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Are you wondering how to open a dispensary in Kentucky? This page provides the latest news and information about starting a cannabis business in Kentucky. It includes important considerations for the future of the industry.
Kentucky legalized medical cannabis in 2023 with the passage of Senate Bill 47, but the program did not take effect until January 1, 2025. Under this law, qualifying patients (with conditions like cancer, chronic pain, epilepsy, PTSD, etc.) can obtain a state-issued medical cannabis card and purchase regulated medical cannabis from licensed dispensaries.
In contrast, recreational (adult-use) cannabis remains illegal. The state’s cannabis market is currently limited to the medical program, although future legislation would be required to authorize adult-use sales.
On October 5, 2023, Gov Andy Beshear launched a government website, kymedcan.ky.gov, to help people track the progress of the state’s medical marijuana program
On April 17, 2024, Governor Beshear signed House Bill 829, moving the medical cannabis licensing application process up from January 2025 to July 2024.
On July 1, 2024, Kentucky began accepting applications for medical marijuana businesses and healthcare providers to certify eligible patients. This early start aims to make medicinal cannabis available by early 2025.
On September 26, 2024, Kentucky’s governor announced the approval of the state’s first medical marijuana business license for a testing lab and scheduled a lottery for cultivator and processor licenses on October 28, 2024.
On January 1, 2025, Kentucky’s medical cannabis program launched, allowing state-registered patients to legally access cannabis medicine. Ahead of the rollout, the Office of Medical Cannabis conducted licensing lotteries, awarding 48 dispensary licenses from nearly 5,000 applications, including 4,075 for retail.
In May 2025, Beshear announced the launch of a new online dispensary locator map, enabling patients to view the planned locations of dispensaries across Kentucky. While none are open yet, most licensees have completed inspections and are approved to begin operations later in 2025.
On August 1, 2025, Kentucky approved its first medical marijuana dispensary license, marking a major step forward in implementing the state’s medical cannabis program. The approved dispensary, located in Beaver Dam, is among the first cleared to open under the new law. This milestone signals that Kentucky’s medical cannabis market is becoming operational, following the start of licensed cultivation earlier in the year.
Kentucky has the potential to generate significant revenue by legalizing and regulating marijuana. The state could earn tens of millions in tax revenue without increasing taxes, which could fund public services like pensions, road construction, and education.
In addition to new revenue, legalizing marijuana could save the state millions by reducing law enforcement and legal costs associated with criminalizing simple possession.
Kentucky allows local governments to opt in or out of permitting medical cannabis businesses within their jurisdictions. By default, all counties and cities were opted in when the state’s medical cannabis law took effect, but they had the option to pass ordinances to opt out.
As of May 2, 2025, 23 counties and 55 cities have formally opted out of allowing cannabis businesses. Meanwhile, 14 counties and 74 cities have proactively opted in by passing ordinances to affirm their participation in the state’s medical cannabis program.
These local decisions directly impact where dispensaries and other cannabis businesses can legally operate, making it essential for entrepreneurs to verify a locality’s opt-in status before applying for a license. This information is publicly maintained by the Kentucky Office of Medical Cannabis at kymedcan.ky.gov.
As part of the dispensary license application, applicants must provide the physical address, mailing address, and GPS coordinates of the proposed dispensary. According to the Kentucky Medical Cannabis Program:
Applicants are also required to:
These requirements must be met at the time of application submission.
Starting January 1, 2025, patients in Kentucky with a doctor’s or nurse practitioner’s recommendation can use medical marijuana for conditions like cancer, severe pain, epilepsy, multiple sclerosis, muscle spasms, chronic nausea, PTSD, or other conditions approved by the Kentucky Center for Cannabis.
Patients will be able to purchase edibles, oils, tinctures, and capsules, but smoking raw cannabis flower will not be allowed. Instead, they can purchase cannabis flowers for vaporization.
This timeline outlines the key dates and deadlines for the 2024 cannabis business licensing process.
Here’s an overview of the types of cannabis business licenses and their initial availability.
Opening a dispensary in Kentucky requires careful preparation and adherence to the state’s medical cannabis licensing regulations. This step-by-step guide is based on the official Business Licensing Application Guide issued by the Cabinet for Health and Family Services as part of the Kentucky Medical Cannabis Program. Follow these instructions closely to ensure your application is accurate, complete, and submitted within the required timeframe.
You will need to upload the following in the application:
Provide information in these sections:
Applicants must meet the qualifications outlined by the Kentucky Medical Cannabis Program, conduct criminal background checks on employees, and ensure no employees are under 21 or have been convicted of a disqualifying felony. Additionally, an applicant cannot hold a management role or financial interest in a safety compliance facility.
To open a dispensary in Kentucky, the Kentucky Medical Cannabis Program requires a sufficient capital investment of $150,000 for the cannabis dispensary license application. In addition to this capital requirement, there are several fees involved: a nonrefundable application fee of $5,000, a nonrefundable initial licensing fee of $30,000, and an annual licensing fee of $30,000. For information on fees associated with other types of cannabis licenses, you can check here.
It’s important to note that opening a dispensary in any state requires significant financial investment beyond just the licensing fees. There are several other costs associated with setting up and operating a dispensary, including:
If you are looking for further information regarding the costs involved in opening a dispensary, we recommend referring to our comprehensive guide on the subject.
Below is a detailed breakdown of the nonrefundable application fees, initial licensing fees, and annual renewal fees associated with different cannabis business licenses in Kentucky.
