Corruption has always been one of the feared consequences of legalized marijuana and is happening up and down the West Coast. Now it has manifested itself in Hanford. The problem is fueled by the competitive environment created by the limited and coveted number of pot dispensary permits allowed by each city.
At Hanford City Council’s September 17 meeting, Caliva was awarded one of only two available storefront pot dispensary permits. This has resulted in a fierce competition between the remaining six applicants. Two of those applicants came to the September 17 meeting to protest what they perceived as the city’s preferential treatment of Caliva.
Caliva went through Hanford’s permitting process in 2017 and obtained a permit to open a pot distribution center in the industrial park. Because the company had already gone through Phase One–background checks–of the process, they completed the pot dispensary process faster than the other companies.
Now it has surfaced that two of the remaining cannabis companies vying for the last dispensary permit have bribed property owner Dennis Fausone to kick out his tenants, sell his building, or let the city reclassify the business as a non youth facility. The building at 410 E 7th Avenue is currently occupied by WestCare, a nonprofit youth facility that is a substance abuse treatment center for adolescents 12 – 17 years old. Because it is a youth facility the building is part of the sensitive buffer zone.
According to Hanford Ordinance 19-06, pot dispensaries cannot be within 600 feet of a sensitive business such as one that involves youth.
In a letter written in August from Community Development Director Darlene Mata to each city council member concerning WestCare she confirms that, “As part of our cannabis application process we reviewed the properties within 600 feet of proposed dispensaries. There are two dispensary applications proposed within 600 feet of the WestCare facility.”
It’s unknown if the same companies that complained about Caliva were the same two that tried to bribe Fausone. The identity of the six companies vying for the last permit is not public information, and supposedly not even the city council members know who they are.
It is known that one of the cannabis companies that tried to persuade Fausone to kick out his tenants is in escrow to buy the former Golden Value building at 407 E 7th Street across the street from WestCare. The building was on the market for $375,000 and has 8700sf. A source informed The Voice that escrow should close at the end of October or beginning of November.
The other cannabis company that attempted to give Fausone monetary inducements identified themselves as within the 600 feet sensitive zone.
Happening concurrently as the attempted bribes, the City of Hanford is in a fight with Fausone over the designation of WestCare as a youth facility. A letter from the law firm of Griswold LaSalle states, “Although WestCare’s program may have recreational and social aspects, the program’s primary purpose is clearly substance abuse treatment, and therefore, it is not “youth facility” for purposes of state law of or the HMC (Hanford Municipal Code.)”
In a previous email to Fausone received from a city attorney the lawyer stated that the city considers WestCare a “doctor’s office.” According to Fausone there are no doctors working at WestCare.
Out of frustration, Fausone went to Hanford’s Community Development Department as a regular citizen and filled out a Zoning Verification Request on his property and paid the $135 fee. On the verification letter it states, “Current Use of Property – Offices and Youth Center.”
On August 14 Fausone delivered a letter to the Hanford City Council and Mata insisting that his tenant, WestCare, is in fact a youth facility and should be included in the sensitive use buffer zone.
“As the owner of the property, I have a duty of care to my tenants. WestCare California is an amazing tenant, and their work truly changes lives. I am concerned that though this youth center has been located on my property for 11 years, if its use as such was not properly identified, that cannabis businesses may attempt to locate within 600 feet of the property,” the letter states.
That night, at 8:45pm, Fausone received a text from Jason (only first names of cannabis industry lawyers are being used for this article) a lawyer representing one of the applicants vying for Hanford’s last permit.
The text states, “I spoke with my partners and because they are already in escrow to buy another building and would not be utilizing this one, they wanted me to propose offering you 100k to provide notice to vacate the current tenants then they would offer to cover the rental amount your current tenant is paying until you were able to rent the property to another tenant or sell it to another party.”
Fausone reported this lawyer’s offer during Hanford City Council public hearing on September 17. Fausone acknowledged that Caliva was more than 600 feet away from his building but that he and his tenants were getting harassed by the other applicants.
Fausone said that WestCare is located in an area of Hanford that needs it and is “right where it should be.” He and his wife own the building and charge WestCare a steeply discounted rent because they feel Hanford is desperately in need of its services.
“Why aren’t the city council members picketing or lying their bodies down on the sidewalk blocking the doors to protect this facility?” queried Fausone.
As Fausone’s fight with the city to retain WestCare’s designation as a youth facility continued through September, Fausone received his second bribe.
On October 4 Fausone received a text about 10:30pm from Tak, a lawyer representing another cannabis company. Tak said that he got his information on who owned the building from a local realtor and is “open to suggestions to get you comfortable with us moving in across from your property.”
On October 7 while on a road trip with his brother-in-law, a retired Chief of Police who had held that post in three cities, Fausone received a phone call from Tak. He recognized the number and put it on speaker phone. According to Fausone, Tak asked if he “would consider a donation to his favorite charity or organization or he could make a payment directly to him.”
At the end of the conversation, before they said their goodbyes, Tak said, “Well, why don’t you come up with a number and we will see what we can do.”
Fausone’s brother-in-law reported hearing the same statements from Tak and said there was no doubt in his mind that it was a bribe.
Fausone reported the two bribes to Hanford city lawyer Ty Mizote soon after.
A Multi-Billion Dollar Industry Will Bring Corruption
There is a precedent in California of cannabis companies bribing officials to get the upper hand in obtaining the few dispensary permits. The Los Angeles Times wrote an exhaustive report on the problem of marijuana money used to bribe California city officials and staff up and down the state from Humboldt to Adelanto in San Bernardino County.
According to the Times, “There is no doubt in my mind that the multi-billion-dollar nature of the marijuana industry is corrupting public officials,” said a 41-year veteran of law enforcement who began his full-time career as a California Highway Patrol officer stationed in East Los Angeles.
Several newspapers and the cannabis industry itself have reported that mayors, vice-mayors, city council members, planning commissioners and landlords have been bribed to help companies get city permits.
There have been no confirmed reports that anyone working for the city of Hanford has accepted a bribe from the cannabis industry. But the question remains, why is the city of Hanford trying to change the classification of WestCare from a youth facility to a doctor’s office? And if WestCare is not a youth facility as the city claims, then why have two cannabis companies tried to bribe the building’s owner?
HdL Consulting was hired by Hanford to review the cannabis companies applying for the pot dispensary permits and will provide a report to city staff on who they recommend get approval. Mata will then present HDL’s findings to the city council, possibly by the end of November or the beginning of December.
There are still currently six companies competing for the last permit. The city also has two delivery-only permits up for grabs. According to one source familiar with the permitting process the two companies that attempted to bribe Fausone are still in the running.
In reaction, Fausone wrote a letter to the city council members and city staff for them to read before their October 14 general meeting. In the letter he again defends the fact that WestCare is a youth facility and that he and his tenants have been bullied and harassed by the cannabis industry and the City of Hanford.
Fausone also gave City Council member Art Brieno a tour of Westcare on October 11 and “he (Brieno) was surprised to see that in fact the facility is a youth center.” Fausone said in his letter. “In my opinion I feel he may have thought that Parker (Chief of Police) and Darlene had not been forthright in their description of WestCare to the council.”
Fausone ended his letter with, “Lastly, I would like to point out that while the cannabis industry will bring in tax revenue. Is it worth the chance of interfering with the crucial services offered to the children and youth in our area. I hope the city council and staff can be clear-eyed to the fact that the recreational cannabis industry does not have Hanford’s best interests in mind, but is driven purely by money.”