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Lawsuit filed over Utah's medical cannabis cultivation licenses

Marijuana Legalization
Posted at 4:12 PM, Jul 20, 2021
and last updated 2021-07-20 18:12:39-04

SALT LAKE CITY  — A lawsuit has been filed over Utah's medical cannabis cultivation system by a company that was rejected for a license.

JLPR Inc. filed the lawsuit over the weekend against Utah's Department of Agriculture and Food, including former agency officials involved in the medical cannabis program, state purchasing officials and even rival companies.

"The corruption and other problems in the selection and agency appeal process were a gross violation of JLPR’s due process and equal protection rights," the lawsuit, filed in U.S. District Court, states.

In 2018, Utah voters approved Proposition 2, which legalized medical marijuana. The Utah State Legislature overrode the voter-approved ballot initiative, creating a tightly-regulated system. In 2019, UDAF had 10 cannabis cultivation licenses to offer. It only issued eight, triggering a series of protests from companies who were rejected.

The lawsuit accuses UDAF officials of improperly influencing the bid process for a coveted cultivation license. It also claims the process was rushed, requirements were changed to favor certain companies over others, and there were conflicts of interest in license evaluators and improper communication between state agriculture officials and the companies seeking a license.

"A bias toward out-of-state applicants is obvious on the face of the selection," JLPR attorney Jason Kerr wrote in the lawsuit.

JLPR cites an audit conducted by Utah State Auditor John Dougall that found conflicts and improper communication in the cultivation license process. Dougall's audit went so far as to recommend UDAF scrap its licensing process and start over.

But JLPR lost its prior protest and appeals over not getting a license. The Utah Court of Appeals previously rejected the company's efforts to undo the cultivation license process.

"We do not have any comment at this time as we have not received nor been able to review these complaints," Utah agriculture commissioner Craig Buttars said in a statement to FOX 13 on Tuesday.

The lawsuit asks a federal judge to grant JLPR a license or order the state to not renew any other company's license until they get one.