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Utah is Accepting Applications for Medical Cannabis Processors and has a New Structure for Dispensaries

by Faith Fidura September 19, 2019

 

Utah Accepting Applications for Medical Cannabis Processors

shutterstock_562237243The Utah Department of Health released a Request for Applications (RFA) for medical cannabis processors on August 23, 2019. As outlined by the RFA, the Department will accept applications for processors until August 23, 2024. 

There is a non-refundable application fee of $1,250. Applicants must obtain a performance bond of at least $50,000 with a surety authorized to transact surety business in the state.

There are two different tiers of processing licenses interested parties may apply for:

  • A Tier 1 Processor License allows the licensee to receive cannabis from a licensed cannabis cultivation facility or to accept THC or THC byproducts from a Utah licensed cannabis processing facility or industrial hemp processor to then process, manufacture, dry, cure, package, and label cannabis and cannabis products for sale or transfer to another cannabis processing facility or a medical cannabis pharmacy. If awarded a license, a license fee of $100,000.00 must be paid within 30 days.
  • A Tier 2 Processor License allows the licensee to receive cannabis from a licensed cannabis cultivation facility or a cannabis processing facility to package and label cannabis and cannabis products for sale or transfer to another cannabis processing facility, a medical cannabis pharmacy, or the state central fill medical cannabis pharmacy. If awarded a license, a license fee of $35,000.00 must be paid within 30 days.

The licenses issued will expire on December 31, 2020 and must be renewed every year after.

The application calls for the submission of various business plans such as plans for processing methods, security, and inventory control. For assistance developing these specific business plans, view our Processing Plan Template, Security Plan Template, and Inventory Control Plan Template.

We also have Marijuana Business Plan Template Package which includes the above plans plus additional plans necessary for establishing and operating a successful marijuana business. You can apply code “BIZPACK35” at checkout for 35% off the package.

Utah Adjusts Structure for Licensing Dispensaries

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Utah held a special session to change how dispensaries will be licensed and regulated on September 16, 2019. Governor Gary Herbert called for the special session to abolish the original plan of having a state-run medical cannabis dispensary system for the medical marijuana program. The change was mainly due to the concern that state government workers would be responsible for operating a business that is still federally illegal.

For example, the Department of Health recently awarded only 8 out of 10 available medical cannabis cultivation licenses to successful applicants. To avoid any more conflict from unsuccessful applicants and the state regulatory appeals board, the bill changed the number of cultivation licenses allowed in the state from 10 to no more than 8.Lawmakers instead agreed on a bill to license 14 privately-run dispensaries with the possibility of licensing more if the Utah Department of Health determines it is necessary to properly service registered patients throughout the state. Both the Senate and the House voted unanimously to approve the bill, SB10002, which also made several other emergency fixes to the state’s medical cannabis program.

The legislation allows the Department of Health to split the licensing application process for dispensaries into two phases, but if it does, both application processes must be completed so that the total number of licenses (14) are issued by July 1, 2020.

The non-refundable application and license fee for a dispensary license is to be determined by the Department of Health. Applicants for a dispensary license must obtain and maintain a performance bond of at least $125,000 with a surety authorized to transact surety business in the state.

To address the needs of rural residents, patients will also be able to order medical cannabis products online for delivery at their homes. Certain licensed dispensaries will be permitted, as part of their dispensary license, to deliver the medical cannabis to patient’s homes.  

The governor is expected to sign the bill into law shortly. If you plan on applying for a dispensary license in Utah, begin drafting your required business plan with our Marijuana Business Plan Template. The template plan includes all of our industry expert’s dispensary business plan-related material in one document with executive summaries of products and services, operations, security, fire safety, management, and more. You can apply code "GETSTARTED25" at checkout for 25% off.