On March 31, 2023, Governor Andy Beshear signed Senate Bill 47 into law, legalizing medical
cannabis for Kentuckians beginning January 1, 2025. SB 47, which is codified in KRS Chapter
218B, created the framework for regulating the state’s medical cannabis program, including
licensed businesses, registered cardholders, and authorized practitioners. The Office of Medical
Cannabis in the Cabinet for Health and Family Services is responsible, under KRS Chapter
218B, for implementing and administering Kentucky’s Medical Cannabis Program (the
“Program”).
The Cabinet is tasked with developing and implementing specific regulations for the Program;
and, thus far, 17 regulations establishing the processes and procedures for medical cannabis
businesses and registered cardholders have been filed. On April 18, 2024, two emergency
regulations were filed which detail how proposed cannabis businesses can apply to become
licensed in the state and the requirements following licensure. The emergency regulations went
into effect immediately and will allow individuals and businesses to apply for cannabis business
licenses beginning on July 1, 2024, when the upcoming application window opens.
There are only a few eligibility requirements to become a Kentucky medical cannabis business
license holder, including the following: no one associated with your business can be convicted of
a disqualifying felony offense; no one associated with your business can be younger than 21
years of age; you must demonstrate you have sufficient capital; and your proposed location
cannot be located within 1,000 feet of an existing school or daycare facility. Notably, in-state
residency is not a requirement for licensure.
Applicants will be able to apply for cultivator, processor, safety compliance facility, and
dispensary licenses during the July 1–August 31, 2024 initial application window. Cultivator
licenses are broken down into the following four tiers based on the total square footage of
cultivation space:
- Tier I: shall not exceed an indoor growth area of 2,500 sq. ft.
- Tier II: shall not exceed an indoor growth area of 10,000 sq. ft.
- Tier III: shall not exceed an indoor growth area of 25,000 sq. ft.
- Tier IV: shall not exceed an indoor growth area of 50,000 sq. ft. (this license type will not
be available during the upcoming application window)
In the upcoming application window, the Program will be issuing 10 tier I cultivator; 4 tier II
cultivator; 2 tier III cultivator; 10 processor; 48 dispensary; and unlimited safety compliance
facility licenses. Applications deemed complete by the Program will be entered into a business
licensing lottery only if the number of complete applications received exceeds the maximum
number of licenses available within the requested category. For instance, if 100 complete
dispensary license applications are received, a lottery will be held to select the awardees of the
48 available dispensary licenses.
Application and licensing fees vary by license type. For example, dispensary license applicants
are required to pay a $5,000 application fee and, if successful, a $30,000 initial licensing fee.
Meanwhile, an applicant for a tier I cultivator license will have to pay a $3,000 application fee
and a $12,000 initial licensing fee. There is a “sufficient capital” requirement for all applicants,
meaning an applicant will need to demonstrate sufficient capital such that it can establish its
business and meet the needs for its type of cannabis business. The sufficient capital requirement
also varies in amount by license type. For instance, dispensary license applicants have a
sufficient capital requirement of $150,000, while tier I cultivators have a sufficient capital
requirement of $50,000.
An applicant may submit multiple applications for a license within one cannabis business type,
so long as the following criteria are met: each application contains a separate and distinct
physical address where the cannabis business proposes to operate; cultivator applicants may only
submit one application per cultivation tier; and dispensary applicants may only submit one
application per medicinal cannabis region. An applicant may not apply for more than one type of
cannabis business license (e.g., cultivator, processor, safety compliance facility, or dispensary) in
a single application window or submit an application after the application window has closed.
If you are interested in applying for a license in Kentucky, please feel free to contact us to speak
with one of our cannabis consultants.
