Scammers are a creative bunch. They are always looking for an open door; an opportunity to help people unwittingly part with their money. Indeed, no industry is immune from scammers. Not even the state-legal marijuana industry. Any pot entrepreneur looking to make it big in marijuana needs to be aware that the scammers are out there.

An excellent case in point is the most recent scam making the rounds in Utah. The scam promises a license to anyone convicted of a marijuana crime who wants to open a marijuana dispensary in the Beehive State. Unsuspecting entrepreneurs may throw their money on the table with the expectation of getting a license potentially worth millions in retail sales. They will not find out until it’s too late that no license is actually coming.

All Utah Licenses Already Issued

Utah law is very specific in terms of the number of legally allowed licenses for both pharmacies and growing operations. It is also a medical-only state, so Utah do not refer to retail outlets as dispensaries. They are medical cannabis pharmacies.

The state has only approved 15 medical cannabis pharmacy licenses to date. All fifteen have been issued. That means new entrepreneurs will not be able to get a pharmacy license unless one of two things happens:

• A current pharmacy owner chooses to give up or not renew its license; or
• State lawmakers decide to issue additional licenses down the road.

In addition to the requirement that all medical cannabis pharmacies in Utah be licensed, state law also requires that all cannabis products sold in licensed pharmacies be derived from plant material grown in Utah. This could be tricky for in global brand like Cookies. The brand is poplar enough that Brigham City’s Beehive Farmacy recently added it to their inventory. But to sell in Utah, Cookies needs to have some sort of presence in the state.

Too Good to Be True

The Utah scam is being perpetrated by way of flyers and advertisements being distributed to unsuspecting consumers. Like any other scam, what the flyers and advertisements purport to offer is too good to be true – if you know what the law says. Anyone familiar with Utah’s licensing regulations already knows that the state isn’t issuing any more pharmacy licenses. But someone who doesn’t know the law could easily be fooled.

The licensing scam is just one example. There are many others. Another potential scam that actually has nationwide implications involves not being truthful about the ingredients in a given product. This sort of scam is made possible by a surprising lack of labeling requirements.

A company might claim that one of its products contains so much THC by volume. But because labeling and testing requirements do not meet up in any meaningful way, there is no way to know for sure. How do consumers really know what they are getting? How do dispensary and pharmacy owners really know what they are selling?

Dishonest People in Every Industry

None of this is to suggest that it’s impossible to make an honest living in the marijuana industry. None of this is to say that getting scammed is a virtual guarantee. You can make money and avoid scams at the same time. It is mostly a matter of educating yourself in the law and knowing what to look out for.

Take your time to do things right and you should be okay. But rush in without making the effort to verify the opportunities you are being offered and you run the risk of being scammed. It is like anything else. Caution and pragmatism when the day.