Are you interested in starting a cannabis cultivation business in Kentucky? With the state’s new medical cannabis program on the horizon, there are ample opportunities for entrepreneurs. This guide will walk you through everything you need to know about obtaining a Kentucky cultivator license and starting your own cultivation business.
Approved Activities for Medical Cannabis Cultivators
Cultivator license holders in Kentucky are authorized to:
- Grow and harvest medical cannabis.
- Process and package cannabis for sale to licensed dispensaries, processors, or producers.
- Conduct research and development to improve cannabis strains and cultivation methods.
However, medical cannabis cultivators are prohibited from:
- Selling cannabis directly to consumers or unlicensed entities.
- Growing cannabis in unauthorized locations or without adhering to state regulations.
Number of Kentucky Cultivator Licenses Available
On July 1, 2024, Kentucky will accept applications for the initial cannabis cultivator licenses. The state has established four tiers of cultivator licenses to accommodate different scales of operations.
| License Category | Number of Initial Licenses |
| Tier I Cultivator | 10 |
| Tier II Cultivator | 4 |
| Tier III Cultivator | 2 |
| Tier IV Clultivator | 0 |
Starting January 1, 2025, the Cabinet will review the need for issuing new licenses on a quarterly basis.
Tiers of Medical Cannabis Cultivator Licenses
Kentucky offers four tiers of cultivator licenses, each with specific requirements and limitations:
- Tier 1: Small Cultivator
- Canopy Size: Up to 5,000 square feet
- Ideal for small-scale growers or startups
- Lower application and licensing fees
- Tier 2: Medium Cultivator
- Canopy Size: 5,001 to 20,000 square feet
- Suitable for mid-sized operations
- Moderate application and licensing fees
- Tier 3: Large Cultivator
- Canopy Size: 20,001 to 50,000 square feet
- Designed for larger operations with significant capital
- Higher application and licensing fees
- Tier 4: Industrial Cultivator
- Canopy Size: Over 50,000 square feet
- Best for large-scale, industrial operations
- Highest application and licensing fees
*fees for each tier found below.
Regulations Relevant to Kentucky Cultivators
Cultivators must comply with several regulations to operate legally. Below are the cultivator-related regulations:
- 915 KAR 1:001 Definitions
- 915 KAR 1:010E Initial and renewal applications for cannabis business licenses
- 915 KAR 1.020E Cannabis business licenses
- 915 KAR 1:030 Cultivator
- 915 KAR 1:080 Transportation and delivery of medicinal cannabis
- 915 KAR 1:090 Advertising
- 915 KAR 1:100 Packaging and labeling of medicinal cannabis
- 915 KAR 1:110 Medicinal cannabis testing
In short, Kentucky cultivator license applicants must comply with:
- Criminal background checks for prospective employees.
- Employees must be at least 21 years old and free of disqualifying felony convictions.
- Cultivators cannot hold management roles or financial interests in safety compliance facilities.
- Applicants must meet qualifications detailed in the relevant administrative regulations.
Application Requirements for Kentucky Cultivator License
To apply for a cultivator license in Kentucky, applicants must meet several detailed requirements as outlined by the Cabinet for Health and Family Services. Here is a summary of the key application requirements:
Legal and Business Information
- Provide the legal name, business type, trade name (if applicable), mailing address, federal tax ID number, website, email, and phone number.
- Confirm the entity is registered with the Kentucky Secretary of State and in good standing.
Ownership and Management Details
- List the names, addresses, dates of birth, and resumes of principal officers and board members.
- Disclose any individual or entity with at least 10% ownership interest in the business.
- Include details of any parent companies and their ownership percentages.
Location and Site Plans
- Submit the proposed location’s physical address and GPS coordinates.
- Provide a contingent agreement for property sale or lease, or an existing deed or lease.
- Include a detailed site plan for the proposed business.
Financial Information
- Show proof of capital requirements, varying by tier.
- Submit a financial plan, including budget, cash flow planning, and debt management.
For a Kentucky cannabis cultivator license, you must be able to show proof of capital in the following amounts to qualify for a license:
Compliance and Background Checks
- Conduct criminal background checks on prospective employees.
- Ensure no employment of individuals under 21 or those with disqualifying felony convictions.
- Disclose any felony convictions of principal officers or board members and any past business non-compliance issues.
Operational Plans
- Provide detailed plans of operation addressing:
- Security
- Employee training
- Transportation
- Storage
- Labeling
- Inventory management
- Prevention of unlawful diversion of cannabis
Additional Documentation
- Include business entity formation documents, such as articles of incorporation or bylaws.
