Applications for Kentucky’s emerging medical cannabis market may have trickled in since the beginning of the month, but state officials and local advocates optimistically expect an influx coming in August.
Kentucky’s medical cannabis law, signed by Gov. Andy Beshear in March 2023, officially takes effect on Jan. 1, 2025. After which, patients will be able to use edibles, oils, tinctures and raw plant material. Interestingly, the state regulations specify that patients are not allowed to consume the raw plant material by smoking.
The application period opened July 1. Within the first six hours, eight applications were received, according to Stephanie French, spokesperson for the Cabinet for Health and Family Services, which oversees the state’s upcoming medical cannabis market. As of July 22, the total was 18, with 11 dispensary applications, two processor applications and five cultivators.
The application window closes Aug. 31.
The initial round of licenses will include 48 dispensaries, 10 processors and 16 cultivators, broken up into three tiers depending on canopy size. Tier 1 will get 10 licenses, Tier 2 gets four and Tier 3 will get two. The state also plans to issue Tier IV cultivation and producer licenses, but not in this initial licensing round.
Despite the relatively low number of applications so far, French noted that the state’s online application portal had 511 registered accounts as of July 22.
“The office has received significant interest from prospective cannabis business licensees,” she said.
The first set of licenses will be chosen through lottery, although the state will not conduct a lottery if the number of eligible applicants for a license type doesn’t exceed the total allocation for that type. Lotteries, if needed, will be held in October.
Capital, real estate requirements hold applicants back
The need for real estate and liquid capital, which includes $150,000 for dispensaries or processors and between $50,000 and $500,000 for cultivators, depending on their license tier, are the two largest barriers for applicants, according to C.J. Parker, founder of Cannamercial Realty Group, which specializes in assisting cannabis operators in finding business sites.
“People are still going through the weeds and trying to make sure they have everything in place because you have to have the capital and the real estate before you even are entered into the lottery,” he said.
Despite those concerns, Parker, like state officials, is optimistic that applications will pick up over the next month.
“I think a lot of partnerships are being formed right now here in July,” said Parker. “By the beginning of August or mid-August, we’re gonna see an influx of applications because people are still trying to source the real estate. You have to have the physical address on the application before you even submit it.”
Hemp farmers not jumping in
Parker, who is also vice president of the Kentucky Hemp Association and the state chapter director for Minorities for Medical Marijuana, also said the restrictions on medical cannabis that do not apply to hemp make it less appealing for established hemp farmers.
“You’re not allowed to grow the cannabis outdoors. Even though that would be more beneficial to the state since we have the best soil in the world,” said Parker. “We have the limestone in our soil, which is why bourbon is so big, which is why tobacco was so big. Being that you can’t grow outdoors – that’s going to stymie the actual progress of the medical marijuana industry.”
Parker also said that there is distrust in the state’s use of a lottery system to award licenses.
“People have this viewpoint that politicians and politics are run by money, and since we are considered a poor state, a lot of people have the viewpoint that politics doesn’t work for them just due to the fact that they don’t have the discretionary income to pay a politician to listen to their beliefs or what they wanna see happen in terms of legislation,” he said.
Kentucky borders Tennessee, Missouri, Illinois, Indiana, Ohio, West Virginia and Virginia, of which four states have legalized adult-use cannabis. West Virginia has a legal medical program, and Tennessee legalized low-THC cannabis oil for medical patients. Indiana is the only neighbor without legal cannabis.