License Type | Application Fee | Initial Licensing Fee | Annual Renewal Fee |
Cultivator – Tier I | $3,000 | $12,000 | $12,000 |
Cultivator – Tier II | $10,000 | $25,000 | $25,000 |
Cultivator – Tier III | $20,000 | $50,000 | $50,000 |
Cultivator – Tier IV | $30,000 | $100,000 | $100,000 |
Processor | $5,000 | $25,000 | $25,000 |
Dispensary | $5,000 | $30,000 | $30,000 |
Safety Compliance Facility | $3,000 | $12,000 | $12,000 |
Currently, possessing up to eight ounces of marijuana is classified as a misdemeanor under state law, punishable by up to 45 days imprisonment and a fine of $250 in Kentucky.
In 2025, Kentucky lawmakers introduced several bills aimed at legalizing recreational (adult-use) cannabis. Notably, SB36/HB105 proposed constitutional amendments to allow adults 21 and over to possess up to one ounce of cannabis and cultivate up to five plants. Another measure, SB33, sought to decriminalize possession of up to eight ounces and establish an expungement process for certain offenses. However, all these bills failed to advance and are considered dead for the year.
Despite facing setbacks, proponents of legalizing recreational use of marijuana in Kentucky remain optimistic about the future. The push for medical marijuana may ultimately pave the way for the legalization of recreational marijuana.
Limited License Supply Means High Value: With only 48 dispensary licenses issued statewide and one per region per entity, Kentucky’s tightly regulated approach offers license holders a unique, protected market position. While competitive, this model helps ensure long-term value for successful applicants.
Substantial Investment Required: Opening a dispensary involves upfront costs—including application and license fees, location build-out, staffing, and inventory. However, for well-prepared operators, this investment supports entry into a controlled market with limited competition and strong patient demand.
Strong Compliance = Long-Term Stability: Kentucky’s detailed regulations around security, inventory tracking, packaging, and operations are designed to maintain a professional and compliant industry. Operators who establish strong internal processes early will be well-positioned for sustainable growth and regulatory trust.
New Market Dynamics Present Opportunity: While the supply chain is still developing, early entrants have the chance to build brand loyalty and shape product availability. Dispensaries can play a key role in educating patients and helping meet demand as cultivation and processing scale up.
Cash-Based Operations Encourage Financial Innovation: Federal restrictions still limit traditional banking options, but this has led to growth in cannabis-focused financial services, private investment, and creative solutions for secure transactions and accounting.
Navigating Federal Law Confidently: Although cannabis remains federally illegal, Kentucky’s program offers strong state protections. Operators who stay informed and compliant are positioned to adapt as national policy evolves.
Local Engagement Builds Trust: Some communities may have questions about cannabis businesses. Proactive outreach and education can turn skepticism into support—helping dispensaries become trusted local resources.
Operational Readiness is a Strategic Advantage: From staffing and training to technology and patient onboarding, early planning helps dispensaries run efficiently from day one. Operators who focus on professionalism and patient care will stand out as the market matures.
What kind of license do I need to open a dispensary in Kentucky?
To open a dispensary in Kentucky, you will need a medical cannabis dispensary license. This license allows you to legally sell medical cannabis to qualified patients in compliance with state regulations.
Who can a Kentucky dispensary sell medical cannabis products to?
Kentucky dispensaries can sell medical cannabis to registered qualified patients, designated caregivers, and qualified out-of-state visiting patients with valid medical cannabis cards.
What kind of products can be sold in a dispensary in Kentucky?
In Kentucky dispensaries, you are allowed to sell medical cannabis products. These can include cannabis flowers, tinctures, oils, edibles, and other approved forms of cannabis products. All products sold must meet the regulatory standards set by the Kentucky Office of Medical Cannabis and must be lab-tested for quality and safety.
What are the approved activities for a Kentucky dispensary?
Approved activities include acquiring medical cannabis from licensed cultivators, processors, producers, or other dispensaries, selling and delivering cannabis products to cardholders, and providing educational materials to patients. Dispensaries may also offer delivery, drive-thru, or curbside pickup services.
What are the prohibited activities for a Kentucky dispensary?
Prohibited activities include selling cannabis products with THC levels exceeding legal limits, selling products containing vitamin E acetate, dispensing cannabis to minors or cardholders under 21 for vaporization, allowing anyone under 18 on the premises, and operating within 1,000 feet of a school or daycare center.
Are there any location restrictions for a dispensary in Kentucky?
Yes, dispensaries in Kentucky must be located in commercial or industrial zones and at least 1,000 feet from an elementary or secondary school or a daycare center. They are not allowed in residential or agricultural areas. Local governments may have additional zoning regulations, so it’s crucial to research your location and collaborate with officials and community members to ensure compliance and community fit.
How can I find out more information about opening a dispensary in Kentucky?
For more detailed information about opening a dispensary in Kentucky, you can visit the official website of the Kentucky Office of Medical Cannabis. They provide guidelines on licensing requirements, application processes, and compliance standards. Consulting with a cannabis business expert may also help navigate the complexities of the process.
Over the next few weeks and throughout 2025, there will be numerous developments that will impact the pace of progress, the prerequisites for establishing a marijuana dispensary, and the timeline for accepting license applications in Kentucky. To stay informed on all significant updates and access hard-to-find news and commentary related to how to open a dispensary in Kentucky and Kentucky Legalization, please subscribe to our Cannabis Mailing List. This will cover various topics, such as:
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From gathering the right financial documents to preparing your operational plan and navigating the review window, every step of Kentucky’s medical cannabis licensing process matters. Our team at Cannaspire has helped applicants just like you meet the strict requirements.
Get hands-on support with your Kentucky dispensary license application today. Visit our Kentucky Cannabis Consulting page.
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