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Medical marijuana growers, processors vie for limited licenses in Utah

SALT LAKE CITY — It will cost a Utah grower or processor of medical marijuana $100,000 in licensing fees, which "is a drop in the bucket" where the marijuana industry is concerned," said Drew Rigby, the state's cannabis program manager.

"The fees represent the market opportunity at hand," he said Wednesday following a sparsely attended public hearing where processing establishment rules were to be discussed. Applicants for a limited number of cultivation licenses are also required to have at least $250,000 set aside for potential issues that deal with running a business of this kind.

"Anyone with experience would have that kind of capital," Rigby, the Hemp and Cannabis Program director with the Utah Department of Agriculture and Food, said.

Licensing fees are the same for cultivators and Tier 1 processors, though there is a lower-tier/cheaper license option for processors wanting only to package and label medical marijuana products, which is a $35,000 fee.

Derek Mosher, of Logan, is chomping at the bit to get into the new market.

"This is a medical option that helps a lot of people," the 28-year-old business owner said, adding that he's long been a critic of addictive pain pills. "People sometimes struggle their whole lives with pain and getting addicted to pills doesn't help them."

"People's lives would be so much better if they had access to something like this," Mosher said.

Cannabis plants being grown at Utah Department of Agriculture and Food are pictured on Wednesday, June 26, 2019, in Salt Lake City.
Cannabis plants being grown at Utah Department of Agriculture and Food are pictured on Wednesday, June 26, 2019, in Salt Lake City.
Wendy Leonard, Deseret News

He's not the only one who thinks this, as a June 5 public hearing regarding rules for cannabis cultivators was packed with potential growers and others interested in the process.

The state only has the authority to grant up to 10 licenses for growers, however.

Rigby said that doesn't mean that 10 cultivation licenses will be awarded. It will all depend upon patient demand.

"The worst thing we could do, in my opinion, is oversupply the market," he said, adding that at least a few production facilities are necessary to diversify the market and keep it competitive. He said a University of Utah study estimates Utah will have up to 45,000 registered medical cannabis patients in the first four years of it being available.

The law could be adjusted to accommodate more patients, if necessary, Rigby said.

The process asks those interested to submit a request for proposal, which "is intended to clearly identify which facilities are the most qualified to meet the needs of the Utah Medical Cannabis Act, and which applicants are most prepared to begin cultivating medical cannabis in Utah," Rigby said.

Utah law dictates that indoor growers would be limited to 100,000 square feet of growing space, while outdoor farms could occupy up to 4 acres. Rigby said growers can plant anywhere from 1,500 to 3,000 plants per acre, depending upon the spacing used.

Growers of medical cannabis in Utah would operate a nursery, where they would cultivate and harvest the plants. Cultivators can also perform their own drying, trimming and curing, if desired.

There is no limit to the number of processors the state can license, as long as they meet the criteria, Rigby said.

Most of the processing — including drying, trimming, curing, extraction, refinement and formulation, as well as packaging and labeling — Rigby said, could likely happen along the Wasatch Front, where a number of nutraceutical processors already exist.

Licenses, he said, could easily go to companies already up and running. Same with cultivators, as at least some of the applicants already operate successful farms growing other products in Utah.

The Utah Department of Agriculture and Food will issue licenses around July 15. The deadline to apply is Monday.

Time is of the essence, Rigby said, adding that the program is "quite ahead of schedule."

In order to get products in the hands of patients by Jan. 1, which is his goal, Rigby said plants need to be in pots by the first week of August. He believes the first crop will be a thin supply, of mostly consumable flowers only.

By March, more products will be available. The Utah Department of Health will oversee an electronic verification system that monitors doctors, patients and distributing pharmacies.

"It's exciting," said Mosher, who already owns a couple electronic cigarette shops in Cache County and in Montana. He's not looking to leave the state, as Utah has always been his home.

Correction: An earlier version said indoor growers will be able to use up to 1,000 square feet for cultivation. They can use up to 100,000 square feet. Also licenses will be issued around July 15, not on July 15.