LOUISVILLE, Ky. — By early Thursday morning, the Kentucky Medical Cannabis Program stated that there were 1,227 applications total for a medical cannabis business license.
The vast majority of those applications, 1,002, were for dispensaries.
However, on Friday evening the program's website, updated the numbers to 1,851 total applications, with a huge boost to 1,593 applications just for dispensaries.
That was by 7:07pm Thursday night.
If you do the math, that's approaching $8 million the state has collected so far in $5,000 non-refundable application fees for dispensaries alone.
With the influx of applications, and just 48 dispensary licenses statewide, it's clear winners will be decided in a lottery in October.
At this point, each application has a 3% shot of getting picked.
Kentucky small business owner, Dee Dee Taylor, who is hoping to expand on her hemp business with medical marijuana, isn't feeling good about her chances.
"Pretty indifferent, I'm trying to be realistic and not optimistic, and try not to be too pessimistic about it either," Taylor said.
Even though the state touts the lottery as the fairest and most transparent shot at a license, Taylor has a very strong feeling that big cannabis established for years outside the state has much better odds.
"Multi state cannabis operators, they're now infiltrating Kentucky," Taylor said. "They're filing multiple LLC's and creating new Kentucky companies, and then they're using one address to literally stack the lottery system."
The strategy is known as app (application) stacking.
By rule, one person or business entity is allowed to submit only one application for a dispensary in each of the 11 designated regions.
The concern over app stacking was brought up on August 13 by State Sen. Stephen West, R-District 27, at the Administrative Regulation Review Subcommittee.
FOCUS brought the issue to his office's attention days prior to the hearing.
The medical cannabis program's executive director, Sam Flynn, answered that app stacking is strictly prohibited.
"Also, we would know about it, and just to be clear this has not come up," he said.
Flynn's assurances, however, came when there were just 82 applications filed.
"I don't feel like it's shady, it's shady," State Rep. Jason Nemes, the Majority Whip, said about the real potential of app stacking in the process.
On applications, the submitter is supposed to disclose whether or not they're under a parent company.
"There are ways around the rules, right?" Nemes said providing this scenario. "I'm going to own this one, and if I get it, I'm going to have a profit-sharing agreement with you. You're an owner of this other application, and you've got a profit-sharing agreement with me, that's not prohibited. It should be."
Nemes agreed having multiple applications on one location is a definite red flag, and if app stacking is happening, applicants working together could potentially get more than one license in one region.
"Probably what they'll do is sell it, but they could certainly move it to another place, but the point is they've perverted the system in the first place."
Nemes acknowledged that it was likely too late to change the rule to one applicant per one location for this round, but he wants to take a close look at the applications when the portal closes Saturday just before midnight.
"Who the companies are, who their ownership is, where they would go," Nemes said. "There's going to be some funny business, no doubt about that."
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