The Kentucky Medical Cannabis Program (“KMCP”) recently published clarification on the “opt out” process during the license application period. As we expected, KMCP will allow changes in location and will not reject applications on the basis of a municipal opt-out that occurs after an application is submitted. If an eligible applicant is selected through the lottery process, and that applicant needs to change their location due to local government opt out decisions enacted prior to January 1, 2025, then KMCP will grant that applicant a provisional license upon payment of the applicable business license fee. (similar to other jurisdictions, e.g., New York). The applicant will then have 120 days to submit for a change of location to a new jurisdiction. Provisional licenses cannot be sold or transferred to another individual or entity and do not authorize a provisional licensee to begin any cannabis business activities. In the event a local government prohibits cannabis business operations after license issuance, the guidance cites to the regulations that allow a licensee to make a written request to change its location.
The Cabinet also confirmed that they will run specific lottery pulls for Jefferson and Fayette. They will then have a separate lottery for each region, and if more than one application is pulled for the same county, the first name pulled will have priority for that county. Subsequent winning applicants whose location is within the same county can submit for a change of location to another county in that region. The licensing application platform became active on July 1: https://ky-chfs-public.nls.egov.com/licenses. The regulators are continuing to update their website here with lists of counties and cities that notified the Office of opting out. They also provided some additional clarity on how the lottery selection process will work for dispensary licenses.
