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One day three years ago, Rose Jasso and her husband, Bryan Rodriguez, were about to break for lunch at Five Star Barbershop on Plaza Boulevard in National City when a man introducing himself as Greg Moreno walked in and asked for a haircut.
“I remember it as if it were yesterday,” Jasso said of the day she met Moreno. “He walks toward us with a big old smile on his face and I got the feeling of a used car salesman. The first comment he made was, ‘What do you all think about medicinal marijuana?’”
Moreno settled into Jasso’s barber chair and handed her and her husband business cards. He was a Marine veteran, he said, working for a company called Element 7 that wanted to open a “holistic clinic for patients, specifically veterans” who might benefit from medical cannabis, Jasso recalled.
He asked again: What did Jasso think about medicinal marijuana?
“It’s fine,” Jasso answered, unsure why Moreno kept asking. “If marijuana helps people with their anxiety, I’m a supporter of that,” she said.
The questions continued while Jasso cut Moreno’s hair. Where did she and Bryan live, Moreno asked? (Chula Vista.) Any kids? (Three.) Did anyone in the family ever live in National City?
Jasso said she had grown up in the city and graduated from Sweetwater High School. Chatting the way barbers do, she disclosed that her father, an immigrant from Mexico, had died when she was young. Working at a barbershop was the fulfillment of a lifelong dream to work in the beauty industry, she said.
“You have a very powerful story,” Moreno said as he got up to pay. “I’m going to leave these papers with you.” He pulled out a sheaf of forms — a survey, he said. “Hopefully, you can fill it out.”
Moreno said Element 7 was looking for a few local residents to receive a small portion of profits from the company’s proposed cannabis clinic as way of “helping the community,” Jasso recalled. He said the company was hoping to “find that special person with that great story we can give back to.” Who knows, he said, maybe Jasso would be that person.
Moreno left the sheaf of papers on the counter, took one of Jasso’s business cards and walked out the door.
Late last year, in a shaky voice, Jasso told a shortened version of that story to the five assembled members of the National City Council. It was the evening of Dec. 3, and Jasso, accompanied by a phalanx of friends and family members, stood behind a lectern during public comment at a regularly scheduled City Council meeting.
Speaking rapidly because of a two-minute time limit, Jasso accused Moreno, along with other key employees of Element 7, of using false claims of a charitable giveback program to trick her into signing forms that made her the unwitting owner on paper of the company’s planned National City cannabis business.
National City is one of numerous California cities that include what are known as equity provisions in their cannabis business licensing programs. Applicants seeking to open a cannabis business in National City are given preference in the city’s competitive licensing program if they are majority owned by a local resident.
The provision is meant to ensure that the economic benefits of a lucrative cannabis license go to local entrepreneurs rather than to out of town corporations. Equity provisions in other cities award similar advantages to applicants from certain marginalized communities, or who have prior drug-related criminal convictions.
Standing before the City Council, Jasso claimed that executives at Element 7, a San Francisco-based retail cannabis company with what its corporate website calls “an operational footprint that spans California,” had persuaded her to sign a series of forms by telling her they were part of the company’s charitable community giving program. In fact, Jasso said, the forms were part of a cannabis retail license application that listed Jasso without her knowledge as the local owner of Element 7’s proposed National City cannabis business.
Element 7 submitted that application in 2022, according to city records, listing Jasso as the 51 percent owner of its National City business. The city ultimately awarded Element 7 one of six competitively bid cannabis retail licenses that year. Sixteen other businesses had competed for one of the licenses.
At the Dec. 3 Council meeting, Jasso said she never intended to own a cannabis business, knows nothing about the industry and was terrified that she was now legally liable for a company she never even knew she was part of.
“My signatures were prostituted to outside high-profile money-thirsty criminals with the intention to operate a million-dollar cannabis storefront by profiteering on my name,” Jasso told the Council. “There is a black hole in your application policy…I have been exploited.”
