Kentucky’s Most-Coveted Medical Cannabis License Awarded to Top Company
Cresco Labs, one of the largest marijuana companies in the country, has secured two highly coveted medical cannabis licenses in Kentucky, sparking concerns that out-of-state companies may have gamed the state’s lottery process. The company’s CEO, Charlie Batchell, owns the LLC that won the license through a state-administered lottery in October.
Cresco’s path to securing the licenses is shrouded in mystery. The company submitted 128 expensive applications for licenses, with ties to 21 new companies formed just ahead of the application deadline. The applications listed the mailing address of their principal office as that of Blue Equity in downtown Louisville, which is owned by Jonathan Blue, who is also Cresco’s “local Kentucky partner.”
The company’s management services agreement with the cultivator licensee in Winchester, which is owned by Batchell himself, has raised eyebrows. When asked about the ownership structure of the cultivator licensee, Batchell replied that it was an LLC, but couldn’t recall its title and would have to check. The Cabinet for Health and Family Services later revealed that the new owner of KSKYAPP is CIBKYAPP, LLC, which is solely owned by Batchell.
Kentucky Governor Andy Beshear has defended the state’s lottery process, calling it the most transparent process. However, the state auditor is investigating the process, and several applicants have complained about the fairness of the lottery.
The controversy has sparked concerns among Kentucky hemp farmers, who had invested in building secure greenhouses needed to grow medical cannabis. They argue that out-of-state companies landing licenses will delay the availability of medical cannabis for patients.
Cresco’s CEO, Charlie Batchell, has praised the Beshear administration’s approach to medical cannabis, saying they “did a phenomenal job” of setting up the licensing process. However, the company’s ties to out-of-state companies and its ability to secure multiple licenses have raised questions about the fairness of the process.
The first phase of Cresco’s Winchester cultivation facility will be roughly 5,000 square feet, with plans to expand in later phases. The company expects to plant seeds by this summer and harvest plants to send to processors and dispensaries by the end of the year.
