A cannabis business previously approved for a commercial distribution permit in Hayward could have the license rescinded next week after city officials learned of the applicant’s alleged connections to a man arrested by Hayward Police earlier this year for running a large-scale illegal cannabis cultivation site.

Last June, the Hayward City Council approved a conditional-use permit for Vista Development Enterprises , a commercial cannabis distribution business. The permit for the property at 2376 Davis Avenue, an industrial area of Hayward near the shoreline, however, is conditional on approval of the site plan.

But starting last January, city officials began seeing red flags. A land-use plan submitted by Vista’s applicant, Igor Goldenberg, was returned. City staff deemed the plan incomplete. But around the same time, Hayward Police alerted city staff that it had evidence of a link between Vista and the recent arrest of a Hayward man named Erik Valko, who was arrested last January on suspicion of running a large-scale illegal cannabis farm.

According to Hayward’s municipal code, being convicted of felony, being subject of fines, and providing a false application, among other reasons, is grounds for the city to nullify a cannabis permit.

But Goldenberg said his company has no operational connection to Valko other than contracting with his consulting firm for services related to corporation and expertise in the licensing process, said Scott Candell, the attorney for Vista.

“Mr. Salko does not have a single criminal issue that could have posed a problem for
this application. Mr. Salko has never been convicted of any crime or had any other issue that would have disqualified a cannabis permit applicant.” Candell wrote in a letter to the city on April 29.

“Mr. Salko was arrested for a cannabis offense in January of 2019. However, as we know, an individual is innocent until proven guilty, and an arrest by itself cannot be treated as a conviction. Regardless, as soon as Vista discovered the arrest, it terminated its consulting contract with MM Consulting pending a successful resolution of the case. There is absolutely nothing Vista could or should have done differently in handling this matter.”

But the city said evidence suggests Valko was more than a contractor for Vista. As part of the investigation into Valko’s alleged illegal cannabis enterprise, Hayward Police collected evidence last February at his home in Lafayette that they said yielded evidence of Valko’s larger involvement with Vista.

The evidence included a binder labeled “Vista Development Enterprises – Standard Operating Procedures Manual” and a Home Depot receipt that shows Valko purchased floor installation for Vista’s proposed site on Davis Avenue.

“Mr. Salko’s involvement with Vista was not disclosed as part of the commercial cannabis
permit application that was ultimately approved by the City Council. Vista/Mr. Goldenberg’s failure to disclose Mr. Salko’s association with Vista during the application review process materially affected the outcome of Vista’s application since the background check process would have identified Mr. Salko’s prior history of illegal cultivation and staff would not have recommended Vista for approval,” city staff wrote.

On Tuesday night, the Hayward City Council will debate whether to rescind the permit as recommended by city staff.

Despite the potential setback, Hayward’s long-term strategy for building a robust cannabis industry includes the potential for approving over the next few years up to two dozen total permits. As of yet, none of the first wave of permits have yet to open for business.