Kentucky regulators plan to kick-start their upcoming medical cannabis market after Gov. Andy Beshear announced the state would be issuing licenses through a lottery months ahead of the Jan. 1 start date for legal medical cannabis.
The Bluegrass State is planning to award 74 medical licenses before the end of the year. Operators can submit applications between July 1 and August 31, and the lottery is expected to take place in October, reflecting a quicker time table than originally planned.
The timeline changes come as a result of HB 829, an omnibus bill that addressed a lot of concerns that were left from SB 47, the inaugural bill signed into law on March 31, 2023, which originally legalized medical cannabis in Kentucky. HB 829, signed by Beshear on April 18, clarified the extent to which pharmacists are required to be involved in dispensaries and who is authorized to medically administer cannabis. But most immediately, the bill jump-started the state’s licensing process.
Originally, the law that legalized medical cannabis in Kentucky mandated that the entire industry would become legal on Jan. 1, 2025. This meant that although patients would technically be allowed to purchase cannabis, there wouldn’t yet be licensed operators to sell it, let alone put plants in the ground.
“The ability to purchase medical cannabis was supposed to begin Jan. 1, 2025, and that’s the first time we could license a business. So there was no way everything was going to be up and running because you have to be licensed to have the product, grow the product or process the product,” said Beshear in an April 18 press conference announcing the new rules.
With the new law in effect, prospective operators will be able to submit license applications over the summer.
“The bill takes the important step of moving up the timeline for business licensing by six months,” said Beshear. “In other words we can accept the applications, we can get the licenses out, and then it is time for these businesses to do it right and for us to ensure that they are doing it right.”
The inaugural round of licenses will include 16 cultivators, 10 processors and 48 dispensaries. The dispensaries will be split between 11 regions to ensure that there is easy access for patients.
All regions will have four dispensary licenses, except Kentuckyana and Bluegrass regions, which will get six. The two regions contain major cities Louisville and Lexington, respectively. No county can have more than one dispensary, except for the two largest, Jefferson and Fayette, which will get two.
“Now this is not recreational cannabis, this is medical cannabis, and we have an idea of how many people will qualify for the conditions that exist,” Beshear said. “So flooding a market with a product without scaling it to the number of people who could qualify for it is pretty much what happened to hemp when they issued just a ton of different licenses and a whole lot of farmers suffered from serious and significant financial harm.”
The Kentucky Lottery Corporation will oversee the license lottery, which will tentatively take place in October, according to Sam Flynn, executive director of the Kentucky Medical Cannabis Program, adding that they hoped that using a lottery would improve transparency of the award process.
“It reduces or eliminates litigation, and it creates a more fair process. Not one where people bid against each other and only then the big companies can be a part of it,” he said, “but one that provides at least a chance for everyone who can meet the criteria.”
