Utah Cannabis Business Licensing Process: What You Need to Know Now…

Utah Cannabis Business Licensing Process: What You Need to Know Now…

On December 3, 2018, Utah lawmakers passed House Bill 3001: Utah Medical Cannabis Act. This legislation replaces Ballot Proposition 2, which was approved by Utah voters in the November 2018 general election.

Utah's medical cannabis ballot measure was approved by a margin of 53 percent to 47 percent.

The Utah Department of Health (UDOH) has until March 1st, 2020 to issue medical cannabis cards to patients, register medical providers who wish to recommend medical cannabis treatment for their patients, and license medical cannabis pharmacies.

The UDOH will begin accepting applications to operate medical cannabis pharmacies by March 1, 2020.

The Utah Department of Agriculture and Food has authority over cannabis cultivation and processing.


What Is Allowed


The deal creates a private, state-regulated growing and dispensing operation to allow people with certain medical conditions to use the drug in limited edible forms like chewable gummies, topical lotions or balms, as oils or in devices similiar to electronic cigarettes.

Smoking medical marijuana would not be allowed under the measure.

Patients who don't live within 100 miles of a dispensary would be able to cultivate six cannabis plants at home.

Anyone can legally use CBD oil

A cannabis cardholder would be permitted to purchase no more than "2 ounces by weight" of unprocessed marijuana, or alternatively, a processed product that contains no more than 10 grams of THC or CBD. The initiative prohibits a person from purchasing in excess of those amounts in any 14-day period.

A cardholder could designate up to two caregivers who would be allowed to grow up to six plants under those regulations.

The initiative does not address any limits on how much personally grown marijuana a person can possess at a given time, except that the highest number of plants they can grow is six.

A caregiver must be at least 18 and have no felony convictions whose sentence expired within the past seven years.

The number of dispensaries in the state would be limited to no more than one per county, except in large counties where the state can issue a number of licenses "equal to the number of residents in the county divided by 150,000, rounded up to the nearest greater whole number." You do the math!

Licensing Preference will be given to applicants who can show they "will best ensure the safety and security of patrons and the community" and demonstrate they can keep costs low.

The "suitability of the proposed location" for dispensaries would also be a factor in the application process.

The state would limit the number of available cannabis growing facility licenses to 15.

The initiative requires the Utah Department of Health to begin issuing medical cannabis cards to qualifying applicants by no later than March 1, 2020.

But at any time before July 1, 2020, a person without a card but who possesses marijuana is given "an affirmative defense to criminal charges" if they can show they "would be eligible for a medical cannabis card."

The initiative does not explicitly say that the person using that defense must prove they bought the marijuana from a state-approved seller, whether in Utah or elsewhere.

The initiative does not require that the Utah Department of Agriculture and Food take applications for dispensary licenses until March 2020, nor cannabis growing facilities until January 2020.

Licensed commercial cannabis growers would be required to keep their cannabis plants obscured from view at the perimeter of their facility.

Growers would also be required to maintain an "inventory control system" uniquely identifying each plant once it reaches a certain size and stage of development, each harvest of such plants, each transported batch, and any disposal of contaminated or excess cannabis.

After marijuana would be processed into a product, it would be required to be put into packaging describing what it is, the amount of THC and CBD it contains, and giving it an individual identifier number that is connected to an inventory system.

However, "a cannabis product may vary in the cannabis product's labeled cannabis profile by up to 15 (percent) of the indicated amount of a given cannabinoid, by weight," the initiative says.

all marijuana products manufactured in Utah would be prohibited from designs deemed to resemble a candy package or appeal to children, and would be required to be opaque, designed to prevent children from opening it, and "tamper evident."

Any marijuana sold at a dispensary must have also passed the testing of "a representative sample" of it at "an independent cannabis testing laboratory,"

Under the initiative, if a patient uses "a means of administration that involves cannabis combustion at a temperature that is not greater than 750 degrees Farenheit and that does not involve using a flame," then they are not considered to be smoking marijuana.

Generally, that means marijuana can be vaporized, but not lit and smoked in the form of a marijuana cigarette. Smoking marijuana as defined in the initiative is not permitted.


Medical Cannabis Cardholders: Medical cannabis treatment will be allowed for patients with certain qualifying medical conditions. The UDOH will begin accepting applications for medical cannabis patient cards by March 1, 2020.Patient Access to Medical Marijuana

"Medicinal dosage form’s” include:


·         a gelatinous cube, gelatinous rectangular cuboid, or lozenge in a cube or rectangular cuboid shape

·         a transdermal preparation

·         a tablet

·         a capsule;

·         a concentrated oil

·         a sublingual preparation

·         a topical preparation

Regulations and licensing requirements are coming for an "Industrial hemp certificate", and an "Industrial hemp license" to sell "Industrial hemp product"

The UDOH will be implementing a "Research pilot program"- conducted by the department in collaboration with at least one licensee to study methods of cultivating, processing, or marketing industrial hemp.

There will also be a "Qualified Production Enterprise Fund"- Which I believe has to do with Native American Tribes seeking licensure. Hire me and I’ll find out, LOL.

Capitalization Requirements


The initiative requires Dispensary License applicants to demonstrate they have at least $250,000 "in liquid assets" available to them. That number is $500,000 for each marijuana growing facility license applicant, and $100,000 for those who want a license to run a processing facility or testing laboratory.

Cannabis Business License Types


·         Grower

·         Processor

·         Dispensary

·         Lab Testing Facility

Notice there are no Secure Transporter Licenses. Hmm, Curious.


