Kentucky's Medical Cannabis Legalization and Regulation Explained
The Kentucky General Assembly has legalized Medical Marijuana with the passage of 2023 SB 47.
The Kentucky Medical Cannabis Program (KMCP) will now sit within the state’s Cabinet for Health and Family Services, established to implement the requirements established in KTS 218B to govern the safe and effective use of medical cannabis in Kentucky. This will begin starting on July 1st, 2024.
To help our Rowan Review readers understand more about this process, we created this brief article in the form of frequently asked questions and answers.
What is the mission of the KMCP?
To ensure that Kentuckians suffering from serious medical conditions have safe, affordable access to medical cannabis. According to the KMCP: “As medical cannabis is a healthcare necessity for Kentuckians with cancer, multiple sclerosis, epilepsy, post-traumatic stress disorder, and other serious conditions, our program will prioritize patient safety, access, and affordability.”
How will the KMCP be set up?
There will be a Board of Physicians and Advisors, and a Team Kentucky Medical Cannabis Workgroup.
What is the timeline for the legalization and regulation of medical cannabis?
July 1, 2024: Business licensing applications open
August 31, 2024: Business licensing applications close
January 1, 2025: Medical cannabis program goes live. This is when individuals who qualify can become medical cannabis cardholders and obtain medical cannabis. It is also when businesses will open to the public.
What will the cannabis business license types be?
Cultivator: responsible for planting, raising, harvesting, trimming, and curing medical cannabis
Processor: responsible for processing and packaging raw plant material into usable product formats
Producer: vertically-integrated license combining cultivator AND processor licenses
Safety compliance facility: responsible for contamination and purity testing of raw plant material and products
Dispensary: responsible for purchasing and selling finished products to cardholders
How many licenses will be available?
Initially, statewide there will be:
Tier I Cultivator: 10
Tier II Cultivator: 4
Tier III Cultivator: 2
Tier IV Cultivator: 0
Processor: 10
Dispensary: 48
Safety compliance facility: no limit
The 48 dispensary licenses will be disbursed among 11 regions.
How were these regions established?
The 11 regions were established based on drive time estimates from the Kentucky Transportation Cabinet. See the regions and counties mapped here:
How does a business apply for a license? How is it determined what businesses in what areas get these limited business licenses?
There will be a lottery process with these steps:
A file with qualified applicant information will be prepared by the executive director of the Cabinet’s Office of Medical Cannabis and kept confidential.
The Cabinet will de-identify the file using unique numerical identifiers, and this encrypted file will be sent to the Kentucky Lottery Corporation.
The Kentucky Lottery Corporation will conduct an anonymous, randomized lottery drawing following established lottery drawing procedures confirmed with the Cabinet.
The lottery drawing results will be provided by the Kentucky Lottery Corporation to the Cabinet using an encrypted file listing the numerical identifiers selected by the lottery.
The Cabinet’s General Counsel will compare this file with the original and re-identify the numerical identifiers and send the results to the Office of Medical Cannabis.
The Cabinet will announce the results during a live broadcast.
Licensing Fees:
Tier I Cultivator:
Initial License Fee: $12,000
Annual Renewal Fee: $12,000
Tier II Cultivator:
Initial License Fee: $25,000
Annual Renewal Fee: $25,000
Tier III
Initial License Fee: $50,000
Annual Renewal Fee: $50,000
Tier IV
Initial License Fee: $100,000
Annual Renewal Fee: $100,000
Processor
Initial license fee: $25,000
Annual renewal fee: $15,000
Dispensary
Initial License Fee: $30,000
Annual Renewal Fee: $15,000
Safety Compliance facility
Initial License Fee: $12,000
Annual Renewal Fee: $12,000
Section II: What this has to do with prospective medical cannabis patients
How can a qualifying patient become a registered cardholder in Kentucky?
Visit a medical cannabis practitioner to obtain a written certification
Submit an application to the Cabinet beginning Jan 1, 2025
Receive an application decision from the Cabinet and download a registry ID card
What are the qualification criteria?
