyance ordinance, with a twist. This time county staff included language that required growers to have paid their monthly taxes by Dec. 31, 2019 — before the December taxes were due. That allowed Dayspring to grow during the 2020 season while giving a crushing financial blow to many of his competitors who could not make the advance payments.
County officials did not acknowledge how the Jan. 14, 2020 vote gave Dayspring a competitive edge over his competitors.
Rather, officials said the abeyance extension allowed some of the 141 original cannabis operators who registered with the county to continue operating while they were working their way through the land use permit. The abeyance expired in 2020, “making any needed corrective action on this matter moot,” the county stated.
In addition to Hill’s Dec. 2019 and Jan. 2020 votes on the abeyance extension, other decisions by the board that “arguably could be considered beneficial to Mr. Dayspring” either did not pass or passed with no one dissenting, the county says. Hill, who died of an apparent suicide in Aug. 2020, was deceased when at least one of those votes occurred.
Sheriff’s staff will review any new owners and carefully evaluate any individuals who have a history of doing business with Dayspring, according to county officials.
“As far as current cannabis projects involving Mr. Dayspring in the county, all business licenses which include Mr. Dayspring as an identified owner of the business have been denied by the sheriff’s office,” according to the press release.
However, while the sheriff’s office conducts background checks, it currently does not approve business licenses.
In the past, Dayspring has often been the primary owner of a project, even though formal paperwork does not indicate so. Dayspring has a long history of using limited liability companies in a scheme to conceal ownership stakes and underreport his income from cannabis sales. Dayspring has purchased real estate in employees’ names and later transferred the properties over to one of his companies, property records show.
Recently, Santa Barbara County ordered Dayspring to pay a $40,000 settlement for altering a stream and polluting water. Likewise, Santa Barbara County is working to terminate Dayspring’s ability to farm on his six pot farm in its jurisdiction.
Elsewhere in SLO County, the cities of Grover Beach, Morro Bay and San Luis Obispo, where Dayspring opened or is in the process of opening dispensaries, have yet to announce whether they will take action against Dayspring’s business interests.