On November 6, 2018, Utah residents voted in favor of Proposition 2, effectively legalizing a medical marijuana program for the state. However, on December 3, 2018, legislators voted to pass the Utah Medical Cannabis Act to replace Proposition 2. The new law allows for a state-regulating dispensing system of medical cannabis. Medical cannabis business licenses will be awarded through a competitive application process at a date to be determined by the Utah Department of Health. For more information on the cannabis business license types to be available, continue reading below.
Utah Medical Cannabis Business Licenses:
Cannabis Cultivation License: The new law allows the Department of Health to issue up to 10 licenses for cannabis cultivation facilities. After January 1, 2022, the department will be able to issue up to 5 additional licenses for cannabis cultivation facilities if it determines that more licenses are needed to provide adequate supply, quality, or variety of medical cannabis and medical cannabis products to medical cannabis card holders in Utah.
Cannabis Processor License: A Processing license is required to acquire cannabis from a cannabis production establishment, manufacture it into a cannabis product, and sell the cannabis product to a cannabis dispensary. The state has not yet specified a limit on the number of Processing licenses to be issued. It is anticipated that the Department will release more information regarding Processing licenses after the Initiative passes.
Medical Cannabis Pharmacy License: A pharmacy license is required to acquire medical cannabis or medical cannabis products from a cannabis production establishment and sell medical cannabis or medical cannabis products to medical cannabis card holders in Utah. The Department may not issue more than 7 medical cannabis pharmacy licenses in the state. The Department shall issue an 8th license if the state central fill medical cannabis pharmacy is not operational by January 1, 2021 or ceases operations after January 1, 2021.
Since so few licenses will be awarded for pharmacies and cultivation centers, the application process will be fiercely competitive.
Utah Medical Cannabis Business License Applications:
The Utah Department of Health will award licenses to those applicants who provide, among other things, the following items:
- An operating plan that includes operating procedures that comply with the law;
- Financial statements demonstrating that the applicant possesses a minimum of $500,000 in liquid assets available for each cannabis cultivation facility for which the person applies, or a minimum of $100,000 in liquid assets available for each cannabis processing facility or independent cannabis testing laboratory for which the person applies.
Additionally, when faced with competitive applications, the Utah Department of Health will award licenses to the applicants who best demonstrate:
- experience with establishing and successfully operating a business that involves complying with a regulatory environment, tracking inventory, and training, evaluating and monitoring employees;
- an operating plan that will best ensure the safety and security of patrons and the community;
- positive connections to the local community; and
- the extent to which the applicant can reduce the cost of cannabis or cannabis products for patients.
Plan On Applying For A Medical Marijuana Business License In Utah?
The Department of Health is only going to distribute 15 cultivation licenses and one dispensary license per county. If you’re interested in becoming a licensed medical cannabis business, it’s time to start preparing.
To educate yourself on the application process and start drafting the required business plans for a Cannabis Producer license, download our Utah Cannabis Business Starter Package which includes:
- An Informational Overview of Utah’s medical cannabis laws
- An Application Guide and Checklist which gives a detailed summary and checklist of all action items you’ll need to complete before submitting your application
- A Business Plan Template to help you start drafting the required plans and executive summary for your business
- A Financial Plan Template to give you and your investors a comprehensive 3-year projection of what you can possibly expect when selling cannabis