Utah Cannabis Legalization

Utah Proposition 2, the Medical Marijuana Initiative was on the ballot in Utah as an initiated state statute on November 6, 2018. Gov. Gary Herbert signed the measure into law on December 3, 2018.

The bill allows up to 14 cannabis dispensaries and 8 cultivation licenses. According to the rules for Utah’s new medical cannabis program, the state charges $2,500 application fee and an additional $50,000-$69,000 annual licensing fee for retailers and $100,000 for cultivators.

How to Start a Cannabis Business in Utah?

Only the following forms are available in the Utah cannabis market: tablet; capsule; concentrated oil; liquid suspension; transdermal preparation; gelatinous cube; unprocessed cannabis flower in a blister pack containing no more than one gram of flower pods in each individual blister; wax or resin. Utah law prohibits the smoking of cannabis, as well as candy, cookies, cakes, and other foods.

Utah Cannabis Licensing

Processors in Utah are responsible for dry, cure, extraction, refinement, formulation, packaging, and labeling of medical cannabis products. There are two tiers of processing:

• A Tier 1 Processing License allows a facility to process, formulate, package, and label products.
• A Tier 2 License allows a facility to packaging and labeling or products.

Currently Utah is not restricting the number of processing licenses. All medical cannabis processing facilities must comply with quality assurance testing, and obtain a good manufacturing permit from UDAF’s Regulatory Services. There are currently 14 Tier 1 processors and 1 Tier 2 processor.

In 2020, the Utah Department of Agriculture and Food and the Utah Division of Purchasing selected eight companies to be Medical Cannabis Cultivators in Utah’s Medical Cannabis Program. The Utah Department of Agriculture follows 4-41a-205 and to not exceed 8 Cannabis Cultivation Facility Licenses unless all Cultivators reach their 100,000 sq. ft. grow limit, the Utah Department of Health anticipates a greater patient need, or a current company forfeits their license.

Utah Cannabis Market

Utah’s first medical cannabis dispensary opened on March 2, 2020. There are currently 15 licensed medical cannabis pharmacies in operation with locations in North Logan, Brigham City, South Ogden, West Bountiful, Park City, Salt Lake City, South Jordan, Lehi, Provo, Price, Springville, Payson, Cedar City, and St. George. Medical cannabis home delivery became available for the first time in January 2021 and in 2023, the number of orders delivered by medical cannabis pharmacies to cardholders’ homes reached 17,000 per month. Net sales revenue exceeded $20 million per quarter in 2021 and totaled almost $75 million, up from $22 million in the first year. 2022 brought in almost $120 million in medical cannabis sales, with quarterly sales rising to over $38 million in 2023 resulting in over $143 million of annual sales.

The number of medical cannabis cardholders with active status increased sevenfold from 2020 (11,000) to 2023 (77,644). As of February 2024, there were 81,267 registered patients and the number of patients is projected to be between 100,000 and 180,000 within a few years.

Cannabis consumers in Utah spent most of their dollars (45%) on cartridges. Flower, the next largest share of the cannabis sales, captured 33%. Infused edibles, with 20%, came in third.  Other products categories and accessories represented less than 2% of the marketplace.

Utah Cannabis Market Infographics

Utah Hemp Industry