News » Cannabis Corner

Dayspring claims he bankrolled other SLO cannabis dispensaries; companies and city push back



As convicted local cannabis businessman Helios Dayspring gets ready to spend nearly two years behind bars for bribery and tax evasion, he's still attempting to show in civil court the extent of his power and influence in the San Luis Obispo pot industry.

In recent filings made as part of the litigation between his former company, Natural Healing Center, and the city of SLO, Dayspring alleged that he personally helped bankroll the city's other two cannabis dispensaries—signing loan agreements with Megan's Organic Market (MOM) for $800,000, and SLOCal Roots for $1 million in early 2019.

KINGPIN? In a series of court filings, convicted local cannabis businessman Helios Dayspring claims he gave nearly $2 million in loans to other city cannabis dispensaries, funds that he alleges they failed to disclose to the city. - SCREENSHOT COURTESY OF SLO COUNTY
  • Screenshot Courtesy Of SLO County
  • KINGPIN? In a series of court filings, convicted local cannabis businessman Helios Dayspring claims he gave nearly $2 million in loans to other city cannabis dispensaries, funds that he alleges they failed to disclose to the city.

"I, Helios Dayspring, was the primary financer [sic] for all three successful cannabis applications," he asserted in a court declaration.

Dayspring claimed he was hired in 2019 to oversee and manage the MOM and SLOCal Roots dispensaries, that he held ownership stakes, and that the companies worked collaboratively to cement their positions in the city industry.

He attached copies of signed promissory notes and management agreements between the parties to try to back his claims, and he alleged that the other dispensaries failed to disclose their ties to him to the city or the public, as SLO's ordinance requires.

The filings—submitted in SLO County Superior Court in June and July—make the argument that while the city did not punish MOM and SLOCal Roots for allegedly concealing information, it revoked Natural Healing Center's dispensary permit last October as a consequence for his concealing criminal conduct.

Meanwhile, the city, MOM, and SLOCal Roots pushed back strongly against that narrative in comments to New Times.

According to the recent court filings, MOM and SLOCal Roots inked their loan agreements with Dayspring in February and March 2019, respectively—one to two months after the application window closed in SLO city for prospective cannabis dispensaries.

SLO city cannabis code required all applicants to disclose their "financial capacity" to the city in their applications, including "bank balances, available loans, and other sources of funding the enterprise."

MOM's original application for a dispensary to the city stated that all of its financial capital "comes directly from our ownership team"—which did not include Dayspring, according to the application.

A copy of the February 2019 agreement between MOM and Dayspring submitted into court—signed by Dayspring, Megan Souza, Levi Seligman, and Keith Sweeney—read that MOM would repay Dayspring $600,000 over five years at 7 percent interest.

That loan figure bumped up to $800,000 in July 2020, on the eve of the dispensary's opening, when MOM had already received about a half million dollars, according to a copy of the document. The agreement said that Dayspring could convert his loan into 46 percent ownership interest.

In an Aug. 3 statement to New Times from MOM's attorney Dustin Tardiff, Tardiff claimed that MOM's "relationship with Helios Dayspring was nothing more than a loan of money, and he was never anything other than a creditor."

Tardiff continued that "at no point did Mr. Dayspring have any management control or ownership of MOM" and "as soon as MOM SLO became aware that Mr. Dayspring's values and professional conduct did not align, they immediately cut ties with Mr. Dayspring."

In a phone interview with SLOCal Roots owner Austen Connella, Connella said that his company did sign a loan agreement with Dayspring in March 2019, but that the amount of capital it ended up receiving totaled "five figures, not seven," and that the agreement was ultimately rescinded in 2021 when Dayspring's criminal activity came to light.

"He never put up the money. He was never an owner. He's the only one claiming he converted that note [into ownership]," Connella said.

Connella added that he only entered into the agreement with Dayspring because of Dayspring's leverage in the SLO real estate market at the time.

"He had an agreement with the property owners to have a [dispensary] application [at the SLOCal Roots site]," Connella said. "If I had an application there, he needed to be involved. He wanted an option if he didn't win [a permit], to come invest in my business."

A copy of the agreement between SLOCal Roots and Dayspring in court states that the company would repay Dayspring and his two partners $1 million over five years, or Dayspring could convert the loan into a 74 percent ownership stake in SLOCal Roots.

Connella said that the company has since repaid the "five figure" money that Dayspring and his partners loaned it.

Both MOM and SLOCal Roots also denied that Dayspring ever managed their day-to-day dispensary operations, despite signing agreements with Dayspring in 2019 to provide those services.

The companies also added that they appropriately disclosed their dealings with Dayspring to the city.

And SLO City Attorney Christine Dietrick agrees. She told New Times by email that the city began investigating Dayspring's relationship to the other cannabis dispensaries in August 2021, following his guilty plea with the U.S. Department of Justice.

An email from Dietrick dated Aug. 23, 2021—sent to all three companies, including SLOCal Roots and MOM—asked them five questions, starting with: "Were financial interests in or to the permitted business ... fully disclosed to the city during the application, background, or permitting process?"

Dietrick said the companies then came forward with information showing the "fairly complicated financial relationships between and among various individuals and applicants," including Dayspring, "as well as explanations as to how the permit holders assert those relationships complied with the city's municipal code and application requirements."

She continued that the companies "represented under penalty of perjury that those financial relationships did not result in failure to disclose information that was required to be disclosed under the city's municipal code."

Meanwhile, a July 7 ruling in Natural Healing Center (NHC)'s lawsuit against the city went in the city's favor. A judge dismissed the company's first complaint and refused to consider Dayspring's declaration because it was not made under penalty of perjury.

Natural Healing Center has since filed a second amended complaint.

"I would note that it is interesting that Mr. Dayspring continues to actively participate in NHC's litigation," Dietrick said, "while both NHC and Dayspring vehemently assert he has no continuing interests in or control of NHC, other than as the [dispensary] building owner."

Connella, with SLOCal Roots, said he wants nothing to do with the former cannabis magnate and said that he rejected Dayspring's demand for SLOCal Roots to pay him a settlement for their rescinded loan agreement.

"I said, 'No you're a criminal. You don't deserve any of this,'" Connella recounted. "'You've done nothing but put our industry in a bad place.'" Δ

Comments (2)

Showing 1-2 of 2

Add a comment

Add a comment