DISPENSARY

In 2018, the City Council passed a rigorous two-phase application process intended to ensure that only the best applicants were awarded licenses, and anyone with a criminal history could not be involved in a legal cannabis business.

Phase one involved meeting a set of minimum qualifying criteria, background checks and a merit-based scoring system. Chula Vista has a cap of eight dispensary licenses, and it received 84 storefront retail applications.

Only the top point-getters from phase one would move on to phase two.

None of the three companies suing Chula Vista scored high enough to move on to the second phase.

To date only one company, Grasshopper Delivery, has gone through the entire licensing process and started to legally operate in Chula Vista. That company got a delivery business license, which is different than the storefront retail licenses dispensaries apply for.

Cannabis Village says the merit-based system was too vague and arbitrary. For example, despite the fact that all of the company’s principals have years of experience in the cannabis industry, its application only scored 125 out of 150 in its Experience category and were not told the reason behind the 25point reduction, according to its lawsuit.

Additionally, the company was deducted 28.5 points from the Operating Plan portion of its application and not told why. Sobel was particularly confused by this because former San Diego and Chula Vista police chief David Bejarano wrote the company’s security protocols himself, the lawsuit states.

During an appeal hearing, Sobel says that a consulting company hired by Chula Vista to review and score the applications didn’t follow the city’s grading criteria. The consultants, HdL, allegedly deducted points because of the format of the application and refused to consider supplementary information that Chula Vista had asked Cannabis Village to submit.

HdL’s representative at the appeal hearing, Matthew Eaton, said he did not personally evaluate Cannabis Village’s application.

“In fact, he testified that his company diluted the experience component in the contravention of the rules, and completely failed to consider the Supplemental Information submitted by CVCV at the request of the city in preparation for the interview,” the lawsuit states. “Such testimony by Mr.

Eaton reveals his ignorance of the facts, and the arbitrary handling of the evaluation process by HdL’s assigned clerk.”

Caligrown made similar allegations in its lawsuit against Chula Vista, specifically that the consultants judged its application on form rather than substance and that Eaton did not personally score the application.

Ultimately, Chula Vista denied Cannabis Village’s appeal. Because the company has no other avenues, it decided to sue.

Eaton declined to comment on this story, as he has done with previous stories about other lawsuits.

The San Diego UnionTribune reached out to Chula Vista’s mayor and City Council, all of whom ran for public office on a platform that they would make the city more attractive to new businesses.

Councilman Mike Diaz declined to comment. Mayor Mary Casillas Salas and Councilman John McCann did not respond to requests for comment.

Through his spokesman, Councilman Steve Padilla was unable to comment Wednesday because he needs, “to get an updated briefing from his staff on this.”

In May, Padilla was frustrated by how long it was taking the city to process cannabis business license applications and threatened to ask “tough questions” unless something changed.

“I’m going to begin, if necessary — I hope everyone is listening — to start asking a lot of tough questions in a more public way very soon if things don’t start moving along more quickly,” he told the City Council in May. “I’m aware of what’s going on behind the scenes. It’s just not something that’s tolerable.”

To date, Padilla has not followed up on the statement to ask tough questions in a more public way.

Councilwoman Jill Galvez, who was not on the City Council when the marijuana ordinances were passed, criticized the licensing process. She knocked the City Council’s decision to change the selection process from a lottery system, which is designed to limit the risk of litigation from rejected applicants, to a merit-based system, which gives the city more control over whom to award licenses to.

“A can of worms was opened when the language of the ordinance was changed from lottery to merit-based,” she said.

City Attorney Glenn Googins did not respond to a request to comment on this specific lawsuit or the larger issue in general.