‘We started getting calls': Kentucky Auditor probes into lottery process for marijuana business licenses
FRANKFORT, Ky. (FOX 56) — When Kentucky opened the door to medical cannabis, it promised opportunity. Not long after, questions started to be asked.
'We began to get calls from reporters, a couple of reporters that reached out to us early on,' said Kentucky Auditor Allison Ball. 'And so that was on our radar screen pretty early, and then we started to get a number of calls from Kentucky farmers and Kentucky small businesses.'
That's when the digging started.
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'We discovered two things that were recurring situations from people who would call us,' Ball added. 'One was app tracking, so it's a way, really, to beat the system; it's application stacking. So it'll be one business that sets up a lot of other LLCs so they can apply multiple times.'
She said another red flag is vertical integration, where one company doesn't just grow the cannabis but also tests it, processes it, and sells it.
'We know of at least one out-of-state company, an Arkansas company, that is fully integrated, that they got a cultivator license, and they got a processing license, so they actually got four dispensary licenses, and told us there is a real issue with vertical integration,' Ball explained. 'We know for sure of at least one company, and we think there's more.'
Now, Ball wants answers and has launched an investigation into the state's Office of Medical Cannabis, asking tough questions about how licenses were handed out and who benefited.
For background, the state handed out 48 licenses for 11 regions throughout the state, but received more than 4,000 applications.
'It's supposed to give everybody a fair shot at this, whether you're a small farmer from rural Kentucky or you're a small business from our larger areas, whatever you are, you've got a fair shot at getting one of these licenses,' said Ball.
She said her office will start its investigation by looking into each business.
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'We started getting calls': Kentucky Auditor probes into lottery process for marijuana business licenses
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'When you actually look into it, the location wasn't real,' Ball added. 'So that's concerning, especially if you have a regulation that is designed to prevent this from happening.'
Ball doesn't expect the investigation to delay the process, but said investigators are focused on making sure the lottery was conducted fairly.
Meanwhile, Governor Beshear said there was nothing illegal in how the lottery was conducted.
Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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