915 KAR 1:010 - [Effective until 5/7/2031] Initial and renewal applications for cannabis business licenses
RELATES TO: KRS Chapter 13B, Chapter 218B, 523.100
NECESSITY, FUNCTION, AND CONFORMITY: KRS 218B.140 requires the Cabinet for Health and Family Services to promulgate administrative regulations establishing initial application and renewal procedures for cannabis business licenses. This administrative regulation establishes those procedures.
Section 1. Types of Applications for Cannabis
Business Licenses.
(1) The cabinet shall
accept the following types of applications for cannabis business licenses:
(a) Initial application; and
(b) Renewal application.
(2) By submitting an initial or renewal
application to the cabinet, an applicant consents to any investigation of the
applicant's ability to meet the requirements of KRS Chapter 218B and 915 KAR
Chapter 1.
(3) An application for
an initial license or renewal license is not complete and shall be rejected by
the cabinet unless:
(a) The payment of the
applicable fee provided in Section 2 or Section 4 is submitted with the
application; and
(b) All required
information for each section of the application, including attachments and any
supplemental information requested by the cabinet, is submitted to the cabinet
within the allowable time period.
(4) An application submitted under this
administrative regulation shall contain the following statement acknowledged by
the applicant: "A false statement made in this application is punishable under
the applicable provisions of
KRS 523.100."
Section 2. Initial License Application Fees.
An applicant for an initial cannabis business license shall pay the applicable
application fee by credit card or automated clearing house (ACH) transfer at
the time of application submission to the cabinet. The initial application fee
is nonrefundable except as indicated below in Section 3(6) of this
administrative regulation. The initial license application fees shall be:
(1) Tier I cultivator: $3,000;
(2) Tier II cultivator: $10,000;
(3) Tier III cultivator: $20,000;
(4) Tier IV cultivator: $30,000;
(5) Processor: $5,000;
(6) Producer: $5,000 plus the applicable
cultivator tier application fee;
(7) Dispensary: $5,000; and
(8) Safety Compliance Facility:
$3,000.
Section 3.
Initial Applications for Cannabis Business Licenses.
(1) An initial license is valid for one (1)
year from the date of issuance shown on the license. The cabinet shall publish
notice of initial license application availability on the Web site for the
Kentucky Medical Cannabis Program, https://kymedcan.ky.gov, including the
time frame during which initial license applications shall be accepted. This
notice shall also state the category and number of cannabis business licenses
available for issuance at the close of the application period.
(2) An applicant shall only use the initial
license application form prescribed by the cabinet and made available through
the Web site for the Kentucky Medical Cannabis Program,
https://kymedcan.ky.gov.
(3) An applicant shall submit an initial
license application to the cabinet in the manner prescribed by the application
instructions.
(4) An applicant
shall apply for a separate license for each location where it intends to
operate a cannabis business. During an initial license application availability
period, an applicant shall only apply for a license in one (1) cannabis
business license type (cultivator, processor, producer, dispensary, or safety
compliance facility) being offered at that time. An applicant may submit
multiple applications for a license within one (1) cannabis business license
type so long as the following criteria is met:
(a) Each application contains a separate and
distinct physical address where the applicant proposes to conduct cannabis
business activities;
(b) Each
application contains documentation of sufficient capital in accordance with
subsection (5)(q) of this section and the applicant shall not use the same
capital for more than one (1) application;
(c) For the four (4) cannabis cultivator
tiers, an applicant shall only submit one (1) application per cultivation tier;
and
(d) For dispensaries, an
applicant shall only submit one (1) application per medicinal cannabis region
as identified in
915 KAR 1:020, Section 3 and
shown on the map published on the Web site of the Kentucky Medical Cannabis
Program, https://kymedcan.ky.gov.
