§ 4-41a-201 — Cannabis production establishment -- License.

(1) Except as provided in Subsection (14), a person may not operate a cannabis production establishment without a license that the department issues under this chapter.
(2) (2)(a) (2)(a)(i) Subject to Subsections (6), (7), (8), and (13) and to Section 4-41a-205, for a licensing process that the department initiates after March 17, 2021, the department, through the licensing board, shall issue licenses in accordance with Section 4-41a-201.1.
(2)(a)(ii) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the department shall make rules to specify a transparent and efficient process to:
(2)(a)(ii)(A) solicit applications for a license under this section;
(2)(a)(ii)(B) allow for comments and questions in the development of applications;
(2)(a)(ii)(C) timely and objectively evaluate applications;
(2)(a)(ii)(D) hold public hearings that the department deems appropriate; and
(2)(a)(ii)(E) select applicants to receive a license.
(2)(a)(iii) The department may not issue a license to operate a cannabis production establishment to an applicant who is not eligible for a license under this section.
(2)(b) An applicant is eligible for a license under this section if the applicant submits to the licensing board:
(2)(b)(i) subject to Subsection (2)(c), a proposed name and each address, located in a zone described in Subsection 4-41a-406(2)(a) or (b), where the applicant will operate the cannabis production establishment;
(2)(b)(ii) the name and address of any individual who has:
(2)(b)(ii)(A) for a publicly traded company, a financial or voting interest of 10% or greater in the proposed cannabis production establishment;
(2)(b)(ii)(B) for a privately held company, a financial or voting interest in the proposed cannabis production establishment; or
(2)(b)(ii)(C) the power to direct or cause the management or control of a proposed cannabis production establishment;
(2)(b)(iii) an operating plan that:
(2)(b)(iii)(A) complies with Section 4-41a-204;
(2)(b)(iii)(B) includes operating procedures that comply with this chapter and any law the municipality or county in which the person is located adopts that is consistent with Section 4-41a-406; and
(2)(b)(iii)(C) the department or licensing board approves;
(2)(b)(iv) a statement that the applicant will obtain and maintain a liquid cash account with a financial institution or a performance bond that a surety authorized to transact surety business in the state issues in an amount of at least:
(2)(b)(iv)(A) $100,000 for each cannabis cultivation facility for which the applicant applies; or
(2)(b)(iv)(B) $50,000 for each cannabis processing facility or independent cannabis testing laboratory for which the applicant applies;
(2)(b)(v) an application fee in an amount that, subject to Subsection 4-41a-104(5), the department sets in accordance with Section 63J-1-504; and
(2)(b)(vi) a description of any investigation or adverse action taken by any licensing jurisdiction, government agency, law enforcement agency, or court in any state for any violation or detrimental conduct in relation to any of the applicant's cannabis-related operations or businesses.
(2)(c) (2)(c)(i) A person may not locate a cannabis production establishment:
(2)(c)(i)(A) within 1,000 feet of a community location; or
(2)(c)(i)(B) in or within 600 feet of a district that the relevant municipality or county has zoned as primarily residential.
(2)(c)(ii) The proximity requirements described in Subsection (2)(c)(i) shall be measured from the nearest entrance to the cannabis production establishment by following the shortest route of ordinary pedestrian travel to the property boundary of the community location or residential area.
(2)(c)(iii) The licensing board may grant a waiver to reduce the proximity requirements in Subsection (2)(c)(i) by up to 20% if the licensing board determines that it is not reasonably feasible for the applicant to site the proposed cannabis production establishment without the waiver.
(2)(c)(iv) An applicant for a license under this section shall provide evidence of compliance with the proximity requirements described in Subsection (2)(c)(i).
(3) If the licensing board approves an application for a license under this section and Section 4-41a-201.1:
(3)(a) the applicant shall pay the department an initial license fee in an amount that, subject to Subsection 4-41a-104(5), the department sets in accordance with Section 63J-1-504; and
(3)(b) the department shall notify the Department of Public Safety of the license approval and the names of each individual described in Subsection (2)(b)(ii).
