Kentucky Marijuana Cultivation License

Does Kentucky Require Marijuana Growers to Obtain Cultivation License?

Yes. In order to cultivate medical cannabis legally in Kentucky, you must obtain a cultivator license from the Cabinet for Health and Family Services (CHFS) under the state's Medical Cannabis Program. Kentucky's medical cannabis program was established pursuant to SB47, the law legalizing medical cannabis in the state. Per Kentucky law, a cannabis cultivation facility cannot be located within 1,000 feet of an elementary school, secondary school, or daycare center. The display of logos, signages, products, or other identifying characteristics to alert the public that medical cannabis is being grown at that facility is not allowed. Also, no licensed cannabis cultivator may cultivate medical cannabis with THC content over 35%.

What Are the Different Types of Cultivation Licenses in Kentucky?

The Cabinet for Health and Family Services (CHFS) issues cannabis cultivation licenses in four tiers:

Tier I cultivator licenses: Tier I cultivator licensees are authorized to grow marijuana on a cultivation area no bigger than 2,500 square feet in size
Tier II cultivator licenses: Tier II marijuana cultivators are authorized to grow cannabis on a maximum cultivation area spanning 10,000 square feet
Tier III cultivator licenses: Holders of Tier III cannabis cultivators are authorized to grow cannabis on a cultivation area no bigger than 25,000 square feet
Tier IV cultivator licenses: Tier IV marijuana cultivators are authorized to grow cannabis on a maximum cultivation area of 50,000 square feet

Who Can Grow Marijuana in Kentucky?

Only individuals or entities licensed by the Cabinet of Health and Family Services under the Kentucky Medical Cannabis Program may cultivate cannabis for medical purposes in the state. Such persons cannot hold management roles or financial interests in safety compliance facilities or marijuana testing laboratories. Licensed marijuana growers in the state must also ensure that anyone who is a principal officer, agent, board member, volunteer, or employer in their business is aged 21 or older and has not been convicted of any disqualifying felony offense.

How to Get a Marijuana Cultivation License in Kentucky

The CHFS lists specific prerequisites for persons applying for a cultivator license. These requirements include:

A non-refundable license application for the appropriate amount. Tier I, Tier II, Tier III, and Tier IV cultivator license applicants must pay $3,000, $10,000, $20,000, and $30,000 application fee respectively
A business plan: A comprehensive business plan is required for obtaining a cannabis business license in Kentucky. The plan outlines the business' mission, goals, target market, and operational strategies. It demonstrates the applicant's understanding of the industry, market potential, and ability to execute their business model and state’s business legal name, DBA name, entity type, organizational structure, and proof of registration with the Kentucky Secretary of State. The plan also provides information about the applicant and individuals, entities, or parent companies with an ownership interest in the business.
Operations plan: Per Section 2 of KAR 1:030, prior to its first day of cultivation activities in Kentucky, a cultivator must establish an operation plan outlining the standard operating procedure for:
- Employment policies and procedures
- Security, including:
  - Alarm systems
  - Video surveillance
  - Monitoring of attendance of staff and visitors
  - Personnel security
  - Monitoring and tracking inventory, including the use of Kentucky's electronic monitoring system and seed-to-sale tracking system established pursuant to KRS 218B.140
  - Transportation of medical cannabis
  - Cash management and anti-fraud procedures
  - Storage of seeds, seedlings, tissue cultures, clones not taller than eight inches, medical cannabis plants, medical cannabis, or medical cannabis products
  - Measures to prevent loitering
- The process of receiving, growing, cultivating, harvesting, handling, packaging, labeling, storing, transporting, and disposing of seeds, seedlings, clones, and medical cannabis
- Workplace safety
- Contamination
- Maintenance, cleaning, and sanitation of equipment used to grow and cultivate medical cannabis
- Maintenance and sanitation of the cultivator's facility
- Application of fertilizers, pesticides, and herbicides to medical cannabis
- Proper handling and storage of chemicals or any substance used in growing medical cannabis
- Recordkeeping and inventory control
- Logging the use of pesticides and chemical applications to medical cannabis
- Quality control
- Investigation of complaints and potential adverse events received from other cannabis businesses, cardholders, or medical cannabis practitioners per the cultivator's operations
- Preventing unlawful diversion of medical cannabis
- A recall plan
- Any other standard operating procedures required for cannabis business under KRS Chapter 218B and KAR Chapter 1
Documentation such as a contingent agreement for property lease or sale or an existing deed or lease showing that the applicant has the authority to use the proposed location as a cannabis business for, at least, the term of the license
A complete physical address and the GPS coordinates affirming that the proposed site for the business is not located within 1,000 feet of an existing elementary school, secondary school, or a daycare center.
Proof of sufficient funds: The applicant must provide proof of sufficient capital to start and maintain the business, either on deposit or via an extension of credit from one or more financial institution
Evidence of criminal background checks of the applicant, principal officer, board member, volunteer, agent, or employee of the cannabis business to ensure that they have not been convicted of any disqualifying offense or are younger than 21.
Site plan: A site plan detailing the proposed facility's layout, including building dimensions, equipment placement, security measures, ventilation systems, and compliance with zoning regulations
Financial plan: In Kentucky, cannabis cultivator license applicants must submit a financial plan that shows the business's financial projections, including startup costs, operating expenses, revenue forecasts, funding sources, cash flow planning, and debt management.
Any other information that the CHFS requires during the application

