KY medical marijuana companies file lawsuit claiming program rollout is unconstitutional

OG Article  By Marina Johnson The Detroit News Watch Today's LIVE Episode on YouTube, X, and Rumble

July 07, 2025

Medical marijuana companies in Jefferson County have filed a lawsuit against the commonwealth and former Office of Medical Cannabis executive director Sam Flynn, alleging the rollout of Kentucky's medical marijuana program is unconstitutional.

Attorney James Gregory Troutman said his clients, a group of investors who had originally hoped to secure processing and dispensary licenses, allege the Kentucky General Assembly illegally delegated authority to create the commonwealth's licensing districts and issuance limits to the Kentucky Cabinet of Health and Family Services. The suit also asks the court to pause all operations for currently licensed medical marijuana business and issue licenses to the plaintiffs, who were not chosen to receive them during the lotteries that took place in 2024.

"We're taking issue with the way the legislature failed to be the ones who decided how the state would be carved up for licensing purposes into various regions and how those licenses would be allocated within the regions. We believe that was a function that the legislature — and the legislature only — had to address," Troutman said.

The filing of the lawsuit follows several complaints from community members, as well as local hemp and cannabis business owners and farmers, in regards to the program's application process and lottery drawing.

Several in-state business owners allege some companies out-of-state businesses used loopholes in state law to create multiple LLCs in Kentucky, enabling them to submit several applications. Those applications then allegedly allowed some companies to achieve "vertical integration," or having licenses across all three of Kentucky's medical marijuana licensing categories, which state law was intended to prevent.

The claims have since prompted an investigation into the program by Kentucky Auditor of Public Accounts Allison Ball, which was formally launched in April.

Troutman, who expects the commonwealth to make a motion to dismiss the case or opt for an application to transfer the venue to Franklin County or another outside of Louisville, says he is prepared for anything that may be thrown at him.

"Awhile back, in response to new stories about the state auditor's investigation, the governor actually said that if any of the parties don't like how things are done, they should file suit," he said. "Well, here we are."

The Louisville-based attorney says that if the judge rules in favor of his clients, the issues will have to be addressed next January in the legislative session.

"They'll have to adopt an expansion or amendment to their enabling legislation from 2023 to specifically address how the state gets carved up, how the licensing is going to be done," Troutman said. "The legislature needs to make that call, not the agency."

More: Kentucky bill legalizing medical marijuana signed into law

Office of Medical Cannabis spokesperson Kendra Steele said the general assembly gave the Office of Medical Cannabis the duty to create a fair licensing structure in 2023.

"With the General Assembly’s approval, the Office developed a lottery system that is completely open, transparent and viewable to the public," Steele said. "We are confident that any court will uphold the process."

Reach Marina Johnson at Marina.Johnson@courier-journal.com.