(4) (4)(a) Except as provided in this Subsection (4), a cannabis production establishment shall obtain a separate license for each type of cannabis production establishment and each location of a cannabis production establishment.
(4)(b) The licensing board 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.
(4)(c) A cannabis cultivation facility may operate at two addresses under a single license.
(4)(d) A tier one cannabis processing facility may operate at a second address under the same tier one license if:
(4)(d)(i) the second address is co-located at a cannabis cultivation facility operated by the same licensee; and
(4)(d)(ii) the licensee pays a fee of $70,000 for the second location.
(4)(e) An applicant for a tier two cannabis processing facility license that has a cannabis cultivation facility license and intends to process cannabis at the cannabis cultivation facility shall pay a fee of $25,000 for the tier two cannabis processing facility license.
(5) If the licensing board receives more than one application for a cannabis production establishment within the same city or town, the licensing board shall consult with the local land use authority before approving any of the applications pertaining to that city or town.
(6) The licensing board may not issue a license to operate an independent cannabis testing laboratory to a person who:
(6)(a) holds a license or has an ownership interest in a medical cannabis pharmacy, a cannabis processing facility, or a cannabis cultivation facility;
(6)(b) has an owner, officer, director, or employee whose family member holds a license or has an ownership interest in a medical cannabis pharmacy, a cannabis processing facility, or a cannabis cultivation facility; or
(6)(c) proposes to operate the independent cannabis testing laboratory at the same physical location as a medical cannabis pharmacy, a cannabis processing facility, or a cannabis cultivation facility.
(7) The licensing board may not issue a license to operate a cannabis production establishment to an applicant if any individual described in Subsection (2)(b)(ii):
(7)(a) has been convicted under state or federal law of:
(7)(a)(i) a felony in the preceding 10 years; or
(7)(a)(ii) after December 3, 2018, a misdemeanor for drug distribution;
(7)(b) is younger than 21 years old; or
(7)(c) after September 23, 2019, until January 1, 2023, is actively serving as a legislator.
(8) (8)(a) If an applicant for a cannabis production establishment license under this section holds a license under Title 4, Chapter 41, Hemp and Cannabinoid Act, the licensing board may not give preference to the applicant based on the applicant's status as a holder of the license.
(8)(b) If an applicant for a license to operate a cannabis cultivation facility under this section holds a license to operate a medical cannabis pharmacy under this title, the licensing board may give consideration to the applicant based on the applicant's status as a holder of a medical cannabis pharmacy license if:
(8)(b)(i) the applicant demonstrates that a decrease in costs to patients is more likely to result from the applicant's vertical integration than from a more competitive marketplace; and
(8)(b)(ii) the licensing board finds multiple other factors, in addition to the existing license, that support granting the new license.
(9) The licensing board may revoke a license under this part:
(9)(a) if the cannabis production establishment does not begin cannabis production operations within one year after the day on which the licensing board issues the initial license;
(9)(b) after the third of the same violation of this chapter in any of the licensee's licensed cannabis production establishments or medical cannabis pharmacies;
(9)(c) if any individual described in Subsection (2)(b) is convicted, while the license is active, under state or federal law of:
(9)(c)(i) a felony; or
(9)(c)(ii) after December 3, 2018, a misdemeanor for drug distribution;
(9)(d) if the licensee fails to provide the information described in Subsection (2)(b)(vi) at the time of application, or fails to supplement the information described in Subsection (2)(b)(vi) with any investigation or adverse action that occurs after the submission of the application within 14 calendar days after the licensee receives notice of the investigation or adverse action;
(9)(e) if the cannabis production establishment demonstrates a willful or reckless disregard for the requirements of this chapter or the rules the department makes in accordance with this chapter;
(9)(f) if, after a change of ownership described in Subsection (15)(b), the board determines that the cannabis production establishment no longer meets the minimum standards for licensure and operation of the cannabis production establishment described in this chapter;
(9)(g) for an independent cannabis testing laboratory, if the independent cannabis testing laboratory fails to substantially meet the performance standards described in Subsection (14)(b); or
(9)(h) if, following an investigation conducted pursuant to Subsection 4-41a-201.1(11), the board finds that the licensee has participated in an anticompetitive business practice.