Upon submitting an application and the necessary documentation via the online application portal, the CHFS will acknowledge receipt within 15 calendar days. If your application is incomplete and inaccurate, you will get a written notice of deficiencies, errors, or missing information identified during the review process. If your application is complete, you will also receive a notification stating that the application is complete.

If deficiencies are noted, applicants have ten 10 calendar days from the notification date to resolve the issues and provide the requested information or documentation. Corrections and additional materials must be submitted through the same saved application on the licensing portal.

The CHFS will inform applicants whether their application has been approved or denied within 45 days of determining the application is complete. In the case of a denial, applicants will receive a written notice and may file a written request for an administrative hearing 30 calendar days from the date of the notice.

The initial licensing application window opens on July 1, 2024, and closes on August 31, 2024. Ten licenses will be issued to Tier I cultivators, four to Tier II cultivators, and two to Tier III cultivators, while Tier IV licenses are not available in the initial licensing period.

Applications will be entered into a licensing lottery if the number of complete applications exceeds the maximum licenses available in that category. Applicants selected for a lottery process will be notified on the day of the lottery and required to pay the appropriate licensing fee within 15 calendar days. However, eligible applicants who applied for a license in a category not requiring a lottery will also be notified by the CHFS of pending license issuance and be required to pay the initial license fee within 15 calendar days of notification. Invoices for the payment will be sent by email and made available under the Invoices tab of the Kentucky medical cannabis portal.

For specific steps to complete a cannabis cultivator license, see the Business Licensing Application Guide on the Kentucky Medical Cannabis Program website.

How Much Do Marijuana Cultivation Licenses Cost in Kentucky?

The following fees are applicable for cannabis cultivator licenses in Kentucky:

Tier I:
- Application fee: $3,000
- Annual licensing fee: $12,000
- Capital requirements: $50,000
Tier II:
- Application fee: $10,000
- Annual licensing fee: $25,000
- Capital requirements: $200,000
Tier III:
- Application fee: $20,000
- Annual licensing fee: $50,000
- Capital requirements: $500,000
Tier IV:
- Application fee: $30,000
- Annual licensing fee: $100,000
- Capital requirements: $1,000,000

Can Licensed Marijuana Cultivators Hold Other Cannabis Licenses in Kentucky?

Applicants for the cannabis cultivator license in Kentucky may apply for multiple licenses in one cannabis business license type. They may also apply for multiple licenses in cultivator, processor, safety compliance facility, or dispensary license type. However, such applications are subject to the following conditions:

Each application within a specific license type must have a unique physical address, and the same capital cannot be used to meet the capital requirements for more than one application.
For cultivator licenses, only one application per cultivator tier is allowed
For dispensary licenses, only one application may be submitted per medical cannabis region

Note that Kentucky cannabis law also states that applicants for cannabis cultivator licenses cannot apply for more than one cannabis business license type.