The City of San Luis Obispo announced Wednesday that it has terminated Natural Healing Center's commercial cannabis operator permit and the business will not be allowed to open a cannabis storefront in the city.
Officials say the applicant, Helios Dayspring, submitted false or misleading information about criminal misconduct to city officials in the business's permit application.
In July, Dayspring was charged in federal court with bribery and failing to report millions of dollars in income to the IRS. He reportedly admitted to bribing late San Luis Obispo County District 3 Supervisor Adam Hill and attempting to bribe former Grover Beach Mayor John Shoals.
Upon learning of the charges, San Luis Obispo city officials say they conducted a review of Natural Healing Center's application to open up a cannabis retail shop in the city.
As part of the application process, Dayspring reportedly told city officials that he never spent money for illegal purposes, falsified any documents, or was involved in tax fraud or evasion.
Natural Healing Center was one of three cannabis businesses initially issued a permit to operate a storefront in San Luis Obispo but it has not yet opened.
The city's reasoning behind terminating Natural Healing Center's permit is outlined in a letter the city sent to the business on Wednesday.
"Natural Healing Center would never have received the permit had we known then what we know now," said Deputy City Manager Greg Hermann in a press 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."
In August, Dayspring surrendered to federal authorities at his arraignment in Los Angeles and was released on $50,000 bond.
In exchange for pleading guilty to the charges against him, Dayspring reportedly agreed to pay $3.4 million and cooperate in an ongoing government investigation. He faces a maximum sentence of 13 years in federal prison.
Since the charges against him were announced, another business operated by Dayspring, 805 Agricultural Holdings, was fined $40,000 by Santa Barbara County for Fish and Game code violations at a cannabis grow in that county.
In addition, San Luis Obispo County officials said a review of cannabis legislation and land use permits found two questionable decisions that could be linked to the bribery allegation involving Supervisor Hill.
Officials say one of those was a vote that ultimately benefited Dayspring by extending a temporary hold on enforcement of cannabis regulations for certain growers.
According to the Department of Justice, the investigation into Dayspring's dealings is part of an ongoing public corruption investigation in San Luis Obispo County.
In March 2020, the FBI served a search warrant at the San Luis Obispo County Government Center.
When asked about the investigation at the time, Supervisor Hill said he could not comment except to say "we are cooperating fully with their inquiries."
Hill took his own life in August 2020.
Later that same month, Natural Healing Center announced Dayspring was stepping down as CEO "to devote his energy and attention to other personal avenues of opportunity."
Natural Healing Center currently operates shops in Grover Beach, Morro Bay, and Lemoore and has plans to open another in Turlock.