On Friday, Feb. 2, 2024, KLC published an article stating that the Cabinet for Health and Family Services is moving up the deadline for medical cannabis business operations. We have learned that this is not correct and was based on miscommunication. Additionally, the Cabinet stated that the regulations released in January 2024 established operational requirements, not licensure regulations. Medical cannabis business licensure regulations should be issued in July 2024.
Unless there is a legislative change, the Cabinet cannot issue licenses until Jan. 1, 2025. It is possible that there will be proposed legislation to move up the timeline for the Cabinet to issue medical cannabis business licenses.
All other information in the article remains updated and relevant. Below is information regarding city options for the first steps in addressing medical cannabis businesses.
SB 47 is milestone legislation sponsored by Senator Stephen West and enacted in 2023 that establishes Kentucky’s medical cannabis program. The statute provides an implementation date of Jan. 1, 2025, with a directive for the Cabinet to adopt regulations by July 1, 2024.
The regulations indicate that medicinal cannabis businesses will be highly regulated and monitored. Nonetheless, cities should move up the timeline for crafting policy on whether and how to allow medicinal cannabis businesses to operate.
Cities have the authority to decide whether to allow cannabis businesses to operate within city limits. The statute provides that cities can adopt an ordinance authorizing the businesses, pass an ordinance prohibiting the businesses, or pass a resolution to put the question before city residents in a referendum vote. Additionally, voting citizens can call for a referendum vote by petition.
A referendum vote on the question of whether to legalize cannabis businesses within the city can only occur in regular elections. The next regular election is Nov. 4, 2024. It is important to remember that there is no regular election in Kentucky in 2025.
Cities can adopt an ordinance to prohibit cannabis businesses within the city unless and until a referendum vote changes it. As previously stated, the city can either pass a resolution requiring a referendum vote on the matter or wait for citizens to do so. KLC has a model ordinance that prohibits medicinal cannabis businesses from operating in a city until a referendum vote is held. The model ordinance can be found here.
Once the model ordinance is passed, the city can adopt a resolution to submit the question of whether to allow medicinal cannabis businesses to operate within the city limits at the next regular election. The resolution must be filed with the county clerk by the second Tuesday in August prior to the regular election to be placed on the ballot. The question can also be placed on the ballot through the petition process.
Before circulating a petition to call for the referendum, an intent to circulate the petition that includes the name and address of the person or group responsible, the name and addresses of person or group to whom notices shall be sent, and a copy of the unsigned petition must be presented to the county clerk in which the city is located. Once a correct intent to circulate the petition is filed, the county clerk must forward it to the legislative body of the affected territory.
A petition for a referendum vote on medicinal cannabis sales must clearly state the question for consideration as “Are you in favor of the sale of medicinal cannabis at a licensed dispensary and the operation of other cannabis businesses in ___________?”
Petition signatures must be legibly printed. Next to the signature a voter must also include their address, year of birth, and the date on which it is signed. Each sheet of signatures is required to have an affidavit attached that is executed by the person circulating the petition attesting that they personally circulated the sheet, the number of signatures, the signatures were affixed in their presence, that the signatures are genuine signatures of registered voters in the territory, and that the signers had an opportunity to read the full text of the proposal prior to signing. These requirements are mandatory for a valid petition and the county clerk is required to reject any incomplete petition.
Once a valid petition is filed with the county clerk, the clerk has 30 days in which to complete a certificate and send the certified petition to the legislative body and the person listed in the statement of intent to receive notices by registered mail. If a petition is deficient, the county clerk will state the deficiency and provide 10 days in which to correct the deficiency. Petitions must be certified by the county clerk by the second Tuesday in August prior to the regular election to be on the ballot.
If the referendum vote to allow medicinal cannabis businesses to operate in the territory fails to pass, then it cannot be placed on the ballot again for three years. If the referendum vote passes, then medicinal cannabis sales and business operations may be conducted within the city territory regardless of any local ordinance to the contrary.
Once medical cannabis businesses are authorized to operate in the city, the city can regulate those businesses. The law authorizes cities to regulate the time, place, and manner in which medical cannabis businesses can operate. Additionally, medical cannabis businesses are subject to city planning and zoning regulations.
In the next few weeks, the KLC Municipal Law Department will provide more information on city options for time, place, and manner restrictions, as well as land use regulation of medical cannabis businesses.
Please contact the KLC Municipal Law Department with any other questions.