By KAREN VELIE

The Grover Beach City Council voted Monday to award four marijuana dispensary licenses to a group of people who include felons, a man on the sex offender registry list and people affiliated with the League of California Cities.

In September, Grover Beach staff whittled down the list of 12 candidates for two medical marijuana dispensary slots to seven, four in tier 1 and three in tier 2. Experience with marijuana dispensaries was heavily weighted at 25 points. Applicants who scored below 80 points were not eligible.

Tier 1: 90 to 100 points

Milkman

The Monarch

Natural Healing Center

GDI Grover Beach Retail

Tier 2: 80 to 89 points

Trident Management Solutions

805 Beach Breaks

House of Holistics

In September, the council selected two applicants after reviewing the candidates’ background checks. During the vote, Councilwoman Miriam Shah voiced concerns about some of the applicants’ criminal histories.

At the time, staff determined that the Natural Healing Center and The Monarch were in first and second place. The council then voted to award those two applicants dispensary permits.

However, staff added the points incorrectly. After discovering there was actually a three-way tie between The Monarch, 805 Beach Breaks and The Milkman for second place, the council voted on Oct. 16 to allow the top four applicants to open dispensaries in Grover Beach.

Mayor John Shoals and Councilman Jeff Lee broke from staff recommendations and selected 805 Beach Breaks, number seven in points earned, as their top choice. Ed Esters, one of the three owners of 805 Beach Breaks, had founded a dispensary in San Jose and touted his experience in his application.

When asked by a reporter why he voted for an applicant who is currently on the sex offender registry for a violent crime, Shoals raised his palm at the reporter’s face and walked away.

In 1997, Esters was convicted of drugging, raping and sodomizing a female victim. He was released from prison in 2001.

The state prohibits anyone with violent or serious felonies, a felony controlled substance offense, felonies involving fraud or embezzlement, or any sanctions from local licensing authorities within the past three years from entering the industry. It is unclear if the state will issue a permit to 805 Beach Breaks because of Esters’ criminal history.

Shoals, Lee and Councilwoman Barbara Nicolls voted The Monarch as either their second or third choice.

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, currently works as the League’s public affairs regional manager for its Orange County Division; and the CEO of the Monarch, Sunni Mullinax, is married to David Mullinax, the league’s local representative on the Central Coast.

As employees of the league of cities, David Mullinax and Cardenas were tasked with lobbying cities to pass ordinances that ban dispensaries. Employee rules prohibit outside activities and employment that conflicts with league business.

“Activities and conduct away from the job must not compete with the league business or adversely affect job performance and the ability to fulfill all job responsibilities,” according to the League of California Cities employee handbook.

David Mullinax, who lobbied several local cities to enact ordinances banning cannabis dispensaries, said he is not involved in his wife’s business.

“I told my wife I cannot be part of this,” David Mullinax said. “I told her there has to be a firewall. I never advocated for her group. No league resources or time went into this.”

Because of the California law that prohibits people convicted of drug related felonies from entering the cannabis industry, David Mullinax, who was convicted of trafficking cocaine when he was 22-years-old, could have a difficult time entering the industry.

In response to questions about a possible conflict because of his close friendship with Mayor Shoals, David Mullinax said they have never discussed the application.

“John and I do not talk about this,” David Mullinax said. “John is very ethical.”

All four council members voted for Natural Healing Center as their second or third choice. Lee said he liked what owner Helios Dayspring has done for the community.

Dayspring has sponsored several children’s events where he has promoted his pot brand.

California marijuana law prohibits licensed marijuana companies from displaying advertising where more than 28.4 percent of viewers are likely under 21 years of age.

Last December, Dayspring’s dispensary sponsored a Christmas toy giveaway. In April, Dayspring organized and sponsored an Easter Egg hunt in Grover Beach for children ages 1 through 11. A banner advertising his cannabis brand hung at the event, while workers sported his marijuana brand on their T-shirts.

Dayspring is currently advertising a children’s Halloween party sponsored by his marijuana brand.

There are also questions about the amount Dayspring reported he paid to Thomas Yanaga for a residence in Atascadero in 2015. In 2008, Yanaga bought the home on 8405 San Gregorio Road in Atascadero for $688,000.

In March 2015, Yanaga was arrested for shooting and killing Marshall Savoy at a home Yanaga owned in Paso Robles.

After his arrest, Yanaga used the Atascadero home as collateral on a $1 million bail bond.

The Yanagas decided to sell their Atascadero house following the shooting, and were looking for someone who could pay a chunk of the value in cash to help prevent a wrongful death lawsuit, an affiliate of the Yanagas said.

In 2015, Dayspring reported he purchased the San Gregorio Road home for $303,000, less than half of what it was worth at the time, according to property records and a local broker.

In 2017, Dayspring was targeted in a home invasion robbery at the San Gregorio Road home. Robbers who masqueraded as police officers reportedly snatched 100 pounds of medical pot, more than $100,000 in cash and a firearm. Dayspring was able to break free from his restraints and call the police.

Thomas McAuley is the founder of the Milkman collective, the first choice of Grover Beach staff. Each of the council placed the Milkman in either first, third or fourth place.

At least one council member pointed at McAuley’s criminal history as the primary reason he was not first on their list.

Nineteen years ago, when McAuley was 19-years-old, he was arrested for possession of stolen property, a conviction that does not impact his ability to get a state permit. After McAuley served probation, the charge was reduced to a misdemeanor and later removed from his record.