Kentucky small businesses concerned with medical marijuana licensing lottery

KENTUCKY ( FOX 56 ) — It was a game-changing phone call for one Kentucky business looking to open one of the first medical marijuana dispensaries in the state.

“They reached out not knowing that we were also applying,” said Jason Smith, co-owner of Bluegrass Buyers Club.

Smith said large out-of-state companies want to use their property to apply for cannabis business licenses. He said many of these businesses won’t submit just one application, but multiple to increase their chances in the lottery. often referred to as “app stacking.”

“So that’s where we decided, well, look, this doesn’t seem fair. Let’s reach out to the state and see if this is really the case,” Smith added.

He said the state’s response confirmed his worst fears, with the Kentucky Medical Cannabis Program responding to an email he sent stating:

915 KAR 1:001 definitions for 915 KAR Chapter 1. Section 1(5) defines “applicant” as “…a person to entity, including any parent entity, who applies for a cannabis business license to operate as a cultivator, processor, producer, dispensary, or safety compliance facility in the Commonwealth.

915 KAR 1:010E initial and renewal applications for cannabis business licenses, Section 3(5)(d)(1) states that a cannabis business applicant shall submit the proposed physical address and GPS coordinates for any proposed business activities along with “documentation such as a contingent agreement for property sale or lease or an existing deed or lease that shows the applicant has the authority to use the proposed location as a cannabis business for, at a minimum, the term of the license.”

There is nothing in the regulation that would disqualify an applicant if they submit a cannabis business application with the same address another cannabis business applicant submitted.

“I have one chance in the bucket and they’ve got 15 chances in the bucket to pull out two licenses, and even though you can’t operate two dispensaries at the same location, they have to be moved away from each other.”

However, small businesses are still holding out hope.

“So that the state can fix this by saying if you win the lottery process and we draw your business entity, then everyone else who submitted on that address location is disqualified. We’re not going to draw any more from that address location,” said Smith.

Other options include not allowing more than one applicant per address or eliminating the lottery.

FOX 56 News reached out to the state Cabinet for Health and Family Services for comment.

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