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Updated: January 24, 2025 @ 7:12 am
In mid-December 2024, Kentucky Gov. Andy Beshear said he hoped patients could buy medical cannabis in Kentucky during the first quarter of 2025.
Business applications of the 74 winners show 66 of them have connections to out-of-state owners or board members. Only eight LLCs were solely connected to Kentuckians.
State records show Dark Horse Cannabis, out of Arkansas, is connected to at least six licenses: a cultivator license, processor license and four dispensary licenses.
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State law requires all of the cannabis sold in Kentucky to be grown and processed in the state, but it could take months before product is available.
LOUISVILLE, Ky. (WDRB) — Michael Adair thought his greenhouse in central Kentucky would be a perfect source for the state’s brand new medical marijuana business.
The co-founder of Kentucky Farmed, Adair applied to grow medical marijuana on his farm in Paris ahead of the state’s lotteries, which chose the cultivators, processors dispensaries that could operate starting Jan. 1.
But Adair wasn’t chosen and, in the weeks leading up to the legalization, he and several other Kentucky hemp farmers shared concerns about how the state’s medical marijuana lottery process played out and how patients will be impacted.
“It hasn’t been fair and equitable like they say it has,” Adair said.
Adair is just one of many Kentucky hemp farmers who said they were told they’d have priority in Kentucky’s medical marijuana rollout. Instead, they said they were left feeling like they got burned by the state.
“I just feel like Kentucky sold out to the highest bidder,” said Nic Johnson of Black Barn Farms in Wilmore.
‘We had to make a decision’
In mid-December 2024, Kentucky Gov. Andy Beshear said he hoped patients could buy medical cannabis in Kentucky during the first quarter of 2025. But Adair and Johnson said patients face a much longer wait.
“The Kentucky people need to know what’s going on,” Adair said. “The patients need to know what’s going on.”
State law requires all of the cannabis sold in Kentucky to be grown and processed in the state, but it could take months before product is available.
“The patient is the No. 1 person to suffer here,” Johnson said.
Business applications of the 74 winners show 66 of them have connections to out-of-state owners or board members. Only eight LLCs were solely connected to Kentuckians.
State records show nearly 90% of the medical marijuana license lottery winners are from out of state. Business applications of the 74 winners show 66 of them have connections to out-of-state owners or board members. Only eight LLCs were solely connected to Kentuckians.
“The way it’s really going to stand is there’s not going to be material in the market for probably 12-18 months,” Adair said.
Adair believes most lottery winners don’t have any infrastructure in place right now. They’ll have to build it out and pass inspections before they can even start growing a plant that takes months to mature.
“That takes six months to build a building — or longer,” Adair said. “Depending on how big of a scale your building’s going to be, (you’ve) got to bring in lights, got to source equipment, you got to hire people. There’s a whole nuance, and then you have to start growing plants.”
At the state’s second medical marijuana dispensary lottery Dec. 16, Beshear stood by the state’s decision to do a lottery, saying he believes any other process would have been stopped by lawsuits.
The governor claimed no state has ever reached this point this quickly and stressed Kentucky is allowing cultivators to bring in seedlings to speed up the process.
“We had to make a decision,” Beshear said. “Do we put the patient first? And, if so, we design a system that will have the fewest likely successful challenges on the lawsuit side.”
Adair believes the state could also issue emergency licenses to Kentucky farmers who are ready to grow to get cannabis to patients even sooner.
“Our solution would be to open up another round of licensing but have some sort of caveat to it where you do have to have infrastructure,” Adair said.
Asked if that’s a viable option, Beshear said was open to it “once we have the program up and running.”
“As we move into the future … we may try to see if we expand cultivators, which I think we can try to help those Kentucky hemp farmers,” he said.
‘Patients have been waiting long enough’
The lottery also raised questions about potential loopholes when it comes to state regulations.
State records show Dark Horse Cannabis, out of Arkansas, is connected to at least six licenses: a cultivator license, processor license and four dispensary licenses. That’s at least one license for each step of the medical cannabis supply chain.
State records show Dark Horse Cannabis, out of Arkansas, is connected to at least six licenses: a cultivator license, processor license and four dispensary licenses.
In investment documents reviewed by WDRB, Dark Horse’s parent company, Arkanna, laid out projections for the Kentucky market. The documents show the company, through management agreements, plans to operate a full vertical that will “allow for increased overall margins and bargaining power within the state.” It estimates earnings of more than $86 million in Kentucky over the next three years.
Under Kentucky regulations, medical marijuana licensees cannot hold licenses in different categories at the same time, regulations that are in place to prevent a monopoly.
When WDRB asked the state’s director of the Office of Medical Cannabis Sam Flynn about this, he acknowledged that he’s seen the documents.
“That documentation spells out that they have acquired a management services agreements and contracts with these businesses,” Flynn said. “They have clarified that they do not own any of these licenses.”
The company echoed the same. State records show Dark Horse CFO Sean Clarkson is listed on hundreds of businesses incorporated in Kentucky ahead of the license lottery.
Clarkson sent WDRB a statement, saying, in part:
“To clarify, neither Dark Horse Cannabis nor Arkanna Investments submitted any applications for licensure in the Kentucky medical cannabis license lottery, nor and did either entity assist any applicants in doing so. Dark Horse Cannabis does not own any medical cannabis business licenses in the Commonwealth, and does not serve as the parent company for any license winning entity. Arkanna Investments does not own any medical cannabis business licenses in the Commonwealth and does not serve as the parent company for any license winning entity.
Rather, Gold Leaf Management, LLC, a trusted cannabis-related management and operations company, assisted a number of independent Kentucky applicant entities through the application process. Through its contractual relationship with independent Kentucky applicants, Gold Leaf Management was authorized and directed to submit these applications for licensure.
I appreciate the opportunity to clear up any confusion concerning the application process and am proud, as a representative of Gold Leaf Management, to continue supporting Kentucky license winning entities as they navigate this important step towards expanding medical cannabis access.”
Beshear has faced repeated questioning about Dark Horse’s connections to license winners in Kentucky.
“I guess the criticism that’s been brought up is about the idea that a management company could potentially team with — and/or ultimately contract with — a number of different owners,” Beshear said. “Now, you could say that’s problematic. You could also say that they bring significant experience that may get this to the market and get it faster.”
‘Waiting long enough’
Julie Cantwell wants the option to buy medical marijuana as soon as possible. Her son has epilepsy, and she’s taken the risk of traveling out of state to get it and bring it back to Kentucky.
Beshear signed an executive order allowing Kentuckians to get their medical marijuana out of state and bring it back until it’s available in Kentucky, but Cantwell hopes the delays are as minimal as possible.
“Patients have been waiting long enough, so let’s not make them wait any longer,” she said.
When it comes to price, she hopes the promise of affordable medical cannabis won’t go up in smoke.
“I think that it’s wrong to make money off of the back of patients and sick people … I don’t think that’s right at all,” Cantwell said. “It has to be accessible and it absolutely has to be affordable, because the program is not going to work if it’s not those two things.”
In mid-December 2024, Kentucky Gov. Andy Beshear said he hoped patients could buy medical cannabis in Kentucky during the first quarter of 2025.
Copyright 2025 WDRB Media. All Rights Reserved.
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