Kentucky Auditor Investigates Medical Cannabis Licensing Process
Kentucky’s state auditor, Allison Ball, has launched an investigation into the Office of Medical Cannabis and its administration of the lottery process for awarding business licenses last year. The investigation comes amid criticism from local hemp farmers who claim they were shut out of the process by out-of-state companies with deeper pockets.
The lottery process, which awarded licenses to cultivate, process, and dispense medical marijuana, was criticized for favoring out-of-state companies. Many of the winners listed executives who own, work for, or are affiliated with large marijuana companies operating in other states.
The auditor’s investigation follows complaints from hemp farmers who claim they were unable to win licenses due to the influx of expensive applications from out-of-state companies. These farmers argue that they were best equipped to grow marijuana quickly and get product into dispensaries for Kentucky patients, but were instead shut out by companies that would not have the infrastructure to grow marijuana until later in 2025.
One company, Dark Horse Cannabis, was criticized for creating hundreds of companies in Kentucky ahead of the application deadline and then submitting hundreds of expensive applications, ultimately winning four dispensary licenses, one large cultivator license, and one processor license. The company’s executive director stated that no rules were broken, as they only followed the application process set up by the Beshear administration.
Kentucky Governor Andy Beshear defended the lottery process, stating that it was the fastest way to get the medical marijuana program off the ground in 2025, and that other options could have led to delays of two to four years with litigation. However, critics argue that the process was unfair and would lead to delays for patients’ access to medicine.
The first medical cannabis cultivation and production facility in Kentucky is set to break ground in Monticello, with plans to begin operations early next year. Governor Beshear estimates that medical marijuana will be available in Kentucky dispensaries for patients in late summer and fall, but this is only an estimate.