Moreno did not respond to multiple requests for comment. Robert DiVito, Element 7’s CEO, wrote in an email to Voice of San Diego that National City officials had reviewed Element 7’s cannabis business license application following Jasso’s appearance at the Council meeting and “concluded that Element 7 has, and continues, to meet the requirements for local ownership.”
“The city concluded that Element 7 had done nothing wrong and that if Ms. Jasso essentially had ‘changed her mind’ [about her business relationship with Element 7] it was up to the parties to sort it out and they hoped we could work it out,” DiVito said in the email.
In a Dec. 20 email sent to city officials following Jasso’s appearance at the National City Council meeting, DiVito gave a fuller account of his interactions with Jasso. He denied that he had “tricked” Jasso into owning Element 7’s National City business. Jasso’s claims at the Council meeting, DiVito wrote, “are not logical and make no sense.”
“There is no trickery here,” DiVito wrote to city officials. “The [National City cannabis license local owner] rules were clear and, having participated in social equity programs in Los Angeles, San Francisco and Oakland, we followed and continue to adhere to those rules. Ms. Jasso has and always will own 51% of [Element 7’s National City] cannabis license.”
Element 7’s website describes the company as a “retail cannabis company…with a mission of becoming the largest cannabis retailer in the State of California.” The website lists 10 currently open Element 7 cannabis dispensaries throughout the state, including one in Chula Vista. Four more dispensaries are planned, the website says.
The company’s National City cannabis license application estimated it would cost more than $1.4 million to open a dispensary in the city. The application lists Jasso as a “partner” in the business with a 51 percent ownership share and says the company “has access to over $30,000,000 in financing.”
The application lists DiVito as “CEO” with a 49 percent share and says the company is headquartered at an address in the Presidio Heights neighborhood of San Francisco. Nowhere does the application mention that, at the time the application was filed, Jasso worked as a barber.
Bill Nosal, an Orange County cannabis entrepreneur who applied unsuccessfully for one of National City’s cannabis licenses, said it is common knowledge in the cannabis industry that large corporations have learned to circumvent local equity licensing requirements by finding a “fig lea[f]” local owner who sometimes doesn’t even know he or she has been conscripted into signing legal documents that enable a corporation to claim local ownership.
“Companies took something well intended, something that was supposed to benefit marginalized groups, and instead of being honorable to that, cities let companies take advantage of that,” Nosal said. “This is a standard m.o. for most cannabis companies.”
Nosal said companies often prefer to find a local resident “who maybe isn’t acclimated to legal documents and is struggling to make ends meet” to sign local ownership forms. Residents with more business savvy, Nosal said, tend to demand a higher share of company profits in exchange for an ownership role.
Nosal, along with a National City business partner and another locally owned cannabis company that applied unsuccessfully for a National City cannabis license, is currently suing the city for violating its own licensing requirements by awarding licenses to larger out-of-town companies that should have gone to legitimate local entrepreneurs. The case is currently scheduled for mediation.
Jasso said that after her initial encounter with Moreno at the barbershop, she put the conversation out of her mind and didn’t bother looking at the forms Moreno had left behind. But then he began calling. And he kept returning for haircuts.
Each time he contacted her, Jasso said, Moreno got more specific about what Element 7 wanted to offer her. He told her the company was inspired by her story and had decided to include her in its local charitable giving program.
All Jasso had to do, Moreno said, was sign some forms enabling the city to do a background check and supply documentation proving she had lived in National City for at least three years prior to 2021. A high school diploma would do.
National City’s cannabis license regulations state that, to qualify as a local owner, applicants must have lived in the city for at least three years prior to 2021.
If Jasso passed the background check, Moreno said, Element 7 would give her $1,500 per month, roughly 1 percent of its anticipated revenue from the National City dispensary.
Jasso talked over the offer with her husband. She felt torn, she recalled. There was something about Moreno she didn’t quite trust. But the money would help her family immensely.
Rodriguez urged Jasso to say yes. Figuring she had nothing to lose, she agreed to meet Moreno and another Element 7 employee named Josh Black at the barbershop. She and Rodriguez looked over forms the men showed them and saw that some of the forms did indeed say “background check” at the top. And the forms were on National City letterhead.