Be a resident of Kentucky
Have NO disqualifying felony offense convictions
Have a diagnosed qualifying medical condition:
Cancer
PTSD
Multiple sclerosis
Chronic pain
Epilepsy
Chronic nausea
Muscle spasms
What are the cardholder fees?- $25
Legitimate ID cards will look like this. BEWARE of scams.
What are the patient supply limits?
Within a 30 day period:
4oz/112g of raw plant material, OR
28 grams concentrate, OR
3,900 milligrams of THC infused cannabis products
Section III: What this has to do with local government
Section III: What this has to do with local government
What does any of this have to do with local government?
Cities and counties are permitted to prohibit the operation of medical cannabis business operations. They are also allowed to regulate certain specified aspects of medical cannabis business operations. Both of these provisions are outlined in KRS 218B.
Additionally, in cities and counties with zoning, the zoning of these businesses must be considered. Morehead’s City Council has voted to take the issue of zoning for cannabis businesses to the planning commission, which will make a recommendation to the City Council. However, their decision would only apply to the city limits; Rowan County has no zoning.
Are local governments going to get any money from medical cannabis business fees?
KRS 218B.130 says:
Local governments MAY NOT “…enact ordinances that impose an undue burden or make cannabis business operations unreasonable or impractical…”
However, local governments MAY “…establish and assess reasonable local fees to compensate for any additional costs caused by the operation of cannabis businesses within its territory.”
What happens if a local government prohibits cannabis businesses?
This does not outlaw medical cannabis- only the businesses within that jurisdiction. Residents who are registered cardholders would still be able to travel to other jurisdictions to get their medical cannabis.
If a local legislative body, such as a fiscal court or city council, prohibits cannabis business operations through ordinance, a petition may be initiated for a referendum on public question, which is a legal process to put it on the ballot and allow voters to decide. (KRS 83A.120).
What if a local government decides to put that decision on the ballot?
If a local government puts this decision on the ballot, it would effectively prevent any businesses from effectively locating in that city or county. This is because the lottery for licenses begins in July, and the medical cannabis patient rollout process begins in January, so businesses would only have one month to obtain all proper licensing, construct a facility, and prepare to operate, which is very unfeasible considering the competitive nature of the licensing lottery and high dollar investment required.
If a local government prohibits cannabis business operations in their jurisdiction, regardless of whether it is by ordinance or by ballot, they must notify the Program in writing within five (5) days after passage of such an ordinance or after results of the ballot are certified.
What if they neither prohibit medical cannabis nor put the decision on the ballot?
As we’ve said earlier in this article, the state has already legalized medical cannabis. That just leaves cities and counties with the responsibility for implementing certain regulations pursuant to KRS 218B.
What if a city and county disagree on whether to allow licensing for medical cannabis business?
If a city is within the jurisdiction of a county government that prohibits cannabis business operations, that city may approve licensed cannabis business operations within their city limits through ordinance or public vote.
What about medical cannabis in schools?
School boards must establish policies to permit or prohibit minor (under 18) registered patients to consume medical cannabis at school, pursuant to KRS Chapter 218B.045.
State law already requires that medical cannabis businesses not be located within 1,000 feet of a public school or daycare center.
So, what is the Rowan County Fiscal Court going to do?
All cities and counties in Kentucky that have not yet acted have these three options:
To take no action since medical cannabis is already legalized.
To take action to put medical cannabis business operations on the ballot as a public question.
To prohibit medical cannabis operations within its jurisdiction by ordinance.
Additionally, local governments may:
Establish local fees for medical cannabis businesses, and/or
Enact ordinances relating to the time, place, and manner of cannabis business operations, as permitted by KRS 218B.130. This would include zoning, as is currently being considered by the City of Morehead.
The Rowan County Fiscal Court decided to wait before making any decisions on what action to take until after the public had ample time to be made aware of the situation discussed in this article. Additionally, Judge Clark made a public presentation to our community at our May Fiscal Court meeting, livestreamed on Facebook and posted to our website. You can watch it at the link: https://fb.watch/shXozY9epR . As part of our continual efforts in government transparency, we wanted to make folks aware of these facts before taking any action.
This article originally appeared in the May ‘24 Rowan Review. View it at the link: rcky.us/review/may-24-edition.