Utah Company Claims the State Did Not Award Marijuana Cultivation Licenses Fairly

JLPR LLC claimed in a complaint on Monday against the Utah Department of Agriculture and Food, the state of Utah, and others that its application to be approved to cultivate marijuana under the state’s recent medical marijuana laws was not treated fairly. The company alleged that the regulators gave the limited number of licenses to the candidates they preferred, altering scores based on personal biases.

Medical marijuana was approved in Utah through a voter initiative in 2018, and the Utah Legislature refined and approved the law in 2019 agreeing to give initially 10 and later eight cultivation licenses. The plaintiff alleged that this limited number made the licenses “extremely valuable” noting that one company was sold after obtaining the license “for millions of dollars.”

JLPR explained that it applied for the license, but was not awarded one “due to a variety of improper conflicts of interest, scoring irregularities, scoring collusion among evaluators, alteration of evaluators’ scores to align with senior management’s favored companies, biases, failures to follow the law, and other failures.” 

The plaintiff appealed the denial of its license, but the appeal was also denied after the board said that the company did not provide evidence to support its claims. The company argued in the complaint that its appeal was denied ”without support or discussion” and that the panel “simply ignored the evidence and facts provided by JPLR.”

To support the allegations, JLPR cited documents that it obtained through open records laws which it claimed shows “widespread bias, conflicts, errors, failures to follow the law, and other problems.” The petition also cited an audit from the Utah Office of the State Auditor published in November 2020 which found concerns with the Utah Department of Agriculture and Food’s administration, control, and independence. The report included a formal recommendation that the license awards should be reassessed. 

JLPR specifically alleged that the defendants violated the due process and equal protection clauses in the United States and Utah constitutions, denied it access to courts, and violated Utah laws set out regarding how the licenses should be awarded.  The plaintiff asked for an injunction requiring the defendants to grant it a license to cultivate medical marijuana or enjoin it from awarding any other licenses until it receives a license, as well as damages for lost profits and fees associated with consultants and the court case. 

JLPR is represented by Price Parkinson & Kerr. Defendants included the Utah Department of Agriculture and Food, Utah, the Utah Division of Purchasing and General Services, Standard Wellness Utah LLC, True North of Utah LLC, and various individuals.