SALT LAKE CITY — Questions raised in a critical state audit partially focused on the selection process for the firms tabbed last year to get cannabis growing licenses didn’t keep them from getting their paperwork renewed for another year.
The Cannabis Production Establishment Board this week unanimously renewed the growing licenses for the eight firms, including True North, one of the firms mentioned, though not by name, in last month’s audit. The board, part of the Utah Department of Agriculture and Food, or UDAF, met Monday, approving the eight licenses with little comment.
UDAF spokeswoman Caroline Hargraves noted the guidelines governing the license renewal process, in part that licensees must show they are producing cannabis at the levels outlined in their operating plans. Utah lawmakers legalized marijuana for medical use in 2018 and the growers supply the dispensaries that provide medical cannabis to patients. But she didn’t respond to additional queries.
The Nov. 17 audit by the Office of the State Auditor was focused on concerns brought to its attention about UDAF operations during the tenure of former UDAF Commissioner Kerry Gibson, from April 2019 until January 2020. The report outlined weak points in UDAF’s “control environment” that it said resulted in misuse of public funds, noting excessive overtime payments to one staffer and Gibson’s “inappropriate” use of a state vehicle, among other things. Gibson is a former Weber County commissioner.
The audit also put a big focus on the process UDAF followed in selection of the firms that ended up getting cannabis growing licenses. The report didn’t point the finger at True North or any other firm but rather at possible “scoring collaboration” pushed by “senior management” at UDAF when evaluating the license applicants that seemed to benefit three of the companies, including True North. It also noted a visit by Gibson to a True North principal as the firm was vying for the license. Though Gibson didn’t take part in the formal evaluation process, the audit said he showed “poor judgement” in making the trip.
True North has growing operations in Box Elder County and a cannabis dispensary in South Ogden, called Perfect Earth Modern Apothecary.
Logan Wilde now serves as UDAF commissioner and in response to the audit last month he outlined numerous efforts the department has launched to address the issues it brought up. The process for granting cannabis cultivating licenses has changed, he said, but in response to the state auditor’s recommendation to “reassess the licenses awarded,” he noted the investment the growing companies had already made.
In light of the capital they’ve spent, he said, revoking any licenses could have a big impact on the growers themselves, medical cannabis providers and patients.
In her message to the Standard-Examiner, Hargraves said UDAF won’t renew any licenses unless the companies that have them “strictly” follow applicable laws and rules. The licenses come up for routine review each year.
Hargraves also reiterated that UDAF has asked “a third party to review processes for potential irregularities,” but didn’t provide any details about the status of the initiative.
In the report on True North at Monday’s meeting, a UDAF rep noted relatively minor compliance issues involving the firm, same as with some of the other growers. The True North issues were addressed with “easy fixes,” he said. The firm has harvested 1,528 pounds of cured cannabis so far this year and expected to bolster that by 432% in 2021.
Two firms grow cannabis in Weber County, Zion Cultivars and Harvest of Utah. As with the other firms, their licenses were approved for 2021 in Monday’s action.
True North reps didn’t respond to Standard-Examiner queries seeking comment.