Santa Barbara officials respond to allegations in LA magazine article


Source: City of Santa Barbara

Today City Administrator Paul Casey, City Attorney Ariel Calonne and Police Chief Bernard Melekian released the following statements and fact sheet in response to seriously misleading and false claims published in Los Angeles Magazine .

Since the city began developing commercial cannabis regulations in 2016, Santa Barbara City Council, City Administrator Paul Casey, and City Attorney Ariel Calonne have been committed to ensuring an open and fair process to select the best. cannabis companies. City Council led a competitive business selection process to bring the best businesses to Santa Barbara. The integrity of this process has been called into question by Los Angeles magazine, apparently without the benefit of even a small local investigation.

City administrator Paul Casey said: “Despite the known errors and inaccuracies in the article, the city has taken and will take all appropriate action in response to the factual allegations of corruption. We take these allegations seriously and will ensure that every issue raised is addressed. “

Police chief Bernard Melekian added: “We are about to retain a cabinet to conduct the investigation that I launched on Monday March 15 when I put Anthony Wagner on administrative leave. Mr. Wagner has been extremely cooperative and eagerly awaits the opportunity to clear his name. Nonetheless, the article raised potentially new information regarding Mr. Wagner’s relationship with two people in San Diego who allegedly had ties to the Golden State Greens.

The Wagner investigation is expected to be completed in six to eight weeks. The results of this investigation will be made public to the fullest extent possible.




On December 5, 2017, after a year of work and months of public deliberation, the city council adopted the municipal ordinance on commercial cannabis. This was the culmination of considerable staff work and Board discussion to design the best possible regulatory framework. Since the cannabis industry operated illegally for decades before legalization, the City was careful to design a fair process that would protect the interests of its residents and visitors.

To treat

The order was prepared by the city attorney’s office in conjunction with staff from several departments and Muniservices, LLC, a widely used municipal finance consulting company. The City conducted an extensive public consultation process as part of the development of the ordinance. Muniservices was hired to look into financial matters because of the significant revenue the city receives as a result of Santa Barbara voters’ approval of a cannabis tax.

The retail dispensary selection process began on February 1, 2018. The initial application deadline was March 30. This deadline was extended to April 20, as each of the requests was incomplete in one way or another. Each of the first responders submitted additional information in response to the extension. On July 9, 2018, city administrator Paul Casey officially announced the selections.

Cannabis Application Review Team

Anthony Wagner was just one of five City employees who assessed the permit applications. Other staff included a fire inspector, a capital projects supervisor, the deputy director of finance and a deputy city attorney. Each staff member has signed the following acknowledgment of their ethical duties:

  • “Anyone directly involved in the selection or awarding of City contracts must avoid any activity or situation that involves, or creates the appearance of, an irregularity or conflict of interest. More specifically, the panelist will respect all of the City’s standards of conduct, including:

    • Not participate in a decision in which neither I nor one of my relatives has a financial interest; Not to solicit or accept any gifts, entertainment or favors from any consultant likely to submit references or a proposal in this area;

    • Not disclose and affirmatively protect any information that the City considers confidential;

    • Treat all potential candidates with objectivity and equal conduct. Do not discuss the examination process with applicants or applicants’ staff who may submit identifying information, or a proposal in the matter; and

    • Maintain the integrity of the competitive process and the independence of the proposals by not disclosing any confidential information before, during or after the issuance of permits.

The municipal attorney’s office provided conflict of interest advice to the team upon request.

License transfers are prohibited

The ordinance prohibits license transfers and tightly regulates inventory reorganization or other changes in ownership. Section 9.144.170 of the Municipal Code of Santa Barbara states:

“No licensee shall transfer ownership or control of a commercial cannabis business unless and until the proposed new owner submits all required application documents and pays all applicable fees,” and independently meets the requirements of this chapter in order to be entitled to the issuance of an original commercial cannabis license issued by the city council.(Emphasis added.)

This wording obliges the City to assess any proposed change in ownership against the same rigorous standards as the original applicant. The purpose of this regulation is to prevent a “bait and a trade” where an unqualified assignee sneaks into the Santa Barbara market after a fair competitive process. Santa Barbara’s retail dispensaries have so far operated very successfully with no neighborhood nuisance, parking, crime or other negative impacts.

A team of collaborators working with financial experts under contract strictly applies the Ordinance. The assignee’s financial capacity and business structure discussed by Los Angeles Magazine were reviewed by Muniservices staff, in conjunction with the city attorney’s office. The City staff team independently reviewed the professional qualifications of the transferees and their financial stability. The City also obtained and reviewed criminal background checks from each proposed assignee to verify their compliance with the law.

Order and process validation

The “fairness and integrity” of the City’s permitting process was upheld in federal court by the Honorable André Birotte Jr., United States District Court Judge, in December 2019, in response to a lawsuit filed by one of the failed cannabis license applicants. Justice Birotte is well respected and served as the United States Attorney for the Central District of California before being appointed to the federal bench by President Obama in 2014.

  • The lawsuit was funded by SGSB, Inc. and alleged the city had failed “to uphold the highest standards of fairness and integrity.”

  • SGSB, Inc. has claimed to have “a deep connection to Santa Barbara” while also “being part of the largest vertically integrated cannabis operations in the United States.” . . with its head office in Scottsdale, Arizona.

  • The City hired Jeff Dunn of Best, Best & Krieger to assess and advocate for its process. Mr. Dunn is widely regarded as California’s toughest anti-corruption cannabis lawyer.

  • The City spent $ 101,425.17 in legal fees to win the case.

    • The city council designed the Commercial Cannabis Ordinance to protect taxpayers from the inevitable wars between competing cannabis interests.

    • As a result of Council’s action, the City received full reimbursement of its legal fees from other permit applicants.


March 14, 2021: investigative journalist alludes to corruption in the city of Santa Barbara

March 15, 2021: Decipher Bombshell LA Magazine Coin That Just Hit Town Hall

March 15, 2021: An employee of the city of Santa Barbara is put on administrative leave following an article

March 17, 2021: Lots of innuendo but little substance in the Los Angeles magazine article


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