Cannabis Business Licensing Requirements


These Line Items are Universal Requirements for all License Types:

Security and Surveillance

·         Security must include a video recording system that tracks all handling and processing of cannabis or a cannabis product in the establishment

·         And also preserves compatibility with the state electronic verification system

·         All of which is recorded and backed up onto a dedicated server

Architectural Plans

Description of the physical characteristics of the proposed facility, including a  floor plan and an architectural elevation;

Business Plan

·         Outline of the entire business model, complete with Financials

·         Marketing Plan

·         Staffing Overview

·         Storage Plan Overview

Operations Manual

·         Includes operating procedures that comply with the municipality or county in which the person is located

·         Security Plan Overview (You must also submit a Security Plan)

·         Inventory and Recordkeeping Plan

·         Staffing Plan

·         Operations Plan

·         Storage Plan


Inventory Control

·         Requires using Unique Identifier Tags- After the plant is 8 inches tall and has a rootball, all the way until it is sold.

·         A Seed to Sale Tracking System that maintains in real time a record of the amount of cannabis and cannabis products

·         There will be requirements for aggregate or batch records regarding the planting and propagation of cannabis before being tracked in an inventory  control system

Licensee’s must address record-keeping for the amount of planted seed, number of cuttings taken, date and time of cutting and planting, number of plants established, and number of plants culled or dead.­­


Licensed establishment’s must not be within 1,000 feet of a community location or within 600 feet of an area zoned, primarily for residential use, as measured from the nearest entrance to the cannabis production establishment unless the relevant county or municipality recommends in writing that the department waive the community location proximity limit.

A copy of the applicant's approved application for the local land use permit

True Party of Interest

Applicants must submit to the department:

Proposed name and address of any individual who has:

a financial or voting interest of 2% or greater in the proposed cannabis production establishment; or the power to direct or cause the management or control of a proposed cannabis production establishment


·         Initial License Fee.

·         Annual Renewal Fee.

Co-Location and Usage

Department shall require a separate license for each type of cannabis production establishment and each location of a cannabis production establishment.

The department may issue a cannabis cultivation facility license and a cannabis processing facility license to a person to operate at the same physical location or at separate physical locations.

You can’t get a lab testing license if you are already involved in growing processing, or retail license.

Or if any family members are involved in growing processing, or retail license.


Criminal Background Check

·         The department may not issue a license to operate a cannabis production establishment to an applicant if any individual has been convicted under state or federal 631 law of:

·         A Felony

·         A Drug Related Offense within the last 10 years

·         Or if any family members are involved in growing processing, or retail license

All True Parties of Interest must go through a Full Criminal Background Investigation.

How Long is a License Good For

You have one year to begin cannabis production operations after the day on which the department issues the initial license.

The Department shall begin accepting applications under this part on or before January 1, 2020.


Number of licenses -- Cannabis cultivation facilities. Dispensaries

The department may not issue  more than 10 licenses to operate a cannabis cultivation  facility.

The department may issue up to five licenses to operate a cannabis cultivation facility in addition to the 10 licenses.

7 Medical Dispensary Licenses for Each License


Commercial License Details


Dispensary Licenses

The application fee shall be Two Thousand Five Hundred Dollars ($2,500.00) and a method of payment will be provided on the website.

Retail applicants must all be Utah state residents.

Commercial Grow Licenses

State Department of Health will within thirty (30) days of passage of this initiative, make available, on their website, in an easy to find location, an application for a commercial grower license. The application fee will be Two Thousand Five Hundred Dollars ($2,500.00) and methods of payment will be provided on the website. The Utah State Department of Health has two (2) weeks to review application, approve or reject the application, and mail the approval/rejection letter


·         Applicant must be age twenty-five (25) or older;

·         Any applicant, applying as an individual, must show residency in the state of Utah;

·         All applying entities must show that all members, managers, and board members are Utah residents;

·         An applying entity may show ownership of non-Utah residents, but that percentage ownership may not exceed twenty-five percent (25%};

·         All applying individuals or entities must be registered to conduct business in the state of Utah;

·         All applicants must disclose all ownership;

Applicant(s) with only nonviolent felony conviction(s) in the last two (2) years, any other felony conviction in 5 (years), inmates, or any person currently incarcerated may not qualify for a commercial grower license.

A licensed commercial grower may only sell at the wholesale level to a licensed retailer or a licensed processor. If the federal government lifts restrictions on buying and selling marijuana between states, then a licensed commercial grower would be allowed to sell and buy marijuana wholesale from, or to, an out of state wholesale provider.

Processing License

State Department of Health shall within thirty (30) days of passage of this initiative, make available, on their website, in an easy to find location, an application for a medical marijuana processing license. The application fee shall be Two Thousand Five Hundred Dollars ($2,500.00)

The State has two (2) weeks to review the application, approve or reject the application, and mail the approval/rejection letter

Lab Testing License

A researcher may apply to the Utah Department of Health for a special research license.

Licensee’s are also required to file monthly consumption reports to the Utah Department of Health with amounts of marijuana used for research.



You’ll Never Believe This:

Utah's proposal would not allow pot smoking or for residents to grow their own. Marijuana would be exempt from state and local sales taxes.

Parting Words…

Obtaining a Cannabis Business License in Utah will be no easy feat. Let New Leaf give you the best chance for licensure approval. Contact us Today and Give Us the Details!!! We’d love to help.

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