Kentucky Begins Accepting Medical Cannabis License Application on July 1, 2024 — Here’s What You Need to Know

By: Doug R. Sargent, Esq.

Last week saw a flurry of significant activity as Kentucky moves forward with its medical cannabis program. On April 17, 2024, Governor Andy Beshear signed House Bill 829 into law and the following day, the Cabinet for Health and Family Services (CHFS) filed two emergency regulations—one regulating initial and renewal applications for cannabis business licenses and the other regulating cannabis business licenses—and two standard regulations that are identical to the emergency regulations.

With those items in place, Kentucky’s initial application window is set to open on July 1, 2024, and run through August 31, 2024. The following licenses will be available in this initial application period:

Producer and Tier IV cultivator licenses are not available during this initial license period. There is a de facto prohibition on verticality in this first round of licensing—applicants are limited to submitting for one license type (cultivator, processor, safety compliance facility, or dispensary) but may submit multiple applications for that license type if certain conditions are satisfied. Assuming there are more applications than available licenses, which we certainly expect, applications deemed complete will be entered into a lottery to determine license winners.

Completed applications require, among other things:

• A non-refundable application fee that varies depending on the license sought;
• Demonstration of site control of specific real estate through a deed, lease, or contingent agreement to lease or purchase the property;
• A site plan;
• Confirmation of sufficient capital, either on deposit or through extension of credit through one or more financial institutions, in an amount specified in the emergency rules that varies by license;
• A financial plan, including a budget, cash flow planning, and debt management;
• Business entity formation documents;
• A timeline showing the steps and estimated amount of time it will take to become operational;
• An operational plan that shows how the applicant will address a number of items, including security, transportation, storage and labeling, inventory management, recordkeeping, and preventing unlawful diversion; and
• Information and documentation regarding the applicant’s individuals and entities of interest.

This is an exciting opportunity for entry into a brand-new cannabis market but those interested in being in the first wave of licensees will need to act quickly to make a timely submission.

If you have any questions or would like to discuss how Greenspoon Marder LLP may be able to assist you with the application process, please email Doug Sargent ([email protected]).