Chris Fontes says he once procured a Heber City business license within about six days. Recently, the state turned around his application for an industrial hemp growing license in about a week, he says.
But it’s been some 40 days since he submitted a business license application to South Salt Lake, and he and his business partner are still waiting for approval.
The owners of Meraki Farms, a company looking to grow hemp, say they feel like South Salt Lake’s officials have been dragging their feet processing this paperwork. Fontes and his business partner, Robert Allen, suspect the delay has to do with the nature of their business — although they know of nothing in South Salt Lake’s law that would preclude a hemp grower from settling in the city.
“If I wanted to go in there and grow indoor lettuce, I don’t think it would be a problem,” Allen said. “I would’ve already had my license.”
Their struggles are shared by other Utah cannabis businesses that are searching for a place to put down roots, according to J.D. Lauritzen, an attorney who’s been advising some of these entrepreneurs and has spoken with Fontes. The recent special session of the Legislature on medical cannabis addressed some of these problems by requiring municipalities to permit medical marijuana businesses within appropriate areas.
However, Lauritzen said state law is less forceful when it comes to hemp, the non-psychoactive form of cannabis.
“These same types of heavy-handed rules don’t really exist on the hemp side of things,” the Salt Lake City attorney said. “So it’s really up to the local ordinance and sometimes the discretion of these local municipalities.”
(Trent Nelson | Tribune file photo) Keith Keyser, founder of Moon Lake Farms, working with hemp seedlings in North Salt Lake, July 12, 2019.
South Salt Lake City Councilman Shane Siwik said he doesn’t understand the holdup in processing Fontes’ application.
"I'm aware of what he's going through, and as far as I know, other business license applications do not take this long," he said.
Siwik said there’s little the council can do to streamline the licensing process but believes Mayor Cherie Wood’s administration should be concerned that Fontes and Allen have started to consult with an attorney.
"The reality is, if I was getting that kind of runaround, I'd probably take legal action, too," Siwik said.
But a South Salt Lake spokeswoman said the processing time isn’t completely out of the ordinary, especially because some city departments are working with reduced staff right now.
“Given how busy they are it’s not unusual,” Lindsey Ferrari, the city spokeswoman, said.
Tom Paskett, executive director of the Utah Cannabis Association, said the review time does seem excessive, adding that he isn’t aware of any other hemp growers who have run into the delays and difficulties reported by Fontes and Allen.
“This deal with Meraki Farms has been the climax so far,” he said.
Fontes, who’s also CEO of another company that facilitates wholesale buying and selling of hemp, said he runs the business side of Meraki Farms, while Allen will handle the growing. Their goal is to cultivate hemp inside a roughly 1,000-square-foot warehouse that they’ve been renting on West Temple.
The licensing delay has put them behind schedule in opening their business and generating revenue to pay rent and cover their own salaries, they said. Allen, who moved to Utah from California earlier this year for the venture, has had to find a different job to tide him over.
“We’re a month-and-a-half behind on growing," Allen said.
Fontes and Allen first applied for a business license from South Salt Lake on Sept. 10 but had to resubmit using a different form. City officials then directed them to turn in FBI background checks for each business owner, a requirement that Fontes said he couldn’t find anywhere in city ordinances. And he argues asking for the check could be unconstitutional, if the city is arbitrarily treating him differently from other license applicants.
"Can you deny a business license because of something you find in that background check?" he asked city council members during a September meeting. "I find it highly inappropriate to ask for that sort of thing."
Lauritzen also called the city’s request potentially problematic.
"If they are being asked to do something that's not required of other people, there's potential for an equal protection violation," the attorney said. "Basically, you're treating one group differently than you'd treat another group under the law."
Ferrari said the city’s code does allow for officials to request criminal background checks.
Fontes ended up supplying the FBI checks, but the problems continued even afterward, he said. For about six weeks since then, every time he asks for an update from the city, he’s gotten the same answer — that his application is in a queue and will be processed in the order received.
“I don’t want to cause a big fuss, but I do intend to get our business license as legally allowed,” he said.
