Kentucky’s Office of Medical Cannabis (OMC) chose 36 retail licensees out of 2,551 hopefuls on Nov. 25, bringing the Blue Grass State that much closer to its planned medical market launch next year.
OMC livestreamed the lottery where it drew 36 of the 48 available retail licenses on Nov. 25, as it did last month with the lotteries to select cultivators and processors. The agency partnered with the Kentucky Lottery Corp. to conduct the drawings.
Kentucky plans to launch its medical market in early 2025, starting with 48 licensed dispensaries, 16 cultivators and 10 processors. After a slow start in the application phase, thousands of bids poured in days before the deadline. In total, there were 4,998 applications with about 80% of them for dispensaries. The remaining fifth were for cultivation and processing.
“It is critical that our cannabis business licensing framework ensures the new industry is stable and sustainable, with an emphasis on small business, and provides product growth to meet card holder demand,” said OCM Executive Director Sam Flynn. “In developing our lottery process we considered the best practices used in other states and determined that this was the most fair and transparent way to build our new program”
The state divided Kentucky into 11 regions in order to fairly distribute retail licenses geographically to ensure that medical patients have easy access. The drawings on Nov. 25 were for regions 3 through 11, while regions 1 and 2 will be determined by a subsequent lottery in December.
Of the 4,075 applications that were submitted for retail licenses, 2,840 were for one of the 36 licenses in regions 3 through 11. Of those, 2,551 were approved for the lottery.
If an application was complete and had no deficiencies they were approved, if it was deficient it was denied. Some other applications were denied due to failure to pay or applying more than once in a dispensary licensing region or for other violations.
The available licenses per region were based on population and the number of counties within each one.
“We wanted to ensure that we have a secure program, which is why we limit the number of dispensaries to no more than one per county, except for in Jefferson County which gets two and Fayette County which gets two,” said Flynn. “We wanted to make sure there’s access points all throughout the commonwealth, but also that these businesses aren’t stacking up on one another as you may see in some other states.”
The state has lotteries left in its first round of medical cannabis licensing to select retailers in the two most densely populated regions of Kentucky, which include Louisville and the state capital of Frankfort.
Winners of the lottery become “approved” cannabis operators. They have 15 days to pay their respective licensing fee or risk forfeiting that approval.
Thus far, the Kentucky commission has officially issued 30 cannabis operator licenses. The commission selected 16 cultivation and 10 processing licenses through a series of lotteries on Oct. 28.
“Today I can announce that all 26 have all been licensed,” said Gov. Andy Beshear during the Nov. 25 lottery drawing.
Before that, the commission issued licenses to four testing labs that were not required to go through the lottery process.
“I’m feeling good that we are now through all but the last lottery, and we’ve already gotten all the processors, all the cultivators, and four of the labs licensed,” said Beshear. “That’s a big deal.”
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.
In late 2022, Beshear issued an executive order that protected medical patients who obtained cannabis in neighboring states and then brought it home to Kentucky.
“I’m going to keep the executive order in place that provides protection from prosecution for those with these conditions until we’ve got the program up and running, and then I will rescind it,” said Beshear.
