For security and public relations reasons, Troy Young will not identify the location of the out-of-the-way field where he’s constructing a greenhouse the size of a Walmart.
It is possible that within a few months, this building will be filled with the leaves, stems and buds of one of the first legal cannabis crops in Utah. His chances are roughly 1 in 8 — as his business, Moon Lake Farms, competes with 80 others for a handful of marijuana cultivation licenses.
“I’ve always wanted to get involved in this. I mean, there’s a financial opportunity and then, it’s also ... kind of a fun business,” said Young, a Salt Lake City entrepreneur with a penchant for new ventures.
The Utah Department of Agriculture and Food put out its request for would-be cannabis farmers in late May and after a month had received 81 license applications — the largest response it has ever received to any one solicitation. Still, some industry onlookers were underwhelmed by the level of interest in the 10 grower licenses permitted by Utah’s new cannabis law.
“I think it’s smaller than in other places, probably just because of the unique climate of Utah,” said Tom Paskett, executive director of the Utah Cannabis Association.
And by climate, he continued, he doesn’t mean the growing conditions.
“I think there’s still some social and cultural buy-in the industry is going to have to work on doing,” he said.
Utah’s voters last year narrowly passed a medical cannabis ballot initiative, over the objections of powerful state interests such as The Church of Jesus Christ of Latter-day Saints. State legislators swiftly replaced the initiative with a more restrictive medical marijuana law that, among other things, reduced the initial number of cultivation licenses from 15 to 10.
A spokesperson with the state’s agriculture department said it expects to award the 10 licenses later this month, and stakes in that announcement are high for applicants who have poured time, energy and money into the business opportunity.
"There's going to be 71 applicants that are really upset," said Darren Johnson, a Saratoga Springs businessman who applied for a cultivation license.
Johnson, who owns a hemp processing company called Wasatch Extraction, described the recent application process as “all-encompassing.”
"It's all I've thought about for the last month," he said this week.
Originally from Oregon, Johnson said he’s long recognized the value of cannabis as a medical treatment and a safer alternative to opioids, having witnessed how the use of prescription painkillers can spiral into addiction. One of his former bosses got hooked on OxyContin after suffering a back injury and began stealing from the company till to feed his dependency, ultimately losing both his job and family.
Young, too, has personal motivations for forging into the medical marijuana industry, saying his mother died of an opioid overdose about 25 years ago.
He’s already broken into farming with hemp, raising his plants based on information gleaned from YouTube and a special method he invented on his own. Inside a squat North Salt Lake building — again, he doesn’t want to publicize the exact location — the hemp plants stand waist-high and are almost ready for transformation into CBD products. If Young and his Moon Lake Farms doesn’t score one of the cannabis cultivation licenses, he’ll focus on expanding his hemp farming business, he said.
The state is refusing to identify the 81 cultivation applicants, claiming their names are protected information under Utah’s public records law, but will release information on the license winners. Eight of the applicants reported a business address outside Utah, an agriculture department spokesman said.
J.D. Lauritzen, a cannabis law attorney based in Salt Lake City, said the emergence of the new industry is creating economic opportunities for the state’s farmers and entrepreneurs. But it remains to be seen whether out-of-state “Big Canna” companies — which often boast longer resumes and deeper pockets — will dominate Utah’s emerging market.
The state’s scoring system for evaluating the applications does award points based on community ties and a business’s plans to “build a positive connection to the local community in which you are based.”
“At least it was in the scoring system, right?” Lauritzen said.
Controversy has swirled around this selection process in some states, especially when a crowd of entrepreneurs are squabbling over a small handful of licenses, he added. Disgruntled cannabis retailers in Nevada even filed a lawsuit alleging the state’s selection process was biased and lacked transparency.
Sore feelings about the licensing outcome are also probable in Utah, considering the time and money applicants have invested, Lauritzen said.
Young said it took four of his employees two months to prepare the 400-page application. A consulting company would’ve charged him between $100,000 and $180,000 to get the submission ready, he said. Johnson said that’s consistent with the quotes he’s received, as well.
The application fee alone was $2,500 and he’ll have to spend another $100,000 per year on the license, assuming the state picks him as one of the 10 cultivators.
Young has also bought 15 acres of land where he’s building his 100,000-square-foot greenhouse for raising cannabis plants. Johnson has also selected a site for his potential grow outfit, and neither he nor Young is anticipating much municipal resistance if the state does green-light their cultivation businesses.
Lauritzen said he’s heard some in the industry are steering clear of Utah County, fearing it might be unfriendly to an incoming cannabis business; while 53% of voters statewide supported last year’s medical marijuana ballot initiative, only 35% of Utah County voters were in favor of it.
As a former nightclub owner, Young said he’s familiar with running a business that comes under heavy regulation in the conservative state.
“The difference between this and a nightclub is that when they come and inspect your nightclub, they come as undercover cops,” Young said.
Young and Johnson said the state has set an aggressive timeline for its chosen cannabis growers — they’re hoping to have the product available by early next year. To meet that deadline, both applicants had to get the ball rolling ahead of time, despite the risk that they wouldn’t be among the 10 winners.
“We knew that ... there was going to be a time crunch on things. And so we wanted to get things kind of in the works prior to actually getting the license,” Johnson said. “And so if we get the license, we can just pull the trigger and be on our way.”
The state will next solicit applicants for cannabis processing and pharmacy licenses.
