The enactment of Senate Bill 47, also known as the Kentucky Medical Cannabis Act, is going to open a lot of doors for cannabis ventures in the Bluegrass State. In this blog, we’ll outline the necessary procedures to improve your prospects of obtaining approval for a cannabis license in Kentucky.
Important Dates
The Cabinet of Health for Family Services will start receiving applications for cannabis business licenses through an online portal from July 1, 2024, until August 1, 2024.
The deadline to submit corrections or missing information on the portal is September 25, 2024.
A lottery will be held on October 2024 to determine which license applications will be approved. Denied applicants will have the option to appeal against the decision.
However, the provisions of the bill won’t be enforced until January 1, 2025, allowing aspiring business owners ample time to organize and submit their license applications.
Types of Licenses
Anyone interested in starting a cannabis business in Kentucky will be required to have one of the following types of licenses.
- Dispensary
- Cultivator
- Processor
- Producer
- Safety Compliance Facility
The number of licenses that will be granted after the first round of applications for the various types are as follows:
| License Type | Number of Licenses in Round 1 |
| Dispensary | 48 |
| Cultivator (Tier 1) | 10 |
| Cultivator (Tier 2) | 4 |
| Cultivator (Tier 3) | 2 |
| Cultivator (Tier 4) | 0 |
| Processor | 10 |
| Producer | 0 |
| Safety Compliance Facility | Unlimited |
To submit multiple applications for a license in the same cannabis category, you will have to ensure that the following conditions are met:
- Each Kentucky cannabis licensing application must specify a unique physical address for the proposed business operation.
- Kentucky dispensary license applicants are restricted to one application per medicinal cannabis region.
- Cultivator applicants are limited to one application per cultivation tier.
- Applicants cannot apply for more than one type of cannabis business license.
The following guidelines will also be required for every cannabis license holder in Kentucky, alongside fulfilling any other requirements relevant to their respective licenses:
- Every cannabis license holder will use an electronic monitoring system and a seed-to-sale tracking system provided by the Cabinet of Health for Family Services.
- Records and identification for all employees and visitors are to be strictly maintained.
- Thorough and compliant security measures to be implemented.
- Strictly use approved chemicals only.
- Conduct regular equipment upkeep.
- Sufficient sanitation procedures to be ensured.
- Follow compliant storage practices.
- Establish a system for managing the disposal of cannabis plant waste.
Requirements for Kentucky Cannabis License Applications
Along with being at least 21 years of age, and not possessing any disqualifying criminal convictions, each applicant must secure a compliant location for the business, as license applications are tied to a single specific location. Individuals planning to establish businesses at multiple sites must submit separate applications for each location.
The initial license application must include the following:
- Legal entity name, business structure, Doing Business As (DBA) name, postal address, federal tax identification number, associated website(s), email address, and contact number for the intended cannabis enterprise, along with confirmation of business registration with the Kentucky Secretary of State.
- Type of cannabis license sought.
- Business documents including articles of incorporation, articles of organization, or bylaws.
- Proof of location.
- Information on each principal board member.
- All ownership interest of at least 10% equity and/or any registered nurse that has an ownership or investment agreement with the proposed cannabis business.
- Disclosure of any parent company or individual with ownership interest.
- Information on any individual assisting the proposed cannabis business financially.
- Documentation that shows the applicant can establish and operate a cannabis business. This can include:
- Experience in establishing and operating a for-profit or nonprofit business or organization.
- Any past instance where the applicant received a similar license, including a provisional license.
- History of receipt of suspensions, revocations, fines, or disciplinary actions.
- All details about the duties, responsibilities and roles of each principal officer, board member, employees, and anyone with financial interest in the business.
- A timeline showing the steps that will be taken to open and the time required to begin operating.
- A financial plan.
- Documentation of sufficient capital meeting the license requirement.
- Proposed business operations plan to include at least all the following items:
- Security
- Employee qualifications
- Transportation of medical cannabis
- Storage and labeling of medical cannabis
- Recordkeeping
- Measures to prevent unlawful activities
- Job creation
- Any management services the business will be using.
- Statement ensuring that the proposed location is compliant with zoning restrictions.
Applicants must ensure their proposed business location is at least 1,000 feet away from any existing elementary or secondary school, or daycare center. Moreover, the initial license application requires the following details about the location:
- Complete address and GPS coordinates of the location.
- Documentation confirming sale or lease agreement, demonstrating the applicant’s authority over the property.
- A site plan for the business location that covers detailed information about roofing, floor plans, security measures like surveillance, access control, plumbing, ventilation, storage, pest control, lighting, on-site parking, and loading/unloading areas.