“So, I signed,” Jasso said.
And then, for nearly a year and a half, nothing happened. Jasso said Moreno would occasionally call or come by the barbershop to say the company’s plans were progressing but the dispensary hadn’t opened yet. Don’t worry, he assured Jasso. “You’re going to get the 1 percent.”
Jasso was on the verge of dismissing the entire episode as a bizarre come-on when, one day in March 2024, DiVito pulled up in front of her house in a Tesla driven by Moreno. “My husband was mowing the lawn,” Jasso said.
Jasso had not previously met DiVito. He told her and Rodriguez that, after many delays, Element 7 was ready to start giving them the $1,500 monthly charity payments. All they needed to do was come with him to a UPS store and sign and notarize one more document. The money, DiVito said, would be paid “on the first Tuesday of every month.”
Rodriguez seemed persuaded. He urged Jasso to go along. “In my state of vulnerability and naiveness and wanting to believe my husband,” she said, she agreed. She accompanied DiVito to the UPS store and signed a form he presented to her from a thick binder of other documents.
The next month, after Jasso sent a reminder asking about the payment, $1,500 appeared in her and Rodriguez’s bank account from Element 7. The payments continued, though Rodriguez often had to text DiVito to remind him to send the money.
Jasso asked DiVito for copies of the documents she had signed. Each time she had met Element 7 employees, she said, they had carried thick binders and opened them to signature pages without giving Jasso time to read through the binder.
In a March 12, 2024, email sent to DiVito, Jasso wrote, “I’m still waiting for copies of the documents I signed in 2022 at Five Star Barbershop with Greg Moreno & the Australian guy [Josh Black]. I have not received any copies of those documents as promised. I want copies of all documentations which include my signatures. I have requested those copies from Greg [Moreno] verbally so I expect to have those ASAP.”
As he had done previously, Jasso said, DiVito postponed sending the documents. “Let me check with [Black and Moreno] and circle back with you,” DiVito responded to Jasso’s email. “I’ll be here to help you with whatever you need going forward. I’ve been going through some family issues, so I’ve been a tad bit delayed on getting back to people, my apologies.”
That same month, court records show, a judge ordered Element 7 to pay $2.8 million to settle a lawsuit stemming from a business dispute with a rival cannabis company called GH Group. Several months before that, according to a criminal history included in an updated version of Element 7’s cannabis business license application, DiVito also had pleaded guilty to a DUI charge in Monterey County and had his driver’s license revoked for a year.
In July, Jasso received a copy of the documents she had signed. Black, the Element 7 employee who had met Jasso at the barbershop when she signed her first set of forms, met her at a food hall in National City and gave her a thick binder — after asking her to sign yet one more document he said the company needed to complete a change of address for the proposed National City dispensary.
Back home, Jasso read through the binder and realized to her dismay that she was not simply the recipient of a charity payment from Element 7’s National City business — she was the also owner of the business itself.
She became frightened and showed the binder to her husband. “I’ve been deceived,” she said. “I feel like I’m in a Netflix movie…This is fraud.”
She called other family members and friends to share her fears. A friend who worked at Sweetwater High School suggested she talk to City Councilmember Marcus Bush, who has been a vocal supporter of National City’s nascent cannabis industry since the city first authorized retail cannabis sales in 2021.
Bush met Jasso, listened to her story and urged her to meet with other city officials. “I am concerned that a local resident, someone from National City, is saying that this out-of-town business paid her to pretend to be a local owner,” Bush told Voice of San Diego. “If what she is saying is true, then that goes counter to the spirit of what we as a Council wanted.”
Jasso said she is still waiting for someone from the city to help her get out of her business relationship with Element 7. She said she met with Mayor Ron Morrison and City Attorney Barry Schultz, emailed City Councilmembers and finally appeared at the Dec. 3 Council meeting to voice her frustration that no one at the city seemed even to acknowledge that there was a problem with the city’s cannabis licensing procedure.
