CURE8 BLOG

Cannabis Licensing In Kentucky: What We Know Right Now

Business

Great news for Kentucky! The wait for medical cannabis is over, and with it comes a chance for both patients and businesses. Patients can find renewed hope for alternative treatment options, while the Kentucky Medical Cannabis Licensing program allows entrepreneurs to take root in this ground-breaking industry.

House Bill 829, signed by Governor Beshear in April, paved the way for safe access to medical marijuana. This summer, applications for business licenses open their doors, with a limited window from July 1 to August 31, 2024. Don’t miss this opportunity to be part of Kentucky’s booming medical cannabis program! This post delves into the key aspects of the program, covering everything from regulatory bodies to license types, and offering valuable insights for those looking to participate in this emerging market.

All About Kentucky’s Cannabis Medical Program

The Kentucky Medical Cannabis Program, the governing body in charge of licencing and regulating the state’s newly established medical cannabis program, filed two emergency regulations outlining the application procedure for licences on April 18, 2024.

To expedite the implementation of Kentucky’s medical cannabis program, Governor Andy Beshear signed the emergency regulations into law. The regulations give interested applicants advance notice of the application requirements related to safety compliance facilities, including those for processing, dispensing, and cultivating.

The first licence lottery in the state is scheduled for October. The state will issue 10 cannabis processor licences and 48 dispensary licences to cannabis businesses in Kentucky.

At least four dispensary licences will be initially awarded to each of the 11 regions across the Commonwealth. The two largest counties in Kentucky, Jefferson and Fayette, are the only exceptions to the prohibition against having more than one dispensary in a single county.

For more information visit the program’s website.

How Many Licenses Will Be Issued?

What Documents Do You Need To Apply For A Cannabis Business License In Kentucky?

Before diving into Kentucky’s new medical cannabis program, there are some key steps to consider. Here’s a breakdown of what you’ll need to have to apply for a license:

Application Fees – There’s a non-refundable application fee, but the amount depends on the specific type of license you’re seeking.
Location – You’ll need to prove you have control of a physical space. This could be through a deed, lease agreement, or a documented plan to acquire the property (lease or purchase).
Site Plan – A detailed blueprint outlining your proposed cannabis business space is required.
Financial Prowess – Be prepared to demonstrate you have enough financial resources to operate. This could be money you already have on hand or a confirmed line of credit from a financial institution. The specific amount required will vary depending on the license type.
Financial Planning – A comprehensive financial plan that includes a budget, cash flow projections, and a debt management strategy is necessary.
Business Details – Documents outlining your business structure (LLC, corporation, etc.) will be required.
Timeline to Operation – Show a clear roadmap with steps and an estimated timeframe for getting your business up and running.
Operational Plan – This plan should detail how you’ll handle various aspects of your business, including security, transporting cannabis products, storage and labeling, managing inventory, recordkeeping, and preventing illegal diversion of cannabis.
Background Checks – Be prepared to provide information and documentation for yourself and any relevant individuals or entities involved in your business.

Kentucky Cannabis Laws & Regulations

Here’s a breakdown of some key regulations for businesses involved in Kentucky’s medical cannabis program:

Location Matters – Cannabis businesses need to maintain a minimum distance of 1,000 feet from existing elementary schools, secondary schools, and daycare centers.
Employee Screening – All employees must be at least 21 years old and pass a background check, excluding them from having disqualifying felony offenses.
Keep it Discreet – Forget flashy advertising. Basic signage and business listings are okay, but other forms of promotion are a no-no.
More Rules on the Horizon – The Cabinet of Health and Family Services will be finalizing a comprehensive rulebook by July 1st, 2024. This will cover everything from employee training to security measures (think cameras, alarms, and secure parking) to how you handle cannabis transportation, packaging, and testing. Additionally, the state will restrict certain additives and require educational materials for patients on proper dosage and potential effects.
Local Control with Restrictions – Local governments can opt out of allowing cannabis businesses in their area. But citizens can fight back by putting the issue on a local ballot. Local governments also have some say in regulating the “when, where, and how” of cannabis businesses, but these regulations can’t be overly burdensome.

Taxes and Fees

The exact amount of licensing and patient registration fees for Kentucky’s medical cannabis program is still being determined.
Medical cannabis will be subject to both sales tax and a separate excise tax.
It’s important to note that recreational marijuana use and possession remain illegal in Kentucky. There is a stamp tax in place for those who buy, transport or import marijuana into the state, but since possession is illegal, people typically don’t pay it. If you are convicted for possession, you’ll be on the hook for unpaid taxes, interest, and potentially a felony charge for failing to pay the stamp tax.

Medical Cannabis Establishment Licensing

Kentucky will issue licenses for the following:

Dispensaries – These retail stores will be the primary point of access for patients to purchase medical marijuana products.
Processors – These businesses will transform raw cannabis flowers into various usable forms, such as edibles or oils, for patients.
Producers (Cultivator & Processor) – A combined license allowing a single entity to handle both the growing (cultivation) and processing of medical marijuana.
Testing Labs (Cannabis Safety Compliance Facilities) – These independent facilities play a vital role, in ensuring patient safety and product quality through rigorous testing.
Cultivators – These businesses are responsible for cultivating the cannabis plants themselves. They’re further categorized by size (canopy refers to the area covered by plant leaves):
- Tier I – Ideal for small-scale operations (maximum canopy: 2,500 square feet).
- Tier II – Suitable for medium-sized cultivation (maximum canopy: 10,000 square feet).
- Tier III – Caters to large-scale growers (maximum canopy: 25,000 square feet).
- Tier IV –Perfect for extra-large cultivation (maximum canopy: 50,000 square feet).
The Good News – There’s no limit on the number of licenses issued for each type of business. This means there’s a chance for a variety of businesses to participate in this new market.
The Fine Print – Regulators have the power to deny applications at their discretion. However, applicants can request a hearing to contest such a decision.

Which Regulatory Authority Oversees Kentucky’s Medical Cannabis Program?

Cabinet of Health and Family Services (CHFS)

This department takes the captain’s chair, overseeing the entire program from launch to smooth operation, ensuring everything runs according to regulations.

Board of Physicians and Advisors

This nine-member team of medical experts act as advisors. They include doctors and specialized nurses who can prescribe medications. Their role is to guide on crucial matters like how much medical cannabis a patient needs, what conditions qualify for treatment, and the performance standards for businesses involved in the program.

State Medical Boards

The existing medical oversight bodies – the State Board of Medical Licensure and the State Board of Nursing – will continue to be the lookouts, responsible for certifying practitioners who can recommend medical cannabis to patients.

Limitations and Penalties

Consumption Methods

Smoking Ban – Unfortunately, smoking medical cannabis is not allowed.
Vaping for Adults – If you’re 21 or older, you can use a vaporizer for your medical cannabis.
Edibles with Limits – Edibles are an option, but the THC content is capped at a moderate 10mg per serving.
Concentrates Kept Low – High-potency concentrates cannot exceed 70% THC.
Travel-Ready Storage – When you’re on the go, your medical cannabis must be kept safe in its original dispensary container.

Keeping it Safe and Responsible

Don’t Drive Under the Influence – Operating a vehicle while under the influence of cannabis is a serious offense.
Out of Reach While Driving – Medical cannabis must be stored out of reach while driving, requiring at least two steps to access.

Financial Considerations

Insurance Won’t Cover Costs – Health insurance, workers’ compensation, and government medical assistance programs don’t currently cover medical cannabis costs.