The Utah Department of Agriculture and Food approved eight licenses for companies to grow medical cannabis late last week.
Welby Evangelista, president of Northstar Holdings, a medical cannabis company with existing operations in California, Nevada and Colorado, told City Weekly that his company “qualified for a license” but was not given one. State law allows the department to award up to 10 licences and Northstar Holdings scored 10th in licensing, according to Evangelista.
Andrew Rigby, director of medical cannabis and industrial hemp programs, said in a news release that “the decision to only award eight licenses was made to avoid an oversupply of product, while still maintaining a healthy diversity of cultivators for purposes of competition of product quality and patient pricing.”
But Evangelista doesn’t agree with Rigby’s reasoning, arguing it’s not the department’s responsibility to “determine what the free market will do,” and that the department is not able to predict which companies will be successful in the market.
Northstar Holdings plans to file a “protest and injunction against the state,” according to Evangelista.
“I’m not complaining because I failed … I am complaining because we were one of the 10.” Evangelista said. “Why aren’t we putting all 10 out to ensure that there is plenty of supply for medical patients here and that there is a variety of producers in [Utah].”
The department, along with the Utah Division of Purchasing, approved licenses for Dragonfly Greenhouse, Harvest of Utah, Oakbridge Greenhouses, Standard Wellness Utah, True North of Utah, Tryke Companies Utah, Zion Cultivars and Wholesome Ag.
Half of the approved businesses are already based in Utah, while the other half are “out of state but have Utah ties,” according to the news release. One grow sight will be located in an urban area while the remaining seven are rural.
Tryke Companies, which operates out of Las Vegas, Nev., announced a partnership with rapper Wiz Khalifa's cannabis brand to grow his signature strain “Khalifa Kush.”
The highly competitive licensing process saw applications from 81 businesses which the officials “spent hundreds of hours” reviewing, department commissioner Kerry Gibson said.
Brandon Lynaugh, director of external relations at Standard Wellness told City Weekly the company was “thrilled” to receive a license considering the highly competitive application process. The medical cannabis company is currently based in Ohio and operates a cultivation and processing facility.
Lynaugh noted that Standard Wellness’ recently approved license was for cultivation only, meaning the company cannot sell its own line of processed products like tinctures and topicals but would be able to sell marijuana flower to dispensaries. The company intends to apply for a processing license as well.
Standard Wellness chose to expand its business in Utah’s highly regulated market because it found success in Ohio which has a similarly regulated cannabis space, according to Lynaugh.
“The thing about a state like Utah that comes online in 2019, it gets to learn from all the other states that have come before it,” Lynaugh said. “And I know they’ve done their due diligence and looked at other places to figure out what’s the right model that we should employ, what’s the right number of licenses that we should issue.”
The Utah Patients Coalition, a political action committee that campaigned for the legalization of medical cannabis, celebrated the licensing in a statement released on Twitter.
“We are … grateful to the regulators who have worked so quickly in the interest of patients,” the statement reads. “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.”
Utah voters backed Prop 2 during last year’s election, a ballot initiative that would create a medical cannabis program starting December 2018. However, in a special session, the state legislature passed a compromise bill that made adjustments to the original proposition.