FRANKFORT, Ky. — An investigation into Kentucky’s medical cannabis program has been initiated by the state auditor amid concerns regarding the lottery system utilized to distribute licenses for cultivating and selling medical cannabis.
State Auditor Allison Ball made the announcement on Thursday, indicating that her office will scrutinize the methods employed by the Office of Medical Cannabis in Governor Andy Beshear’s administration for allocating business licenses.
Kentucky’s lottery-style system attracted thousands of hopeful applicants aiming for a limited number of lucrative licenses, designed to allow the cultivation and sale of medicinal cannabis for eligible patients. Governor Beshear defended the approach last year, describing the lottery as a fair avenue for selection among the numerous applicants.
The governor’s office further stated that the licensing framework received legislative scrutiny and was marked by transparency, notably with lotteries being streamed live. However, Beshear’s spokeswoman, Crystal Staley, noted, “Those voicing ‘concerns’ had partaken in the entire process and did not raise issues until the lottery results were not in their favor.”
However, investigative findings by local media discovered that out-of-state participants had a significant presence in the lotteries, attributed to a surge of applications from well-funded entities.
Reflecting on these concerns, auditor Ball, a Republican underlined: “Our office received numerous complaints regarding the way the lottery process was managed by the Office of Medical Cannabis. It’s vital for Kentuckians to trust in the transparency and integrity of state offices, and my office pledges to uphold those principles.”
When asked about the individuals filing the grievances, Ball’s office responded, “To maintain the integrity of the ongoing investigation, we cannot disclose specifics at this time.”
The lottery system, unveiled by Beshear nearly a year ago, was designed to be an impartial process, eliminating any potential lobbying temptations for preferential treatment. The governor emphasized the importance of limiting licenses to ensure a balanced market for medical cannabis, averting surplus and potential damages to emerging businesses.
Beshear remarked that depending on market demand and potential expansion of qualifying medical conditions, the program could eventually broaden with the issuance of more licenses. The legalization in Kentucky aims to offer relief to individuals with severe conditions such as cancer, multiple sclerosis, chronic pain, and others.
The state’s medical cannabis initiative began at the end of 2024, with infrastructure for cultivation and distribution currently being established. Governor Beshear reported more than 8,000 residents have obtained a medical cannabis card, with new cultivation facilities underway.
“We are swiftly working to make safe and dependable medical cannabis available for our cardholders,” Beshear stated.
This investigation into the medical cannabis program adds to a list of inquiries into the current administration, including a separate probe concerning foster children spending nights in state agency buildings due to placement delays. These preliminary findings instigated further examination by Ball earlier this year.