SLO cannabis regulation changes box out Dayspring 

As the city of San Luis Obispo gears up to add a third cannabis dispensary in town, it recently passed a suite of revisions to its rules for the industry—including one that directly impacts imprisoned former cannabis kingpin Helios Dayspring.

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• File Photo By Peter Johnson
• VACANT Convicted cannabis businessman Helios Dayspring will not be allowed to be listed as a property owner on any future cannabis applications that look to utilize his unused dispensary building on Broad Street.

Revised parameters for hopeful cannabis applicants adopted by the SLO City Council on May 16 now require that any property owner who's leasing a building to a cannabis applicant pass the same criminal background check as the applicants themselves.

In Dayspring's case, that means he cannot be listed as a property owner or landlord for any application that looks to start a cannabis business out of the dispensary he built and owns at 2640 Broad St., which is currently vacant.

SLO city officials told New Times that an internal cannabis steering committee combed through every aspect of the city's cannabis ordinance and sought to tighten up the standards for all entities involved in a local operation.

"We want to be really clear about the standard of expectation, and we want to be clear that we want anybody who has influence in our industry meeting those high standards," SLO City Attorney Christine Dietrick said. "The connection between landlord and operators is significant, and we just want to be clear that we expect everyone who's touching this industry in our community to meet the same high standard."

Dietrick noted that Dayspring's criminal misconduct in SLO County—which included bribery and tax evasion—damaged public trust in the city cannabis process.

His former company, Natural Healing Center, received one of the city's first three retail permits in 2019. It was revoked in 2021 after he entered a plea deal with federal prosecutors that landed him a 22-month prison sentence. Natural Healing Center later sued the city over the permit revocation.

"The experience we had firsthand showed us that it's an incredible drain on staff time and resources ... and it proved undermining of public confidence to have those kinds of willful violations," Dietrick said.

The city's new regulatory language didn't sit well with Dayspring. He left a voicemail for the SLO City Council before the May 16 meeting claiming that the new rules would make it hard to sell his property and "move on with my life."

Dayspring is currently serving out the remainder of his prison sentence in community confinement overseen by the Long Beach Residential Reentry Management Office. He spent the previous seven months at a satellite prison camp in Tucson, Arizona.

"The intent of the ordinance amendment is to ensure that anyone convicted of the listed crimes has no involvement or business interest with an approved applicant. But what you're doing ... is essentially denying the ability for anyone to even apply [for a cannabis permit] on the building I own," Dayspring said in the voicemail. "No one purchases a piece of real estate before they're approved to operate.

"To deny another operator the chance to operate in this one-of-a-kind facility, and to deny the residents of SLO a chance to purchase their cannabis in this type of environment, does not make any business sense to me."

In response, Dietrick told New Times that the city does not concern itself with private real estate dynamics.

"The city's role is as a regulator, not a facilitator of private real estate transactions," she said, adding: "It is a shame that his criminal misconduct derailed that operation."

Alex Fuchs, cannabis business manager for SLO city, told New Times that a prospective cannabis applicant could in theory apply for a dispensary permit at 2640 Broad St.—the property would just have to change hands first.

"That property is still within the cannabis overlay zone. Any applicant could list that property location as a location for retail business. But as of now, Mr. Dayspring would have to not be listed as a property owner of record," Fuchs said.

As of press time, Dayspring's property was not actively listed for sale. When it hit the market in 2022, it was listed for as much as $9 million, and most recently was advertised for $6.8 million, according to real estate websites.

Fuchs said the city intends to launch the new application window for a third dispensary permit before the end of September. Interested applicants will have to enter into a competitive process, where they'll be ranked and judged on an objective scoring criterion.

"This is special because we had filled the three permits. ... This is our second go at it," Fuchs said. "We have an opportunity to do it again."