SLO County cannabis company workers to protest city’s ‘draconian decision’ to pull permit
Employees of San Luis Obispo County cannabis business Natural Healing Center are calling on the San Luis Obispo City Council to reverse staff’s decision to revoke the company’s permit — blocking its ability to open up shop in town.
The workers plan to hold a rally at 5 p.m. Tuesday outside City Hall.
The protest comes after the city determined Natural Healing Center’s founder submitted false information regarding illegal activity to San Luis Obispo officials in the permitting application.
In a news release, Natural Health Center (NHC) said the city is “making the wrong decision,” adding that that the company has “gone to incredible lengths and sacrifice to create a one-of-a-kind environmentally sustainable operation for our employees, customers, the city and residents of San Luis Obispo.”
“This draconian decision by the city to shut us down is a devastating financial blow to our company,” NHC said in the release. “This cannot be overstated.”
In response, the city of San Luis Obispo said in a statement: “Like many members of our community, we were disappointed to learn that (former majority owner) Mr. Dayspring’s criminal actions may have resulted in Natural Healing Center providing false or misleading information to the city in its permit application.”
“While the business has not yet opened a storefront in San Luis Obispo city limits, we cannot ignore evidence of admitted criminal conduct that suggests the city was induced to issue a storefront permit under false pretenses, irrespective of current ownership,” the city added.
“It’s important that San Luis Obispo remain a fair and level playing field for businesses,” San Luis Obispo officials continued. “We will continue to support a safe, legal cannabis industry here and are following the city’s process to do so.”
SLO terminates commercial cannabis permit
San Luis Obispo officials said they terminated NHC’s commercial cannabis operator permit on Oct. 6 because “an applicant submitted false or misleading information about criminal misconduct to city officials in the business’s permit application.”
The company’s founder and previous majority owner, Helios Dayspring, pleaded guilty to one count each of bribery and filing a false tax return, according to a plea agreement filed in federal court and unsealed in July.
Dayspring allegedly paid the late District 3 supervisor Adam Hill $32,000 in cash and money orders in exchange for influence over other government officials, confidential information, and beneficial votes on issues related to his farms, the U.S. Department of Justice said at the time.
The company’s business interests have been transferred to Dayspring’s girlfriend, Valnette Garcia, who’s now the CEO.
In an Oct. 6 news release citing the company’s permit revocation, the city cited an application process in which Dayspring told San Luis Obispo officials that he had “not ever spent money for illegal purposes, falsified any documents or was involved in tax fraud or evasion of taxes.”
“Natural Healing Center would never have received the permit had we known then what we know now,” deputy city manager Greg Hermann said in the release. “We are committed to a fair and transparent process that provides a level playing field for legal commercial cannabis companies here, but operators who participate in illegal activities are not welcome in San Luis Obispo.”
Joe Armendariz, NHC’s government affairs manager, said Monday in a news release that Garcia is “an instrumental part of NHCs success.”
”Val is responsible for NHCs forward movement and for building a one-of-a-kind team of Central Coast locals, and what an inspirational story she has too,” Armendariz said. “She comes from a low-income minority family and yet through hard work, sacrifice and perseverance she has helped bring NHC to where it is today.”
An NHC dispensary has been under construction off and on for several months at 2640 Broad St. in San Luis Obispo after it was approved for operator permitting in March 2019.
Two other brick-and-mortar cannabis businesses are currently operating in San Luis Obispo. City ordinance permits a maximum of three retail storefronts in the city at one time, and NHC had up until October held one of those slots.
NHC has permitted retail stores in Grover Beach, its original shop location, and in Morro Bay.
The company has about 100 employees, Armendariz said.
Did city wrongfully revoke Natural Healing Company permit?
Through NHC’s lawyers from the Santa Barbara firm Reetz, Fox & Bartlett, company officials wrote the city on Oct. 14 — contending that San Luis Obispo officials wrongfully revoked a 2021 permit based on the former owner’s actions in 2019 without basis.
The letter notes that NHC, filing as a company, was the applicant for the permit in 2019 and not Dayspring, who officials said transferred his ownership stake in October 2020 and no longer has a position with the company.
“NHC is not Helios Dayspring,” the letter noted. “Mr. Dayspring is merely a former member of NHC who no longer holds any position with the company or any ownership interest in it.”
“There are millions of dollars at stake here,” the letter adds, “and reading between the lines to establish some subjective measure of intent and punish my client for the sins of a former owner flies in the face of the city’s actual ordinances, as well as the legal rights and reasonable expectations of my client.”
NHC’s letter additionally notes that Dayspring disclosed past conduct, including illegal activity, to the San Luis Obispo Police Department before the NHC permit was granted.
“The city was aware that Mr. Dayspring admitted that he spent money for illegal purposes, used or possessed illegal drugs, had been placed on court probation, that police had been called to his home, that he had in the past committed a battery, and that he was then involved in litigation involving fraud,” the letter notes.
The law firm notes it was hired for the “purpose of litigating” the city’s “unilateral and wrongful efforts” to terminate NHC.
San Luis Obispo officials didn’t directly respond Monday to Tribune requests for comment on the claims by NHC in the attorney letter, such as the statement the city was “aware that Mr. Dayspring admitted that he spent money for illegal purposes.”
In addition to staging a protest Tuesday afternoon, NHC workers plan to comment at the San Luis Obispo City Council meeting that evening during the public comment period.
The council meeting begins at 6 p.m. and will be livestreamed at https://slocity-org.zoom.us/j/82161657113?pwd=VWR3Ry9CNkhteHAxUWhJRllPL3VGQT09.
This story was originally published October 18, 2021 at 2:35 PM.
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