HARDIN COUNTY, Ky. — The cultivating and selling of medical cannabis will be legal in Kentucky starting Jan. 1, but some Kentuckians are questioning the lottery process that awarded licenses to those looking to get into the business.

James Paulk invested more than $20,000 into laying the groundwork to open a medical cannabis dispensary in either Hardin or Meade county, including hiring a consulting firm.

Paulk, who has lived in Hardin County for eight years, said he knew it was an expensive lottery ticket but hoped he at least would have fair odds.

“I think it was a 1.45% chance, which is better than playing the Mega Millions,” Paulk said. “Once we started seeing what we were seeing, we were like, 'Man, this might not work out at all.'" 

Paulk’s reason for taking the risk was his mom, who was diagnosed with stage 4 liver cancer a few years ago. Traditional medicine wasn't giving her the relief she needed.

“We started getting her gummies and stuff like that, and it’s helped her a lot, so that was kind of the beginning for me,” Paulk said.

While Paulk was organizing his application for a dispensary license, which would be decided through a lottery process, he said he received a letter from a large cannabis company looking to lease his commercial business in Hardin County.

That’s what first raised his concern about outside companies possibly taking away opportunities from Kentuckians, a point he raised at a town hall meeting.

“What are you doing to stop these multi-state organizations from coming in and inundating your system with tons and tons of license requests using different shell companies?” Paulk said. “They don’t know the people. They don't know who they are, what they are."

"Will it be a bad thing? I don’t know.”

When Paulk received his denial letter, he looked closer and saw what looked like a large amount of applications from single entities.

“The effort is so low that it really disrespects the people who actually put effort into the business and didn’t just throw money at it,” he said.

Spectrum News 1 requested the business applications of the 36 LLCs awarded a license so far and found 31 of them were applicants with out-of-state addresses. Four awardees are associated with the same Arkansas-based company, Dark Horse Cannabis.

“Not having a fair shake at all is where it’s pretty heartbreaking for a lot of people that submitted that were local,” Paulk said. “I think Kentucky definitely could’ve done a much better job at vetting these applications, vetting the companies, maybe even postponing it indefinitely until you find out what’s going on.”

Gov. Andy Beshear, D-Ky., said each of the four businesses associated with Dark Horse has different owners listed and is operating above board.

Bluegrass Cannacare is one of the few Kentucky businesses that received a dispensary license. Jay Armstrong, assistant general manager, said he understands why others are upset. 

“Obviously, we’re incredibly excited to be one of the very few that (received a license)," Armstrong said. "Obviously, we would like to see the Kentucky businesses supported. It should be more focused on individuals who live here in the state."

"You weren’t allowed to apply multiple times, and there were clearly license winners that won multiple times.”

Paulk said if there is another round of applications, he won’t close the door on trying to open a dispensary, but he’s not convinced the process will be any more fair.

The state will select the final 12 dispensary licenses Monday, Dec. 16. Four will be awarded in Jefferson and surrounding counties, four will be awarded in Fayette and surrounding counties, two will go to businesses in Lexington and the final two will go to locations in Louisville.