(10) (10)(a) A person who receives a cannabis production establishment license under this chapter, if the municipality or county where the licensed cannabis production establishment will be located requires a local land use permit, shall submit to the licensing board a copy of the licensee's approved application for the land use permit within 120 days after the day on which the licensing board issues the license.
(10)(b) If a licensee fails to submit to the licensing board a copy of the licensee's approved land use permit application in accordance with Subsection (10)(a), the licensing board may revoke the licensee's license.
(11) The department shall deposit the proceeds of a fee that the department imposes under this section into the Qualified Production Enterprise Fund.
(12) The department shall begin accepting applications under this part on or before January 1, 2020.
(13) (13)(a) The department's authority, and consequently the licensing board's authority, to issue a license under this section is plenary and is not subject to review.
(13)(b) Notwithstanding Subsection (2)(a)(ii)(A), the decision of the department to award a license to an applicant is not subject to:
(13)(b)(i) Title 63G, Chapter 6a, Part 16, Protests; or
(13)(b)(ii) Title 63G, Chapter 6a, Part 17, Procurement Appeals Board.
(14) (14)(a) Notwithstanding this section, the department:
(14)(a)(i) may operate or partner with a research university to operate an independent cannabis testing laboratory;
(14)(a)(ii) if the department operates or partners with a research university to operate an independent cannabis testing laboratory, may not cease operating or partnering with a research university to operate the independent cannabis testing laboratory unless:
(14)(a)(ii)(A) the department issues at least two licenses to independent cannabis testing laboratories; and
(14)(a)(ii)(B) the department has ensured that the licensed independent cannabis testing laboratories have sufficient capacity to provide the testing necessary to support the state's medical cannabis market; and
(14)(a)(iii) after ceasing department or research university operations under Subsection (14)(a)(ii) shall resume independent cannabis testing laboratory operations at any time if:
(14)(a)(iii)(A) fewer than two licensed independent cannabis testing laboratories are operating; or
(14)(a)(iii)(B) the licensed independent cannabis testing laboratories become, in the department's determination, unable to fully meet the market demand for testing.
(14)(b) (14)(b)(i) The department shall make rules, in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, to establish performance standards for the operation of an independent cannabis testing laboratory, including deadlines for testing completion.
(14)(b)(ii) A license that the department issues to an independent cannabis testing laboratory is contingent upon substantial satisfaction of the performance standards described in Subsection (14)(b)(i), as determined by the board.
(15) (15)(a) A cannabis production establishment license is not transferrable or assignable.
(15)(b) If the ownership of a cannabis production establishment changes by 50% or more:
(15)(b)(i) the cannabis production establishment shall submit a new application described in Subsection (2)(b), subject to Subsection (2)(c);
(15)(b)(ii) within 30 days of the submission of the application, the board shall:
(15)(b)(ii)(A) conduct the application review described in Section 4-41a-201.1; and
(15)(b)(ii)(B) award a license to the cannabis production establishment for the remainder of the term of the cannabis production establishment's license before the ownership change if the cannabis production establishment meets the minimum standards for licensure and operation of the cannabis production establishment described in this chapter; and
(15)(b)(iii) if the board approves the license application, notwithstanding Subsection (3), the cannabis production establishment shall pay a license fee that the department sets in accordance with Section 63J-1-504 in an amount that covers the board's cost of conducting the application review.

Legislative History

Amended by Chapter 414, 2025 General Session