Kentucky prohibits the use of marijuana for recreational purposes. However, the state legalized medical marijuana on March 30, 2023. Kentucky’s medical cannabis program will launch in 2025 when the legal sale of medical marijuana commences in the state. Prior to the legalization of cannabis in Kentucky, non-psychoactive CBD oil was the only cannabis derivative that was legal for medical use.
With medical cannabis only recently legalized in the state, there is no way to ascertain the effect of marijuana revenue on the state’s economy until legal sales begin in 2025. However, there have been studies and reports on the potential economic impact the legalization of marijuana will have on the Commonwealth. In 2013, Dr. Charles Fields of the School of Justice Studies Research Program (SJRP) conducted research to analyze the Economic Impact of Marijuana Decriminalization in Kentucky. The report showed that Kentucky could generate about $40 million yearly in marijuana tax. Also, the research found that over 60% of drug possession arrests in the Commonwealth were for marijuana possession. Decriminalizing marijuana will save the state the money spent on marijuana prohibitions and punishment.
Another report in 2020 by the University of Kentucky estimated that Kentucky could potentially generate $200 million annually from the legalization of medical and recreational marijuana. The study compared the revenue generated from marijuana and the population of two states (Colorado and Washington) that have legalized marijuana. The projected revenue will be generated from the sales tax imposed on marijuana.
In the crime data provided by the Federal Bureau of Investigation (FBI) for Kentucky, marijuana accounted for less than 20% of drug-related arrests in the Commonwealth. In 2021, marijuana-related arrests were 3,553 (17%) out of 20,749 drug-related arrests. It accounted for 16% (2,765) of the total drug-related arrests (17,118) in 2020. And in 2019, it accounted for 19.9% (5,086) of the state’s drug-related arrests (25,619).
Specifically, there were 2,878 marijuana possession arrests and 675 marijuana sales arrests in 2021 in Kentucky. In 2020, there were 2,185 marijuana possession arrests and 580 marijuana sales arrests. In 2019, there were 4,248 marijuana possession arrests and 838 marijuana sales arrests. Also, in 2018, there were 5,974 marijuana possession arrests and 1,040 marijuana sales arrests. These figures showed a gradual decline in marijuana-related arrests from 2018 to 2021. The trend is unconnected to the strict measures adopted against marijuana use.
In a report published by the Kentucky Administrative Office of the Courts (AOC), over 300,000 Kentuckians were convicted for cannabis-related offenses between June 2002 and July 2022. This criminalization report showed that cannabis conviction affected 1 out of 10 residents of the state. The conviction rate among those charged with cannabis offenses was 59%, slightly lower but on par with conviction rate (63%) for all offenses in the state. Possession was recorded as the most common cannabis offense in Kentucky. This is a Class B misdemeanor punishable by a maximum fine of $250 and up to 45 days in jail. In the two decades recorded, there were about 277,000 people charged with cannabis possession in Kentucky.
Medical marijuana has been legalized in Kentucky. However, the state’s medical marijuana program does not commence until 2025. Kentucky will issue medical marijuana cards to eligible patients and caregivers from that year. A medical marijuana card allows a cardholder to purchase, possess, and sometimes home-grow marijuana in states with medical marijuana programs. It is issued to patients, with eligible medical conditions, as well as their caregivers.
The cannabis plant has been prevalent in Kentucky for the last two centuries and was generally used for recreational purposes and as an analgesic. Marijuana became illegal in the state in 1971 due to the promulgation of the U.S. Controlled Substances Act. The Act classified the cannabis plant and all its derivatives, including marijuana and hemp, as Schedule I controlled substances with no medical benefits and having potential for abuse.
In 2014, Kentucky enacted SB 124 to redefine the definition of hemp and allowed the use of hemp-derived cannabidiol (CBD) in treating epilepsy in a clinical trial or medical school research program. However, marijuana-derived CBD remained illegal in the state.
In 2015, Senate Bill 40 and House Bill 3 were presented in the Kentucky Senate and House. Both bills sought to establish medical marijuana programs in the state, and they failed at committee levels. In 2020, House Bill 136, sponsored by Rep Jason Nemes, was the first medical marijuana bill to be taken up by the Kentucky House. It proposed establishing a medical marijuana program for patients with specific medical conditions. The bill limits medical marijuana use to specific areas in the state and prohibits patients from smoking it. It passed in the House by a vote of 65 to 30 and was sent to the Kentucky Senate. However, due to the COVID-19 pandemic, the bill stalled in the Senate.
House Bill 136 was reintroduced by Rep Jason Nemes in the Kentucky House in January 2022 and was passed by a vote of 59 to 34 on March 27, 2022. However, it was not scheduled for hearing in the Kentucky Senate until the end of the 2021-2022 session on April 15, 2022, stealthily killing the bill. The Kentucky governor, Andy Beshear, promised to consider issuing an executive order to allow medical marijuana in the Commonwealth.
In 2022, House Bill 521 was introduced in the House to legalize medical and recreational marijuana in the state by Rep Rachel Roberts. The bill proposed the creation of a Cannabis Control Board to regulate both recreational and medical marijuana. The Board would issue licenses to marijuana businesses to cultivate, process, and sell marijuana to adults aged 21 years and older and registered medical marijuana patients. There were also provisions for employment protection for cannabis users and expungement of prior marijuana-related convictions by the courts. Additionally, HB 521 proposed the creation of a Social Impact Council to disburse the revenue generated from marijuana licensing fees, excise tax, and fines. It sets a date for the commencement of marijuana sales in Kentucky for July 1, 2024. However, House Bill 521 failed in the House.
In 2022, Senate Bill 186 (SB 186) was sponsored by Senator Morgan McGarvey and Senator David Yates in the Kentucky Senate. The bill contained similar provisions as HB 521, but it also failed in the Kentucky Senate.
In June 2022, Governor Andy Beshear, through Executive Order 2022-338, appointed the 'Team Kentucky Medical Cannabis Committee' to advise the Governor on medical marijuana-related issues. The team was also saddled with the responsibility of providing a forum for Kentucky residents to express their opinions on medical marijuana. The committee held public hearings (town hall meetings) on the legalization of medical marijuana in four locations in the Commonwealth and created a public feedback website to receive feedback from residents. The summarized Committee report showed that 98.64% of online respondents support legalizing medical marijuana in Kentucky.
Following this report, the state legislature finally passed Senate Bill 47 to legalize medical cannabis in Kentucky on March 30, 2023. The bill was signed into law the following day by Governor Beshear and its provisions are to become effective from January 1, 2025.
Cultivation of marijuana in the United States, the early 17th century.