With just under 30 days remaining, Kentucky’s medical cannabis license portal has received applications for only 30% of its total available licenses. Looking like a much less competitive process than originally expected, there have been only 23 total applications submitted across all license types throughout July, with a significant number of those already disqualified for deficiencies. The Commonwealth’s 60-day application period will close soon on Aug 31st, 2024, at which time 74 total licenses will be issued. Prospective applicants shouldn't hesitate; this is a rare opportunity to be at the forefront of an exciting new industry and to shape its future in Kentucky.

Application Portal Update

The applications already submitted were:

16 Dispensary applications (48 available)
5 Cultivation applications (16 available)
- 3 Tier-1
- 1 Tier-2
- 1 Tier-3
2 Processor applications (10 available)

While the interest in the State’s new medical licenses has been lower than expected, many applications have already been deemed deficient due to the State’s rather significant application process. This is likely due to the State using a lottery process, which makes it more challenging for investors to spend money meeting those application requirements simply for a random chance. That being said, this initial low interest probably means those who do successfully apply for a KY cannabis license have a much higher chance of winning than many originally thought. Applicants are therefore encouraged to seek third-party assistance in applying to assure that their applications are not rejected. While there is still ample time to submit a strong application, applicants should avoid procrastination to ensure their applications are comprehensive and competitive.

License Schedule

Applicants may submit multiple applications (see region discussion below), however applicants are limited to applying for only one license type (i.e., only cultivation licenses, only retail licenses, etc.), so no vertical integration will be allowed. Kentucky plans on choosing license winners via a lottery that will occur in October 2024.

License Allocation

To make sure that no Kentucky citizen would have to drive over 60 minutes for their nearest retail dispensary, the commonwealth has divided the state into 11 regions for its dispensary lottery. Each of those regions will be issued 4 dispensary licenses per region, except for regions with urban counties (Fayette and Jefferson - where Lexington and Louisville are located). Urban counties will be issued 6 dispensary licenses. Applicants must only submit 1 application per region if they are applying for multiple licenses. However, once issued, licenses are transferable to other regions. This of course raises a question as to the purpose of assigning regions for initial application, but it is expected that further rules will be adopted to deal with that issue.

License Types

Under the currently passed legislation various types of cannabis licenses are available, including:

· Tier I Cultivator (2,500 sq. ft.)

o 10 available in initial round

· Tier II Cultivator (10,000 sq. ft.)

o 4 available in initial round

· Tier III Cultivator (25,000 sq. ft.)

o 2 available in initial round

· Tier IV Cultivator (50,000 sq. ft.)

o Not in the initial round of licensing

· Dispensary

o 48 available in initial round

· Processor

o A business which prepares, manufactures, and packages medical cannabis products.

o 10 available in initial round

· Producer

o A business which is both a cultivator and a processor.

o Not in the initial round of licensing

· Safety Compliance Facility

o Responsible for testing medical cannabis products produced in Kentucky to ensure those products are safe for consumption and use.

o No initial limit

License Capital Requirement

To sufficiently be able to apply for a cannabis license, the commonwealth is requiring a minimum amount of funding available for each application.

This capital required is only for one license. If an applicant chooses to apply for multiple applications, they will have to pay the subsequent number of licenses fees.

In addition to the capital required, an applicant must have property when applying. This involves specifying the intended site for the cannabis business, providing evidence of site ownership or leasing, and presenting a detailed layout plan for the proposed establishment.

Local Considerations

Despite the licensing application process beginning today, local governments still have until December 31, 2024, to determine whether they will allow licensed cannabis business operations within their jurisdiction limits. This creates a situation where applicants may win a license, but may have to find a new location if the originally planned town decides not to allow cannabis. Thus, there is a risk of having to relocate your business. Currently, most local governments are still deliberating, with one-third opting in, one-third opting out, and one-third planning to put the decision on the November ballot for a public vote. If the vote fails to pass, it cannot be placed on the ballot for another 3 years.

If a county bans all cannabis business operations, a city within the county may still approve of cannabis operations within the city limits through an ordinance, as well as enact resolutions to put the decision to a vote at the next election.

The Lexington council is anticipated to approve new regulations in the coming weeks that will determine the locations where medical marijuana operators can establish themselves in Fayette County. Cultivators would be permitted in industrial and economic development zones, while being prohibited in all residential, business, and mixed-use zones. Depending on the size of the operation, cultivation could be allowed in certain agricultural zones as a conditional use, requiring special approval. Dispensaries would be permitted in many of the city's business and mixed-use zones. However, they will be prohibited in residential, industrial, and economic development zones.

Louisville Metro Council is currently looking into an ordinance that will discuss where cannabis can be grown and sold in Jefferson County. Some northern Kentucky counties and cities, including Florence, are considering banning all medical marijuana operators.

Ready to Become a Licensed Cannabis Business Owner in Kentucky?

As the application process is now open, we here at Global Go are ready to support you in preparing your winning application. Global Go specializes in cannabis licensing and applications (99% win-rate in hundreds of applications), compliance automation, advanced analytics, SOPs, mergers and acquisitions, new product launches, technology, security, and best practices.

There is still plenty of time to submit a winning application, but don’t miss out on the opportunity to lead in this new industry. Get in touch with a Global Go Application Director to acquire further details and determine whether a Kentucky Medical Cannabis License aligns with your investment goals.

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