Governor Beshear recently announced that the lottery for cultivator and processor licenses will take place on Monday, October 28. Newly licensed companies will need to act quickly to develop a supply chain in anticipation of sales to patients in 2025.
For those selected to hold processor licenses, there are significant regulatory requirements that must be met before the business can commence operations. Applicants should already be thinking about how they will meet those requirements so they will be well-positioned to move forward.
For example, processor licensees will need to consider the following:
- Land use approvals: The licensee must obtain all required land use approvals and permits from their local jurisdiction before commencing construction/buildout of the facility. Note that buildouts must comply with applicable building and fire codes, which may include specific requirements for certain types of extraction.
- Extraction and manufacturing methods: The licensee will need to decide which methods of extraction to use and ensure that the operation only uses approved solvents and professional-grade, closed-loop systems as required.
- Catalogue of products: The licensee must review the categories of products that will be authorized for sale in Kentucky and determine which products the business will manufacture (edibles, beverages, tinctures, topicals, capsules, etc.). If the licensee intends to manufacture edibles, the licensee will need to obtain a commercial food manufacturing permit in addition to the cannabis-specific processing license and will need to develop a plan to imprint each edible with the required stamp indicating that the product contains medicinal cannabis.
- Packaging and labeling: The licensee will need to master a complex set of packaging and labeling requirements. In addition to requirements and restrictions outlined in Kentucky’s medicinal cannabis laws and regulations, manufacturers producing edibles and beverages must also comply with generally applicable food labeling requirements.
- Contracts/Equipment: The licensee will need to establish vendor relationships and enter into contracts for equipment, supplies, and services, as well as develop plans to calibrate and maintain equipment.
Prior to the first day of operations, to assure compliance with the new laws, each processor licensee will need to establish a specific set of standard operating procedures (SOPs) and ensure all employees are sufficiently trained on the SOPs. Licensees are required to have these SOPs available on site for review by the regulators upon request.
These required SOPs include, but are not limited to:
- Employment policies and procedures;
- Security, including:
- Staff identification measures and use of employee identification badges;
- Monitoring of attendance of staff and visitors;
- Alarm systems;
- Video surveillance;
- Monitoring and tracking inventory, including use of the Commonwealth’s electronic monitoring system and seed -to-sale tracking system;
- Personnel security;
- Transportation of medicinal cannabis and how to properly secure medicinal cannabis in the event of a traffic collision or transport vehicle malfunction;
- Cash management and anti-fraud procedures;
- Measures to prevent loitering, which shall include signage; and
- Storage of medicinal cannabis and medicinal cannabis products.
- The process for receiving, handling, processing, packaging, labeling, storing, transporting, and disposing of medicinal cannabis and medicinal cannabis products and a process for handling, tracking, transporting, storing, and disposing of medicinal cannabis waste;
- Workplace safety, including conducting safety checks;
- Contamination;
- Maintenance, cleaning, and sanitation of equipment used to process medicinal cannabis;
- Maintenance and sanitation of the processor’s facility;
- Extraction method(s), including standards for processing of raw plant material, refining of medicinal cannabis extracts, and manufacturing of medicinal cannabis products, including safety protocols and equipment;
- Proper handling and storage of any solvent, gas, or other chemical or substance used in processing medicinal cannabis;
- Quality control, including strict regulation of the amount of delta-9 tetrahydrocannabinol content in each harvest or production batch, proper labeling, and minimization of medicinal cannabis contamination;
- Recordkeeping and inventory control;
- Investigation of complaints and potential adverse events received from other cannabis businesses, cardholders, or medicinal cannabis practitioners regarding the processor’s operations;
- Preventing unlawful diversion of medicinal cannabis; and
- A recall plan.
Dentons will continue to monitor developments regarding the Kentucky Medical Cannabis Program, and assist new cannabis businesses in Kentucky with the planning, implementation, and ongoing operations of their cannabis businesses. If your business needs assistance preparing required SOPs, including plans for recalls of cannabis/cannabis products and workplace safety plans that comply with applicable state and federal regulations or any of the other SOPs required to operate a processing facility in a compliant manner, please reach out.
