Could Kentucky Legalize Adult-Use Cannabis? Medical Might Be the Path
Kentucky Medical Cannabis Could Open Doors For Future Adult-Use Legislation
Interested in the possibility of adult-use cannabis coming to Kentucky? It may not be as far out as you think. Below we cover how getting into the medical license market now may bolster support for a future adult-use program and give business owners a priority spot for converting licenses.
Kentucky Medical Cannabis Licenses Are On The Way
The Kentucky Medical Cannabis Program
In March of 2023, the Kentucky House and Senate passed SB47, which was then promptly signed by Gov. Beshear, making Kentucky the 38th state to legalize cannabis for medical use. Codified regulations are due by July of 2024, with medical sales beginning in January of 2025. This means applications for medical licenses could be released in the summer of 2024. Are you prepared?
Progress for Medical Marijuana in Kentucky
This is the first step toward a legal cannabis industry in Kentucky. We don’t have all the nitty-gritty details of the newly minted Kentucky Medical Cannabis Program, but the official website has been launched including an FAQ page. An Executive Director has been appointed (Sam Flynn), and his team is working on the rules and regulations for providing safe and affordable access to medical marijuana for Kentuckians.
First-Mover Advantages for a Kentucky Medical Cannabis Licensee
The Honor of Being a Medical Cannabis Provider
It should be considered an honor and privilege to be a provider of medicine to the ill. The local government is committed to lowering Kentuckians’ reliance on addictive opioids. Issuing licenses for the legal cultivation, processing, and dispensing of medical cannabis is part of that mission. Keep that in mind as you approach the medical cannabis industry. But there are of course ways to ‘do well by doing good’.
The Advantages of Being a Cannabis Entrepreneur
A state’s initial cannabis business operators have several first-mover advantages in a budding cannabis program. There is often less business competition (due to limited licensing and geographic restrictions). What’s more, the first brands and dispensaries are the first to welcome the state’s inaugural legal clientele, medical patients. This carries the responsibility of education and safety, but also allows the business to establish trust and loyalty with cannabis consumers.
Further, medical operators are the first to develop mutually respectful relationships with local authorities, communities, and non-cannabis businesses. Healthcare advocates in your local community understand your role and help galvanize the community-at-large around the good that legal cannabis brings (e.g., medicine, jobs, tax revenue) while also squashing the stigma. Last, and perhaps most important to the ‘cannapreneur’, medical licensees often are given a more streamlined path to the eventual adult-use program. Their fees may be lower, applications simpler, timeline sooner, and more!
The Path from Medical to Adult-use Cannabis in Kentucky
As mentioned above, the focus is far more on getting medicine to patients than anything else in a medical program. Competition is low, but so is your ‘customer base’ (usually ~2-3% of the population). The strategy is one of the first-mover, and especially if you have ties, resources, experience, or a passion for healthcare. The state wants the most polished business operators possible, as this is about taking care of the ill.
Once the state sees that the proverbial sky doesn’t fall, an adult-use program is usually a matter of ‘when’, not ‘if’. If you’re anxious about entering the eventual adult-use industry (and servicing what is usually ~20% of the population), know that it could be circling the legislative body or find its way onto a ballot within a few months to a year. (South Dakota had both initiatives on their ballot simultaneously!) On the other hand, if feeling savvy about the medical operators’ first-mover advantage, you could enjoy upwards of 3-5+ years of operation without additional competition in the medical program, let alone the advent of adult-use program operators. It all trends in the right direction for the people and plant. It’s about advocacy, stewardship, and being strategic at this stage in Kentucky.
What it takes to enter the Kentucky Cannabis Industry
Keys to Cannabis Business Success
There is no perfect formula to run a successful business, but there are certainly common threads. Here are some of the key components for medical cannabis license application winners and successful medical cannabis license operators:
1) An Experienced Team
Begin assembling your dream team. Cultivation and Processor licensees have highly regulated agricultural experience. Outdoor hemp cultivation experience helps but note that medical cannabis is grown almost exclusively indoors with pharmaceutical-grade equipment. Dispensary licensees have medical and highly regulated retail experience. Perhaps you have a doctor on your Advisory Board, or experience running a pharmacy, liquor store, or gaming facility.
2) Strategic Property and Facilities
Start to consider the best location for this business. Cultivation and Processing plants are often in industrial and commercially zoned areas of town, tucked away. Dispensaries are often like small banks; made for security and compliance, ample lighting and parking, clean and safe, designed for ‘come and go’ traffic, perhaps a block or two off Main Street.
3) Financial Modeling and Capital
It takes money to make money (and dispense medicine). Often applicants underestimate the costs for security, compliance, training, and more. You may want to consider starting your fundraising efforts now via some financial modeling.
3) A Top License Application
Often medical programs issue a limited number of cannabis licenses via merit-based and complex applications, requiring you to describe your plans for operating in detail. Only the best scores of the top few are issued the coveted licenses. Are you ready to compete?
Is it Time to Consider a Kentucky Cannabis Licensing Consultant?
All this information about the Kentucky Medical Cannabis Program is certainly new, if not overwhelming. Applying for a cannabis license is not rocket science, but it is an exact science. An experienced application expert can help you skip the learning curve, avoid the common pitfalls, and give you your best shot at obtaining a cannabis license. Often, you don’t get a second chance to apply!
If you’ve been mulling this opportunity in Kentucky, consider contacting us today to schedule a call or book an hourly consultation spot with our licensing consultants to learn more about how Canna Advisors may be a good fit for you.