A new lawsuit in Utah is challenging the state’s 2019 medical cannabis cultivation licensing process.
JLPR LLC, one of the unsuccessful applicants for one of the state’s eight grower licenses, alleges in a July 19 filing that multistate operators had an unfair advantage and that state officials coached certain applicants on how to secure licenses, according to The Salt Lake Tribune.
The Utah Department of Agriculture and Food (UDAF) awarded eight cultivation licenses in 2019 in a process that the lawsuit says was marred with corruption as regulators allowed personal connections to influence the licensing process.
JLPR says that while only Utah-based companies were originally eligible for cultivation licenses, UDAF made a last-minute rule change that allowed out-of-state operators to apply for the licenses, and the lawsuit alleges that the out-of-state applicants knew about the impending rule change ahead of time, The Salt Lake Tribune reported. The lawsuit points to the fact that four of the eight licenses went to multistate operators as proof.
JLPR also notes in its complaint that former UDAF Deputy Commissioner Scott Ericson left his position shortly before the application deadline and began working as a consultant for Ohio-based Standard Wellness, which ultimately secured one of the cultivation licenses, The Salt Lake Tribune reported.
The lawsuit also cites a November 2020 audit of the UDAF’s cannabis cultivation licensing process, which ultimately recommended that the department reassess the eight licenses that were awarded. Instead, UDAF renewed all eight licenses shortly after the audit, according to The Salt Lake Tribune.
In the past, JLPR appealed to UDAF and to the Utah Division of Purchasing and Global Services, which both denied the company’s complaint, the news outlet reported. JLPR then pursued legal recourse with the Utah Court of Appeals, which rejected its case earlier this year.
In its current lawsuit, JLPR is asking the court to order UDAF to grant it a cultivation license immediately or to award the company a license when the next ones become available, The Salt Lake Tribune reported. JLPR is also seeking unspecified monetary damages to cover lost profits, as well as attorney and consulting fees.