Kentucky Marijuana Business

Interested in starting a Cannabis business in Kentucky?

What is the Demand for Marijuana in Kentucky?

Marijuana is still illegal in the Commonwealth of Kentucky. However, concerted efforts are on to legalize it for medical and recreational purposes. Recent marijuana legalization bills introduced by state legislators include HB 136, HB 521, and SB 186. While HB 136 sought to legalize medical marijuana in Kentucky, HB 521 and SB 186 aimed to legalize the cultivation, possession, and use of medical cannabis and recreational cannabis for persons 21 years and older. HB 521 and SB 186 also sought to establish a regulatory framework for marijuana retail sales and create a Cannabis Control Board to regulate both recreational and medicinal cannabis markets. However, these bills failed.

According to a September 2022 poll conducted by Team Kentucky Medical Cannabis Advisory Committee, over 90% of the Kentucky adult population supports medical cannabis legalization. This number suggests the potential high demand for marijuana if legalized in the Commonwealth.

The 2018-2019 National Survey on Drug Use and Health (NSDUH) by the Substance Abuse and Mental Services Administration (SAMHSA) estimated that about 553,000 Kentuckians 12 years and older use marijuana. In their report, the Medical Cannabis Advisory Committee also stated that Kentucky residents suffering from chronic medical conditions are leaving the Commonwealth to access medical marijuana in states that have legalized medical cannabis.

How is Marijuana Taxed in Kentucky?

Medical cannabis and recreational marijuana are illegal in the Commonwealth of Kentucky. Although Kentucky has a controlled substance tax, it does not collect tax for marijuana since it is yet to be legalized.

What is the Kentucky Department of Revenue?

The tax agency in the Commonwealth of Kentucky is the Kentucky Department of Revenue (KYDOR). The department operates under the authority of the Finance and Administration Cabinet. While the KYDOR collects tax revenues from several other licensed industries, it has yet to start collecting marijuana tax due to the illegal status of cannabis in the state.

The KYDOR duties include the collection of individual taxes, business taxes, property taxes, and other miscellaneous revenues. Persons interested in contacting the Kentucky Department of Revenue can call (502) 564-4581 or visit the department at:

Kentucky Department of Revenue

501 High Street

Frankfort, KY 40601

The KYDOR also provides contact information for other revenue offices across the Commonwealth and tax area contact information for a specific tax section.

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