- Provide a timeline for starting business activities and any management service agreements.
- Ensure all required attestations and acknowledgments are included and notarized.
For a complete list of requirements and further details, refer to the full administrative regulation documents, or schedule a call with our Kentucky cannabis consultants to have your questions answered.
Fees & Costs for Cannabis Cultivators in Kentucky
The costs associated with obtaining and maintaining a cultivator license varies by tier, as summarized in the graphic below:
One key thing to note is that you must show proof of the capital requirement to qualify for a cultivator license. This includes documentation of sufficient capital available to the applicant, either on deposit or through an extension of credit from one (1) or more financial institutions.
How to Apply for a Kentucky Cultivator License
Applying for a cannabis cultivator license in Kentucky involves several detailed steps to ensure compliance with state regulations and to position your business for success. Here is a comprehensive guide to help you through the process:
Step 1. Familiarize Yourself with Laws, Regulations, and Requirements
Start by understanding the legal framework governing cannabis cultivation in Kentucky. Review the relevant regulations such as 915 KAR 1:001, 915 KAR 1:010E, 915 KAR 1:020E, and 915 KAR 1:040, which detail definitions, application processes, and operational standards.
Being well-versed in these regulations will help you prepare a compliant application and operate your business within legal parameters.
Step 2. Form a Business Entity
Establish a legal business entity such as a corporation or LLC. This involves registering your business with the Kentucky Secretary of State and ensuring it is in good standing.
Proper business formation is crucial for legal and financial protection and is a required step in the application process.
Step 3. Engage a Consultant
Hiring a consultant who specializes in the Kentucky cannabis industry can provide invaluable guidance throughout the application process. A consultant can help you navigate the complex regulatory landscape, prepare your application, and ensure all requirements are met.
At Quantum 9, our team of Kentucky cannabis consultants has a proven track record of helping clients secure licenses and succeed in the cannabis industry. We’ve worked in the Kentucky medical cannabis space since 2013, and Senator Perry Clark of Kentucky has written a letter of support to Quantum 9, highlighting our expertise and dedication (found here).
With our deep understanding of Kentucky’s regulations and personalized approach, we can significantly enhance your chances of winning a cultivator license. Let Quantum 9 be your trusted partner in this journey.
Step 4. Secure a Location
Identify and secure a suitable location for your cultivation facility. Ensure that the property complies with local zoning laws and state regulations. You will need to provide a contingent agreement for the property sale or lease, or an existing deed or lease, along with a detailed site plan.
Step 5. Raise Capital (if needed)
Assess your financial needs and raise the necessary capital to meet Kentucky’s capital requirements for cultivator licenses. This includes having sufficient funds available on deposit or through credit extensions from financial institutions.
Documentation of your financial stability is a critical part of your application.
Step 6. Prepare Your Application for Kentucky Cultivator License
Gather all necessary documents, including:
- Operating plans
- Financial statements
- Business formation documents
- Proof of capital
- Ownership and management details
- Compliance and background checks
- Detailed site plans
- Additional required attestations and acknowledgments
Ensure all information is accurate, complete, and complies with the requirements outlined in the relevant regulations.
If you’d like help drafting these materials and ensuring they will qualify your entry into the lottery, schedule a call with our cannabis consultants in Kentucky to learn how we can complete them for you.
Step 7. Submit Your Application
Submit your completed application through the online portal, which opens on July 1, 2024. Pay the nonrefundable application fee and ensure all information is thorough and accurate to avoid any delays in processing.
Step 8. Await Review of your Kentucky Cultivator License Application
The application review process is expedited but thorough. The Cabinet for Health and Family Services will review your application for completeness and compliance with all regulatory requirements. Be prepared to respond to any requests for additional information or corrections.
Step 9. Participate in the Lottery
If the number of eligible applications exceeds the available licenses, your application will enter a lottery system. This ensures a fair and transparent allocation of licenses. The Cabinet will publicly announce the date, time, and manner of the lottery.
Closing on How to Start a Kentucky Cannabis Cultivation Business
Starting a cannabis cultivation business in Kentucky involves navigating a complex regulatory landscape. However, with careful preparation and adherence to state guidelines, you can successfully obtain a cultivator license and contribute to the growing medical cannabis industry in Kentucky.
For expert assistance and guidance, contact our cannabis consultants today and take the first step towards your cultivation business in Kentucky.