It was only after that appearance that City Manager Benjamin Martinez sent DiVito a letter on Dec. 10 asking him to respond to Jasso’s allegations at the Council meeting. “Please be advised that, should Ms. Jasso’s allegations be confirmed, the city will revoke your development agreement for non-compliance with the local ownership provisions,” the letter said.
In his Dec. 20 emailed response to Martinez, DiVito insisted that Element 7’s entire business plan had been presented to Jasso from the beginning. “She consented to her participation, she signed documents consenting her acknowledgement and understanding, she has received money from us for the past two years every single month to help her out financially, and now she claims that it was all pre-meditated manipulation?” DiVito wrote.
In the email, DiVito said Jasso’s situation was no different from that of the local owner of Element 7’s Laurel Village dispensary in San Francisco, a man named Shanti De Luca, whom DiVito described as “the CEO and president of that business.”
The Laurel Village dispensary is located at the same San Francisco dispensary storefront listed as Element 7’s corporate address on the company’s National City cannabis license application. A call to the number listed on the Laurel Village dispensary’s website was answered by a voice mailbox that, according to the outgoing message, has not been set up yet. A LinkedIn page for a man named Shanti De Luca in San Francisco identifies him as a bartender and sales representative for an alcohol distribution company. The LinkedIn page makes no mention of Element 7.
In an emailed response to a list of questions sent by Voice of San Diego, Carlos Aguirre, director of Housing and Community Development for National City, said Element 7’s cannabis license application, like all similar applications, was reviewed and ranked by a third-party evaluator.
Aguirre confirmed that neither the evaluator nor any city employee had contacted Jasso or asked to see a form of photo identification to verify her identity or her role with Element 7. Instead, Aguirre said, the city relied on Jasso’s signed declaration of local ownership — one of many forms she said she signed unknowingly during her interactions with Element 7 employees — and what Aguirre described as “medical and school records” to confirm Jasso’s identity and her ownership of the Element 7 dispensary.
A list of cannabis licensing rules and procedures posted on the National City website states that, as part of its licensing process, “the city will meet with applicants individually to begin negotiations” over operating a cannabis business.
In a Feb. 17 email sent to Jasso and Element 7’s Josh Black, City Attorney Schultz said that, because Jasso had signed a local ownership agreement and received monthly payments from Element 7, she was a legitimate local owner and would have to resolve any remaining problems with Element 7 on her own.
“From the city’s perspective, this is a contractual dispute between Ms. Jasso and Element 7 and does not involve the city,” Schultz wrote. However, Schultz added, before receiving final approval to open its dispensary, Element 7 would be required to submit another operating agreement with Jasso’s signature verifying her 51 percent ownership stake. And there would be an audit to ensure she was receiving a commensurate share of company profits.
Element 7’s corporate website no longer includes National City on a list of “upcoming” company store locations. The strip mall storefront it proposed as the site of its National City dispensary remains unopen. In its National City license application, the company estimated the dispensary would have earned roughly $28 million in annual revenue five years after opening.
Jasso said she wants no part of Element 7’s money and nothing further to do with the company. She said she asked her husband in December to tell DiVito to stop sending her the $1,500 monthly payments, which, according to a payment register provided by Jasso, did indeed stop in December. (In his Dec. 20 response to National City officials, DiVito claimed that Jasso’s husband pressured him for payment in December, an assertion that Jasso said is “untrue.”)
Jasso said she still doesn’t know how to extricate herself from her relationship with Element 7. And she remains afraid that the company will sue her or otherwise compel her to pay money she doesn’t have.
“These guys wanted to operate in [National City] and wanted someone from the city and they used me,” Jasso said. “I was praying about this. Asking God to give me knowledge… Do I have to get a lawyer? Why would I want to be in business with these guys who lied to me? How is any of it legit?”
“}]] A barber in National City says a San Francisco-based cannabis chain used her identity to gain a local retail license by claiming she was the company’s local owner. She was, she just didn’t know it. Read More
