Gov. Andy Beshear insisted Monday that out-of-state companies are not able to game Kentucky’s medical cannabis lottery as the state announced a first round of winners for dispensary licenses.
The Kentucky Office of Medical Cannabis awarded 36 licenses from a pool of more than 2,500 applicants included in the drawing Monday. The odds of winning varied based on which of the nine Kentucky regions the company applied to set up shop in.
It is unclear where the owners of those companies are located. Beshear has said the applications of those companies will be available via open records request.
This is the first of two dispensary license lotteries — the state has already awarded licenses for cannabis cultivators and processors. The licenses awarded Monday account for most regions in the state, except the regions encompassing the Louisville and Lexington metropolitan areas. Those lotteries will occur Dec. 16.
They’ve been separated out because each of those regions will be awarded six dispensary licenses, with two dedicated specifically to Jefferson County and two in Fayette County.
“We have said from the jump that we wanted to make sure that our program was stable and sustainable. So we're going to start small, and we can always grow as the market demands,” Flynn said.
Kentucky Public Radio reported Monday that most businesses to win the state’s medical cannabis cultivator and processor licenses from its lottery system are tied to marijuana companies based in other states.
One of the subjects of the reporting that submitted hundreds of applications, Dark Horse Cannabis, won four new licenses.
AR-MO-KY-MS Cannabis Ventures LLC, which shares the same Arkansas address as 350 other companies recently organized by a Dark Horse executive, won a dispensary license in Warren County, whose county seat is Bowling Green.
Three of the four available dispensary licenses for the Pennyrile region were won by companies organized by Dark Horse executive Sean Clarkson, with three business licenses in Eddyville: ARKY Capital Investments LLC, River City Relief House LLC, and DPDMJF Cannabis Holding Company LLC.
“Each of those applications lists a different owner,” Beshear said. “Under Kentucky law, each one would incorporate a separate Kentucky company, which would employ Kentuckians, and only Kentuckians to grow cannabis in Kentucky, to process it in Kentucky, and ultimately, for dispensaries here in Kentucky.”
Office of Medical Cannabis Executive Director Sam Flynn said companies sharing the same board of directors, principal officers, address and employees were allowed to submit separate applications, so long as the name of the owners is different. He did not directly address a question about parent companies.
“Each applicant is a different individual or set of individuals that owns the specific [limited liability company] that applied,” Flynn said.
Some 300 applicants were excluded due to an issue with their application. Winners will have to pay a $30,000 licensure fee in order to operate in the state at the beginning of the year.
Starting Dec. 1, Kentuckians who qualify will be able to receive written certification qualifying them for the in-state medical cannabis program. The state will launch an online directory of medical cannabis practitioners and will be updated as more become certified to prescribe medical cannabis.
Beshear would not provide a projected date when cannabis would be on shelves for Kentucky cardholders. He pledged to keep his executive order in place that protects people who travel out of state for medical cannabis from prosecution until in-state businesses are up and running.
“Given what the law was, we've worked pretty fast up to now,” Beshear said. “Now we'll have to see how quickly some of these businesses move. I think they have every incentive to move quickly.”
State government and politics reporting is supported in part by the Corporation for Public Broadcasting.