Cannabis Licensing Regions in Kentucky
There are currently 11 medical cannabis dispensary licensing regions in Kentucky as shown in the map below:
Image courtesy: https://kymedcan.ky.gov/businesses/Pages/default.aspx
The regions, along with their counties, are listed below:
Region 1 – Bluegrass
Counties: Anderson, Bourbon, Boyle, Clark, Fayette, Franklin, Garrard, Harrison, Jessamine, Madison, Mercer, Scott, and Woodford.
Region 2 – Kentuckiana
Counties: Bullitt, Henry, Jefferson, Oldham, Shelby, Spencer, and Trimble.
Region 3 – Northeast
Counties: Bath, Boyd, Carter, Elliot, Fleming, Greenup, Lewis, Mason, Menifee, Montgomery, Morgan, Nicholas, Robertson, and Rowan.
Region 4 – South Central
Counties: Allen, Barren, Butler, Edmonson, Logan, Metcalfe, Monroe, Simpson, and Warren.
Region 5 – Cumberland
Counties: Bell, Casey, Clinton, Cumberland, Harlan, Knox, Laurel, Lincoln, McCreary, Pulaski, Rockcastle, Russell, Wayne, and Whitney.
Region 6 – Mountain
Counties: Breathitt, Clay, Estill, Floyd, Jackson, Johnson, Knott, Lawrence, Lee, Leslie, Letcher, Magoffin, Martin, Owsley, Perry, Pike, Powell, and Wolfe.
Region 7 – Pennyrile
Counties: Caldwell, Christian, Hopkins, Lyon, Muhlenberg, Todd, and Trigg.
Region 8 – West Kentucky
Counties: Ballard, Calloway, Carlisle, Crittenden, Fulton, Graves, Hickman, Livingston, McCracken, and Marshall.
Region 9 – Lincoln Trail
Counties: Adair, Breckenridge, Grayson, Green, Hardin, Hart, Larue, Marion, Meade, Nelson, Taylor, and Washington.
Region 10 – Northern Kentucky
Counties: Boone, Bracken, Campbell, Carroll, Gallatin, Grant, Kenton, Owen, and Pendleton.
Region 11 – Green River
Counties: Daviess, Hancock, Henderson, McLean, Ohio, Union, and Webster.
Fee Structure
There are 3 required fees that are needed to be paid for Kentucky cannabis licenses at various stages of the application and license process.
Application Fee
It is a one-time fee to be paid at the time of application.
Licensing Fee
It is a one-time, non-refundable fee to be paid after the applicant is granted a license. This must be paid within 15 days of the date the invoice is sent to the licensee.
Renewal Fee
It is to be paid once every year at the time the initial application was submitted. This amount is refundable in case the license renewal is denied.
Proof of sufficient capital is not a required payment, but applicants must prove they have the amount either on deposit, or through extension of credit. Each different license type will have varying fees regarding application and licensing.
A rundown on the costs required for each type of license is provided below:
| License Type | Application Fee | Licensing Fee | Renewal Fee | Proof of Sufficient Capital |
| Dispensary | $5,000 | $30,000 | $15,000 | $150,000 |
| Cultivator (Tier 1) | $3,000 | $12,000 | $12,000 | $50,000 |
| Cultivator (Tier 2) | $10,000 | $25,000 | $25,000 | $200,000 |
| Cultivator (Tier 3) | $20,000 | $50,000 | $50,000 | $500,000 |
| Cultivator (Tier 4) | $30,000 | $100,000 | $100,000 | $1,000,000 |
| Processor | $5,000 | $25,000 | $15,000 | $150,000 |
| Producer | $5,000 | $25,000 | $15,000 | $150,000 (plus the amount for the tier of cultivation facility associated) |
| Safety Compliance Facility | $3,000 | $12,000 | $12,000 | $150,000 |
Lottery Process
Kentucky’s allocation of medical cannabis licenses may utilize a lottery system if the number of applications exceeds the available licenses for each category. Since there is no cap on the number of licenses to be issued for safety compliance facilities during the first round, they are exempt from the lottery.
To ensure fairness, the lottery process maintains full anonymity among applicants, preventing any advantage for those selected.
Wrap Up
The legalization of medical cannabis in Kentucky presents a promising opportunity for entrepreneurs looking to enter the industry. Since the provisions of the bill won’t be enforced until January 2025, prospective business owners are being afforded ample time for preparation. With careful navigation of the licensing process and with the help of professional guidance, entrepreneurs can position themselves for success in Kentucky’s expanding medical cannabis industry.
