‘It was a slap in the face’: Why is the Kentucky cannabis office under investigation?

LEXINGTON, Ky. (FOX 56) — An investigation into Kentucky’s medical cannabis lottery program has been launched by the state auditor’s office.

But aside from Auditor Allison Ball, many Kentuckians are concerned with how the lottery process unfolded.

Like many, Bronson Spears thought investing in a medical marijuana business would help him and his community.

“We thought it’d be a good opportunity to get in on the front side of this thing and help the community and financially help us because it seemed like it could be a good investment,” said Spears.

After applying for one of the medical cannabis dispensary licenses in Region 4 and paying the $5,000 application fee, he wasn’t chosen in the lottery.

“It was definitely a slap in the face,” Spears added. “Because we’re pretty straight-laced, and I’m a proud military man, and I have all of my T’s crossed and I’s dotted, and it just didn’t matter on this.”

Spears has since expressed growing concern about how the state’s lottery process was played out.

“This is just another money grab,” said Spears. “This wasn’t about the public. This was all about money, so it really undermines the whole message behind what the government was trying to do for everybody.”

A big concern is how many of the winners are from out of state.

Data shows that 90% of the lottery winners aren’t from Kentucky, with only eight LLCs connected to Kentuckians.

Back in March, Gov. Andy Beshear said there was nothing illegal with how the process went.

“We operated the system as it was sent to work,” Beshear added. “Did certain owners look like they worked with potential operators? Yes, but in the end, that appears to be legal in the way that it was set up.”

He added that there wasn’t a more “open” way to do the lottery.

“We did it in public. Every single rule was put out there for regulation; the public got to comment on it,” said Beshear. “The legislature got to ask questions, and the lottery itself was done on TV.”

But despite what the governor said, Ball said her office has received numerous complaints about how the office of medical cannabis administered the business licenses and is now launching an investigation, starting by looking into the business license application and award processes.

“I do believe in integrity,” said Spears. “And I believe that $5,000 is a lot of money to a lot of people. And like I said, to me, it was just unfair. It was a lot of hard work, and a lot of hardworking people came up with $5,000 and spent the time and effort to write this application and do these applications, and just have it totally swept under their feet, and they’re swept out from under their feet with no chance of getting it at all.”

Beshear said he stands by the state’s decision to award the licenses through a lottery and said he believes any other process would have been stopped by lawsuits.

The full statement can be read below:
On March 31, 2023, the Governor signed Senate Bill 47 into law, legalizing medical cannabis for Kentucky patients beginning on January 1, 2025.
 
The Office of Medical Cannabis publicly announced and filed its regulations for cannabis business licensing and applications on April 18, 2024.

These regulations were reviewed and approved on numerous occasions by statutory and interim joint committees of the Kentucky General Assembly.

Throughout the entire process we have been committed to transparency, which is why the lottery process was streamed live and online.

To date, no one has filed a legal claim challenging Kentucky’s medical cannabis laws or the Office of Medical Cannabis’ regulations.

The individuals who have come forward to express “concerns” went through the full process and did not complain until after not being selected in the lottery.