176 Applications Filed for Kentucky’s Medical Cannabis License Lottery

After a slow start, the applications are piling up from those interested in winning a medical cannabis business license in Kentucky.

The state’s Office of Medical Cannabis (OMC) had received 176 applications from prospective cannabis entrepreneurs as of Aug. 19—including 129 for dispensaries, 33 for cultivation, 12 for processing and two for testing labs—according to state officials.

As of yesterday at 4:45 p.m. ET, the Office of Medical Cannabis has received 176 applications for medical cannabis business licenses. pic.twitter.com/CQ2aAfk55F

— Kentucky Office of Medical Cannabis (@MedCanKY) August 20, 2024

Overall, there are 74 available licenses that will be awarded through a lottery in early October. The breakdown of allocations for each license type includes:

• 16 cultivators  
  • 10 Tier 1 (up to 2,500 square feet) 
  • 4 Tier 2 (up to 10,000 square feet)  
  • 2 Tier 3 (up to 25,000 square feet) 
• 10 processors
• 48 dispensaries (allocated across 11 licensing regions)  
• No limit on testing labs  
  

Licenses for a fourth cultivation tier to grow up to 50,00 square feet of canopy will be available in a future application process, according to the OMC.

The recent momentum in application submissions comes after just 17 applications were filed in the first three weeks of the 62-day application period, which ends Aug. 31. While more applications are teed up in the final 10 days, the OMC urged those who have their materials ready to go ahead and submit them before the end of the period to allow the office sufficient time to process all of the entries.

As of mid-July, Kentucky’s licensing portal had 489 registered accounts, according to the state’s Cabinet for Health and Family Services, which houses the OMC under its government umbrella. That means more than 300 potential applicants could still file their paperwork in the coming days.

RELATED: Hundreds Interested in Kentucky’s Medical Cannabis Licenses; Just 17 Apply So Far

The nonrefundable application fees are $3,000 for Tier 1 cultivators, $10,000 for Tier II cultivators, $20,000 for Tier 3 cultivators, $5,000 for processors and dispensaries, and $3,000 for testing labs.

In addition, applicants must prove they have access to sufficient capital requirements to help ensure they can get their proposed businesses up and running upon winning a license. These requirements include:

• Tier 1 Cultivator - $50,000
• Tier 2 Cultivator - $200,000
• Tier 3 Cultivator - $500,000
• Processor - $150,000
• Dispensary - $150,000
• Testing Labs - $150,000
  

Without access to traditional banking throughout much of the cannabis industry under federal prohibition, raising capital is often one of the most significant barriers to entering the market. This is perhaps one reason why hundreds of businesses in Kentucky’s licensing portal have yet to apply.

During the state’s initial application period, prospective business applicants cannot apply for multiple license types; however, applicants can apply for one license in each of the three cultivation tiers or one license in each of the state’s 11 dispensary licensing regions.

This licensing application process comes after Democratic Gov. Andy Beshear issued an executive order in late 2022 in an unprecedented move to allow Kentuckians to possess and consume small amounts of cannabis to treat their medical conditions as long as they legally purchased their cannabis products at a licensed facility outside the state. (Editor’s note: It’s federally illegal to transport any amount of cannabis across state lines.)

This move by Beshear led to Kentucky’s Republican-controlled General Assembly passing legislation in early 2023 to make Kentucky the 38th state in the nation to legalize medical cannabis without highly restrictive conditions, like in Texas, where THC is capped at 1% on a dry-weight basis.

Kentuckians hoping to access the state’s forthcoming market can begin applying for medical cannabis cards on Jan. 1, 2025, according to the OMC. The cannabis program’s timeline does not include a date for dispensaries to launch sales.