Utah lawmakers removed a proposed residency requirement for the 10 medical cannabis cultivation licenses. A spokesperson for Utah’s agriculture department said that residency restrictions could be illegal.
Utah received 81 applications for one of the 10 cannabis-growing licenses, with eight of the applications coming from out-of-state addresses. Although the law allows Utah to award up to 10 licenses, state officials only awarded eight to avoid an oversupply of cannabis. Of the eight licenses awarded, half of those awarded licenses were from out-of-state entities.
“Half of the awardees already have existing businesses in Utah and the other half are out of state but have Utah ties. All grows will be located in Utah. Seven of the proposed sites are in rural areas and one is in an urban area,” said Kerry W. Gibson, commissioner of the Utah Department of Agriculture and Food.
Some applicants are concerned that eight growers will not be enough to meet demand and an undersupply of cannabis could increase prices and potentially create a black market for cannabis. Others are upset that the state withheld two of the 10 licenses and have begun protesting what they call Utah’s unfair application process. The protests could potentially slow the rollout for medical cannabis in Utah because licenses cannot be finalized until all protests are resolved.
Applicants were required to set aside $250,000 for potential issues. Under the law, indoor growers would be limited to 100,000 square feet of growing space while outdoor growers can have farms as large as four acres. Cultivators can plant between 1,500 to 3,000 plants per acre depending on the spacing used. Final approval of the licenses is pending until background checks and compliance with cannabis growers’ rules are completed.
The Utah Department of Agriculture and Food estimates there will be 16,000 registered medical cannabis cardholders in the first year of Utah’s medical cannabis program. By 2025, there could be over 70,000 cannabis cardholders.