(5) The applicant shall submit the
following in the initial license application:
(a) The legal name, business type, any trade
or doing business as (DBA) name, mailing address, federal tax identification
number, Web site (if any), email address, and phone number of the proposed
cannabis business and confirmation that the entity is registered with the
Kentucky Secretary of State in good standing and authorized to do business in
Kentucky;
(b) The type of cannabis
business license requested;
(c)
Business entity formation documents such as articles of incorporation, articles
of organization, or bylaws;
(d)
Proposed location of cannabis business activities, including the physical
address of the proposed cannabis business and the global positioning system
(GPS) coordinates for any proposed cannabis business activities as well as:
1. Documentation such as a contingent
agreement for property sale or lease or an existing deed or lease that shows
the applicant has the authority to use the proposed location as a cannabis
business for, at a minimum, the term of the license; and
2. A site plan for the proposed cannabis
business.
(e) The name,
address, date of birth, and curricula vitae or resume of each principal officer
and board member of the proposed cannabis business as well as any additional
information required by the cabinet;
(f) Disclosure of any individual or business
entity with an ownership interest of at least ten (10) percent equity or
similar interest in the proposed cannabis business and each identified
individual or entity's ownership percentage as well as any additional
information required by the cabinet;
(g) Disclosure of any parent company or
parent individual that has an ownership interest in the proposed cannabis
business and each identified individual or entity's ownership percentage as
well as any additional information required by the cabinet;
(h) A document showing the ownership
organizational structure of the proposed cannabis business;
(i) The name and address of any individual or
entity providing financial support to the proposed cannabis business that are
not involved in the day-to-day operations beyond providing financial resources
as well as any additional information required by the cabinet;
(j) The name and address of any physician or
advanced practice registered nurse that has an ownership or investment interest
in or compensation agreement with the proposed cannabis business as well as any
additional information required by the cabinet;
(k) Disclosure of whether any principal
officer or board member of the applicant has been convicted of a felony
criminal offense, and if so, a description of each felony offense;
(l) Disclosure of any instances in which a
business or not-for-profit entity that any of the applicant's board members
managed or served on the board of was convicted, fined, censured, or had a
registration or license suspended or revoked in any administrative or judicial
proceeding;
(m) If applicable,
documentation that the applicant is capable of successfully establishing and
operating a cannabis business in the commonwealth, including:
1. Demonstrated experience establishing and
operating a for-profit or nonprofit organization or other business within
Kentucky or any other jurisdiction, and the nature of the business conducted by
the organization;
2. Any history
relating to receipt of a similar license or other authorization in other
jurisdictions, including provisional licenses, suspensions, revocations, or
disciplinary actions to include civil monetary fines or warnings; and
3. Any history of response to suspensions,
revocations, disciplinary actions, civil monetary fines, or warnings imposed
relating to any similar license or other authorization in another jurisdiction,
and the plans of correction or other responses made to those actions.
(n) A description of the duties,
responsibilities, and roles of each principal officer, board member, employee,
and any other individual or entity with a financial interest in the proposed
cannabis business who are not involved in the day-to-day operations of the
business;
(o) A timeline showing
the steps and estimated amount of time the applicant shall take to begin
cannabis business activities in the commonwealth;
(p) Financial plan for the proposed cannabis
business, including budget and cash flow planning and debt
management;
(q) Documentation of
sufficient capital available to the applicant, either on deposit or through
extension of credit from one (1) or more financial institutions, in the
following amounts as applicable:
1. Tier I
cultivator: $50,000;
2. Tier II
cultivator: $200,000;
3. Tier III
cultivator: $500,000;
4. Tier IV
cultivator: $1,000,000;
5.
Processor: $150,000;
6. Producer:
$150,000 plus the applicable cultivator tier amount;
7. Dispensary: $150,000; or
8. Safety Compliance Facility:
$150,000
(r) A summary
of the intended plan of operation that describes, at a minimum, how the
applicant's proposed cannabis business operations shall address:
1. Security;
2. Employee qualifications, supervision, and
training;
3. Transportation of
medicinal cannabis;
4. Storage and
labeling of medicinal cannabis;
5.
Inventory management;
6.
Recordkeeping;
7. Preventing
unlawful diversion of medicinal cannabis; and
8. Workforce development and job
creation.
