Last week, when eight companies were chosen to grow medical cannabis in Utah, 73 applicants were left without. One grower already filed a lawsuit, and according to one industry leader, more will probably go to court soon.
“Almost every single state has triggered lawsuits from losing applicants, practically none have been successful. It does create some controversy and some traction," said Avis Bulbulyan, the CEO of SIVA enterprises, a cannabis business development firm that helps growers get licenses.
He says most of the eight growers selected already have successful operations in other states and Canada, keeping most local growers out of the game.
“They’re credible, they have other state operations going on, they have actually implemented the process," he said. "So for Utah, if you’re a regulator, you think ‘okay who do I pick’ where their growth is going to be accelerated, they’re going to be able to service the market demand, and we don’t have to wait for them to fix the kinks in their operation. They’re ready to go, they just need the license.”
Bulbulyan said just to apply for licenses, growers need to be able to prove their business would work, but for local growers — as long as they have been lawful — they’ve never grown cannabis before.
In order to compete with California and Colorado companies, Bulbulyan said they end up in hundreds of thousands of dollars in debt. He says it is likely the eight licenses will be transferred and sold, and most growers can expect a second round of licenses in a year or so.
Whatever happens with Utah’s young cannabis industry, Bulbulyan said: “It’s just the tip of the iceberg."
