Utah Rejects Challenges to Cannabis Grow Licenses, Considers Distribution Changes

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SALT LAKE CITY Several developments in Utah could be signaling a rocky road ahead for medicinal cannabis.

Six companies challenged the Utah Department of Agriculture and Food’s decision to issue only eight medicinal cannabis grow licenses. Ten licenses were available but officials decided against granting the remaining two. The challenges made several claims, including a charge that the department made errors in scoring applications. Utah officials did not agree and have rejected the formal protests of the six companies. 

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“It does not appear from the procurement file or the protest that the Department of Agriculture & Food acted arbitrary and capricious or clearly erroneous in determining to only award 8 licenses. In fact, it appears that the Department of Agriculture & Food carefully studied the topic about how many licenses it should award,” Christopher Hughes, the state’s Chief Procurement Officer, wrote in letters.

One of the companies that filed a protest, North Star Holdings, has plans to appeal the decision.

“We’re disappointed they’re dismissing the protest and we’re going to take the next step which will be filing an appeal. I predict the others will do as well,” said Welby Evangelista, the president of North Star Holdings, according to Fox 13. “The bottom line is we want to do what is required to benefit medical patients here in Utah and make sure this process was really geared toward creating the best possible programs in medical cannabis for the benefit of patients.”

The Department of Food and Agriculture is claiming that granting ten growing licenses could result in an over saturation of cannabis on the market.

Michael Caldwell, chief executive officer for Tintic United Bioscience LLC, a research firm based in Utah, does not agree with the department’s rationale. Caldwell claims the department violated a “blackout period” where state health officials were not permitted to communicate with applicants. 

“It’s suspicious and suggests favoritism,” Caldwell told the Salt Lake Tribune. 

Utah also is considering changes to its cannabis distribution regulations. Currently, there are plans for county health facilities to dispense medicinal cannabis. Some feel this could place government employees at risk of violating federal law. 

State Senate Majority leader Evan Vickers said he and other lawmakers have been considering a solution to the issue. 

“I think we’re pretty close to having a solution that would minimize if not eliminate risk for the local health departments,” he told the Salt Lake Tribune.

In a statement this week, the Utah Department of Health said it is working with legislators and Governor Herbert “to find solutions that will ensure patients statewide have access to medical cannabis within the timeline set out in the Medical Cannabis Act.”

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