(s) The name,
mailing address, business title, phone number, and email address of the primary
contact for the application as well as the name, address, and email address of
any entity or individual who assisted the applicant with preparing the
application;
(t) Documentation of
any management service agreement in place for the proposed cannabis
business;
(u) A notarized signature
page signed by the applicant; and
(v) An attestation that:
1. The site of the proposed cannabis business
is not within 1,000 feet of an existing elementary or secondary school or a
daycare center. For the purpose of this administrative regulation, 1,000 feet
shall be measured in a straight line from the nearest property line of an
existing elementary school, secondary school, or daycare center to the nearest
property line of the applicant's proposed place of business;
2. The applicant can continuously maintain
sufficient capital for operations of its proposed cannabis business for, at a
minimum, the term of the initial license;
3. The applicant can continuously maintain
effective security, surveillance, and accounting control measures to prevent
diversion, abuse, and other illegal conduct regarding medicinal
cannabis;
4. The applicant shall
comply with KRS Chapter 218B and 915 KAR Chapter 1;
5. The applicant consents to the cabinet
verifying information provided in the application with any relevant
governmental agency or third party;
6. If issued a license, the applicant shall
pay the applicable license fee within fifteen (15) calendar days of
notification in a manner prescribed by the cabinet.
7. If issued a license, the applicant shall
conduct a criminal background check into the criminal history of each person
seeking to be a principal officer, board member, agent, volunteer, or employee
of the cannabis business before that person begins work and shall not employ,
take on as a volunteer, or have as a board member, principal officer, or agent
any person who was convicted of a disqualifying felony offense or is younger
than twenty-one (21) years of age;
8. The applicant consents to reasonable
inspections, examinations, searches, and seizures as contemplated by KRS
Chapter 218B and 915 KAR Chapter 1;
9. The applicant shall obtain and maintain
workers' compensation insurance for all employees in the commonwealth and shall
pay all required employer contributions to the Kentucky Office of Unemployment
Insurance;
10. The applicant shall
obtain and maintain commercial general liability insurance for $1,000,000 per
occurrence and $2,000,000 per aggregate and commercial automobile insurance for
any vehicle used to transport medicinal cannabis or medicinal cannabis
products;
11. The applicant shall
complete all trainings required by the cabinet for the proposed cannabis
business's principals, agents, employees, and volunteers;
12. The applicant shall establish any
standard operating procedures required by KRS Chapter 218B and 915 KAR Chapter
1 prior to the first date of cannabis business activities in the commonwealth,
including those specific to its cannabis business category. The standard
operating procedures that apply to cannabis businesses include:
a. Security;
b. Recordkeeping;
c. Employee qualifications, supervision, and
training;
d. Quality
Assurance;
e. Adverse Event
Reporting and Recall;
f. Waste
Disposal and Sanitation;
g.
Transportation of medicinal cannabis;
h. Inventory management, including storage
and labeling of medicinal cannabis;
i. Cash management and anti-fraud procedures;
and
j. Preventing unlawful
diversion of medicinal cannabis.
13. For an applicant seeking a safety
compliance facility license, one (1) or more of its prospective principal
officers or board members shall not be a principal officer or board member of a
cultivator, processor, producer, or dispensary applying to operate in the
commonwealth;
14. For an applicant
seeking a cultivator, processor, producer, or dispensary license, one (1) or
more of its prospective principal officers or board members shall not be a
principal officer or board member of a safety compliance facility applying to
operate in the commonwealth;
15.
The applicant consents to sharing medicinal cannabis sales data with law
enforcement;
16. The applicant
shall use the commonwealth's designated electronic monitoring system and seed
to sale tracking system required by
KRS 218B.140 in the manner prescribed by the
cabinet;
17. The applicant has
disclosed all individuals and entities with an ownership interest of at least
ten (10) percent equity or similar interest in the proposed cannabis business
as well as any parent companies and parent company individuals with an
ownership interest in its proposed cannabis business; and
18. The applicant swears and affirms that all
information and documentation provided with the initial license application is
true and correct.
(6) An initial license application received
after the submission time frame stated in the published notice of initial
license application availability shall be rejected by the cabinet without
further consideration along with the return of the initial application
fee.
