Marijuana MSOs given leg up for cultivation permits, Utah lawsuit alleges

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A lawsuit in Utah claims that out-of-state marijuana companies were given preference during the application process for eight medical cannabis cultivation licenses the state awarded in 2019.

According to The Salt Lake Tribune, the federal complaint alleges officials at the Utah Department of Agriculture and Food coached multistate marijuana growers on how to succeed in the application process.

The suit, filed by JLPR, also alleges those officials allowed their personal connections to affect their judgment in the scoring process.

“This [bias] in the selection process, directly resulting from improper connections, has harmed Utah patients, violated the law, and violated JLPR’s due process and equal protection rights,” the complaint charges.

JLPR is asking the court to order state regulators to grant the company a cultivation permit or “put it first in line for a license when the next one becomes available,” the Tribune reported. JLPR also is seeking unspecified monetary damages.

State regulators told the newspaper they have not seen the suit and have no comment on the allegations.

One key contention in the lawsuit: The state made a last-minute change to its licensing rules that allowed out-of-state companies to apply.

At first, only Utah-based businesses were permitted to apply for licenses.

The suit alleges several multistate operators applied for the licenses before the rule change. That’s why JLPR believes out-of-state companies were given inside information, considering how long it takes to put together a business application.

JLPR and five other companies that didn’t receive licenses filed an appeal in 2019, but the appeal was denied.