Utah officials have selected eight companies to grow the state’s first legal cannabis crop, a critical step in launching a newly approved medical marijuana program by early next year.
Half of the cultivation licenses went to existing Utah businesses, while the other half are based out of state but have “Utah ties,” according to a Friday morning news release from the Utah Department of Agriculture and Food.
The agency was authorized to award up to 10 licenses but chose to hand out only eight to avoid an overabundance of cannabis, the statement said.
“The priorities for us with issuing cultivation licenses were to avoid oversupply in the market with too much cannabis product, as well as ensuring enough competition to create a good-quality product and good-quality patient pricing at the pharmacies,” said Andrew Rigby, hemp and medical cannabis program director for the state’s department of agriculture.
Seven of the proposed cannabis cultivation sites are in rural areas and one is in an urban location, Rigby said. He declined to give specific locations but said two of the farms are proposed for Box Elder County and others are planned for Weber, Davis, Tooele, Washington, Sanpete and Carbon counties.
Those proposed cannabis farm sites could change if they fail to win zoning approval from the involved counties or cities, Rigby said.
“The majority of these companies do not have ownership of their proposed locations as of now. So those are ... part of the details that still need to be worked out at a company level,” he said.
Park City resident Jack Rubin’s business, Wholesome Ag., was among the eight winners of a cannabis growing license, provided the company can pass the state’s final checks. Rubin said he’s working with a team of about 10 people, mostly residents, to get his cultivation operation off the ground.
Many members of his team have experience in the marijuana industry, as does Rubin, who said he helped found a medical cannabis business called Curaleaf Connecticut about five years ago.
“We’re obviously thrilled to be working with the Utah Department of Agriculture so we can bring medicine to Utah patients,” said Rubin, who made an unsuccessful run for state Senate last year.
Darren Johnson was disappointed to learn his company, Roaring Lion Farms, didn’t win a license but said the state’s evaluation process seemed fair and above-board.
“We put our best foot forward, and we didn’t get it,” the Saratoga Springs businessman said Friday.
But the state’s decision doesn’t lock Johnson out of Utah’s emerging cannabis industry, he said, adding that he plans to apply for a license to process the plant into medical products.
The Utah Patients Coalition said it was pleased with the pace at which state regulators have been ramping up the medical cannabis program authorized by legislation passed in a December special session.
“We’re thankful that so many applicants showed interest, and are hopeful that the new licensees will be able to quickly begin growing high quality, affordable medical cannabis for tens of thousands of sick Utahns who are eagerly waiting to use it to improve their health,” the coalition said in a tweet following the state’s announcement.
Tom Paskett, executive director of the Utah Cannabis Association, said he wishes the state had assigned all 10 licenses but understands the concern about oversupply.
“This is an important step in creating an entirely new industry in the Beehive State — and one that is eagerly anticipated by so many patients,” Paskett said in a prepared statement. “We look forward to partnering with the new licensees to make sure our industry follows best practices, complies with the law, and works quickly to make this program a success.”
Final approval of the licensees is still pending the completion of criminal background checks and other compliance checks, officials say.
Rigby said cultivators could have their licenses in hand as early as Aug. 1, with the goal of having medical cannabis products available for patients by March.
Agriculture officials in late May put out their call for interested cannabis growers and after a month had received 81 license applications. Forty-eight of those submissions were eliminated for failing to meet the minimum requirements or to achieve baseline technical scores in the evaluation, according to the state’s award justification statement.
A six-person panel with representatives from the state agricultural agency and Utah Association of Counties scored the applications, with the top eight businesses named as license recipients.
The state plans to charge each licensee an annual fee of $100,000 to defray the cost of inspecting and regulating the growing operations; the agriculture department has estimated it will spend $1.165 million over the first year of the state’s medical cannabis program.
If the state does decide to award the remaining two cultivation licenses, it will have to start from scratch with the bidding process rather than drawing from the applications it received in the first round, Rigby said. He said it could be two or three years before the state looks for the final two growers.
The eight companies selected for cultivation licenses are:
Harvest of Utah
Standard Wellness Utah
True North of Utah
Tryke Companies Utah