(7) The cabinet shall
acknowledge receipt of an initial application for a cannabis business license
within fifteen (15) calendar days of submission by the applicant. The cabinet
shall review each application to determine whether the application is complete.
The cabinet shall provide written notice to an applicant when it has determined
the application is complete. If the cabinet determines an application is not
complete, the cabinet shall provide written notice to the applicant of the
identified deficiencies in the application. The applicant shall have ten (10)
calendar days from the date of the deficiency notification to cure the
identified deficiencies and provide any missing information or documentation to
the cabinet in the manner prescribed by the cabinet. If the applicant fails to
cure any deficiency within ten (10) calendar days from the date of the
deficiency notification, the cabinet shall reject the application as
incomplete.
(8) The cabinet shall
provide notification to applicants as to whether an application for a license
has been approved or denied within forty-five (45) calendar days of receiving
an application and determining its complete. Any application denials shall be
done in accordance with
KRS 218B.090(2) and (4),
including providing written notice to the applicant that he or she may file a
written request for an administrative hearing on the application within thirty
(30) calendar days after the mailing date of the notice. Any hearing resulting
from the applicant's written request shall be conducted in accordance with KRS
Chapter 13B.
Section 4.
License Renewal Fees. An applicant for renewal of a cannabis business license
shall pay the applicable annual renewal fee by credit card or ACH transfer at
the time of application submission to the cabinet. The annual renewal fee is
refundable if the renewal application is denied. The annual renewal fees are:
(1) Tier I cultivator: $12,000;
(2) Tier II cultivator: $25,000;
(3) Tier III cultivator: $50,000;
(4) Tier IV cultivator: $100,000;
(5) Processor: $25,000;
(6) Producer: $25,000 plus the applicable
cultivator tier annual renewal fee;
(7) Dispensary: $30,000; and
(8) Safety Compliance Facility:
$12,000.
Section 5.
Renewal Applications for Cannabis Business Licenses.
(1) A renewal license is valid for one (1)
year from the date of issuance shown on the license. The requirements that a
licensed cannabis business shall meet to receive an initial license are
continuing requirements to maintain the license. A cannabis business shall
continuously comply with the licensing requirements of KRS Chapter 218B and 915
KAR Chapter 1 during the initial licensure period and any subsequent renewal
period.
(2) The cabinet shall
notify each licensee at least ninety (90) calendar days prior to the date the
license expires to allow the licensee to begin the renewal process if the
licensee so chooses.
(3) A licensee
shall only use the license renewal application form prescribed by the cabinet
and made available through the Web site of the Kentucky Medical Cannabis
Program, https://kymedcan.ky.gov.
(4) A license renewal application shall be
submitted to the cabinet at least sixty (60) calendar days prior to the
expiration of the license. The cabinet shall reject a license renewal
application if it is not submitted at least sixty (60) calendar days prior to
the expiration of the license and shall return the annual renewal fee to the
licensee along with written notice of the rejection.
(5) A licensee shall submit a license renewal
application to the cabinet in the manner prescribed by the application
instructions.
(6) A licensee shall
include the following information with a license renewal application:
(a) Information regarding any charge, or any
initiated, pending, or concluded investigation or proceeding, during the period
of the initial license or prior renewal period, by any governmental or
administrative agency, including an investigation or proceeding involving
theft, loss, or possible diversion of medicinal cannabis by the licensee or
from the licensee's facility;
(b)
Information regarding the licensee's ability to continue with licensed
activities, including any staffing issues, delays, medicinal cannabis
shortages, medicinal cannabis product recalls, location issues, and financial
issues that occurred since the license was issued;
(c) The licensee's history of compliance with
KRS Chapter 218B and 915 KAR Chapter 1, including a summary of any
noncompliance and corrective action taken during the current and any previous
licensing period or a statement indicating that the licensee has not violated
KRS Chapter 218B or 915 KAR Chapter 1 as of the date the renewal application is
submitted; and
(d) Any additional
information required by the cabinet.
