Recently, Clark Countians learned that the issue of whether or not to allow cannabis business operations in Clark County will be on the upcoming November 2024 ballot. 

The Kentucky Association of Counties (KACO), through General Counsel Tim Sturgill, also recently released some information to clarify things.

Officially, medical marijuana will become legal statewide on Jan. 1, 2025. 

Consequently, prospective cannabis businesses are reviewing state regulations and planning to become licensed by the Cabinet for Health and Family Services. 

Local governments have multiple options in facing this legislation: 

• A county and/or city can take no action. Once licensed by the state, medical cannabis businesses would then be allowed to operate in that county or city as early as this year. 
• Pass an ordinance to prohibit cannabis operations. 
• Pass a resolution to put the matter of cannabis operations to a public vote. 
• Place restrictions and/or collect fees for cannabis businesses within that county or city. 

As mentioned, the Clark County Fiscal Court agreed by a 4-1 vote to pass a resolution putting the matter of cannabis business operations to a public vote. 

Background

The 2023 Kentucky General Assembly passed Senate Bill 47, legalizing the use of medical cannabis and establishing a framework for state licensure of cannabis businesses such as dispensaries, cultivators, processors, producers, and safety compliance facilities in Kentucky, effective Jan. 1, 2025. Most of those provisions can be found in KRS Chapter 218B. 

On the final day of the recently concluded 2024 session, the legislature passed House Bill 829, amending the medical cannabis law to expedite the process of licensing cannabis businesses. This change allows the Cabinet for Health and Family Services (Cabinet) Medical Cannabis Program to begin issuing licenses to those businesses this year rather than waiting until January so that operations and products can be developed. Cannabis dispensaries will still not be allowed to open to the public or dispense cannabis until Jan. 1, 2025. 

Types of cannabis businesses

According to the Cabinet, a cannabis business license can be provided for one of the following: 

• Cultivator: Responsible for planting, raising, harvesting, trimming, and curing raw plant material in an indoor facility. 
• Processor: Responsible for processing and packaging raw plant material into usable product formats. Current state law does not allow such products to be smokeable. 
• Producer: Responsible for growing and processing raw plant material. The Cabinet is not currently accepting applications for this license type. 
• Safety compliance facility: Responsible for contamination and purity testing. 
• Dispensary: Responsible for purchasing and selling finished products to medical cannabis cardholders. 

Key dates

As amended by HB 829, state law allows the Cabinet to issue licenses for cannabis business operations effective July 1, 2024. 

Counties and cities can pass an ordinance by Dec. 31, 2024, to prohibit cannabis business operations in their jurisdiction. If the Cabinet has already issued a business license and the local government passes an ordinance by Dec. 31 to restrict this activity, the business would be forced to cease operations. However, if the county or city enacts its prohibition after Dec. 31, 2024, any licensed medical cannabis businesses at that time would be allowed to continue operations. 

Counties and cities should consider making their decision regarding any prohibition, regulation, or zoning of cannabis by Jun. 30, 2024, prior to the Cabinet issuing any cannabis business license to avoid confusion and potentially disgruntled business owners.

If a county or city passes an ordinance prohibiting businesses, the local government must notify the Cabinet within five days of its passage. 

Put it to a vote

Instead of enacting a prohibition ordinance, a county or city may enact a resolution to allow the voters to decide if they favor allowing cannabis businesses to operate within the boundaries of the county or city. The county clerk must receive the resolution by the second Tuesday in August before the regular election to be on the ballot for that election. 

For the question to be on the 2024 regular election ballot, the county clerk must receive the resolution on or before Aug. 13, 2024, for the question to be included this year.

Suppose a county or city prohibits the operation of cannabis businesses. In that case, the voters in that jurisdiction may circulate a petition to place the question of overturning the county or city’s decision on the ballot for the voters to decide.