(7) The cabinet shall acknowledge receipt of
a renewal license application within fifteen (15) calendar days of submission
by the applicant. The cabinet shall review each application to determine
whether the application is complete. If the cabinet determines an application
is not complete, the cabinet shall provide written notice to the applicant of
the identified deficiencies in the application. The applicant shall have ten
(10) calendar days from the date of the deficiency notification to cure the
identified deficiencies and provide any missing information or documentation to
the cabinet in the manner prescribed by the cabinet. If the applicant fails to
cure any deficiency within ten (10) calendar days from the date of the
deficiency notification, the cabinet shall reject the application as
incomplete.
(8) If the cabinet
determines that a license renewal application is lacking sufficient information
upon which to make a renewal determination, the cabinet shall notify the
licensee in writing of the factors that require additional information and
documentation. The licensee shall have ten (10) calendar days from the date of
the notice to provide the requested information and documentation to the
cabinet. A licensee's failure to provide the requested information to the
cabinet by the deadline shall be grounds for denial of the license renewal
application.
(9) The cabinet may
conduct an onsite inspection of the licensee's facilities and records to assist
with determining continuing compliance with KRS Chapter 218B and 915 KAR
Chapter 1.
(10) An existing
cannabis business license is immediately invalid upon expiration if the
licensee has not filed a license renewal application and paid the required
renewal fee in accordance with Section 4 of this administrative regulation. If
a licensee properly submits a timely renewal application with applicable
renewal fee, the cabinet may extend its existing license from the date the
existing license expires until the cabinet can complete its renewal application
review and issue a determination.
Section 6. Minimum Performance Standards for
License Renewal.
(1) Pursuant to
KRS 218B.080(5)(b), the renewal
of a cannabis business license shall be contingent upon successful achievement
of minimal performance standards established by the cabinet. The minimum
performance standards for licensees participating in the Kentucky Medical
Cannabis Program are:
(a) The licensee has,
and is likely to continue to maintain, effective controls against diversion of
medicinal cannabis at its facility;
(b) The licensee has not made false or
misleading statements in:
1. A renewal
application or any other application submitted to the cabinet;
2. Any document or written communication
submitted to the cabinet; or
3. Any
verbal communication to the cabinet.
(c) The licensee has a documented history of
compliance with the licensee requirements in KRS Chapter 218B and 915 KAR
Chapter 1;
(d) The licensee has
effectively addressed any identified compliance issues through corrective
action;
(e) The licensee has shown
it has the ability to continue to comply with all state and local laws and
administrative regulations applicable to the activities in which it may engage
under the license, if renewed;
(f)
The licensee has a documented history of successfully addressing and mitigating
any quality or safety issues with its medicinal cannabis or medicinal cannabis
products;
(g) The licensee timely
completes all reporting required by KRS Chapter 218B and 915 KAR Chapter 1;
and
(h) The licensee participates
in surveys distributed by the cabinet and provides full, complete, and timely
responses.
(2) The
cabinet shall deny a renewal application for a cannabis business license if it
determines the licensee has failed to:
(a)
Meet one (1) or more of the minimum performance standards established in this
section; or
(b) Any additional
basis provided in KRS 218B.090.
(3) The cabinet shall provide
written notification to a licensee as to whether its renewal application has
been approved or denied within forty-five (45) calendar days of receiving an
application and determining its complete. Any renewal application denials shall
be done in accordance with
KRS 218B.090(4), including
providing written notice to the applicant that he or she may file a written
request for an administrative hearing on the application within thirty (30)
calendar days after the mailing date of the notice. Any hearing resulting from
the applicant's written request shall be conducted in accordance with KRS
Chapter 13B.
Section 7.
Duty to Report. During the application process, an applicant for an initial
cannabis business license or renewal license shall, upon discovery of any
change in facts or circumstances reflected in the initial application or
renewal application submitted to the cabinet, notify the cabinet in writing of
the change or any newly discovered fact or circumstance that would have been
included in the application if known at the time the application was submitted.
The notification required under this section shall be sent via electronic mail
to kymedcanreporting@ky.gov within twenty-four (24) hours of discovery. Failure
to timely notify the cabinet of a change or newly discovered facts or
circumstances may result in denial of the application.
Notes
STATUTORY AUTHORITY: KRS 218B.140
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