Kentucky's medical cannabis program reaches a milestone Friday, when Blue Sage opens a dispensary at 617 West Main Street in Lebanon — the 24th store to open out of the 48 the Commonwealth authorized, and the halfway point of a retail network the state began drawing names for in late 2024.

Lexington will not be part of that milestone. The state singled out Fayette County for special treatment when it designed the program, handing it two dispensary licenses instead of the one nearly every other county was allowed. Twenty months after both names were drawn, one of those two stores is open. The other has not opened, and the company holding the license lists its principal office at the Ann Arbor, Michigan, headquarters of a multistate operator that has managed to open two other Kentucky stores this year — in London and in Wilder — but nothing in Lexington.

What the state says the program looks like

The Office of Medical Cannabis sent cardholders its August newsletter Wednesday afternoon. Its snapshot, dated Aug. 25, counts 25,209 active cardholders, 11 cultivators, five processors, two safety compliance facilities and 23 open dispensaries.

Five of those dispensaries were new since the last newsletter: NatureMed in Murray (Calloway County), Speakeasy in Stanford (Lincoln County), Green Releaf in Richmond (Madison County), a High Profile Cannabis Shop in Campbell County, and Blue Sage in Lebanon (Marion County), which the state lists as opening Aug. 28.

The gap between the state's count of 23 and the industry's count of 24 is Lebanon itself — the state's Find a Dispensary page lists only stores already approved to operate, while the Kentucky Cannabis Industry Alliance counted Friday's ribbon-cutting in advance in a release it sent Monday.

The Lexington exception, and the license that never opened

When the state built the dispensary map, it divided Kentucky into 11 regions, guaranteed each region at least four licenses, and capped every county at one — with two exceptions. Fayette and Jefferson counties, the state's two largest, each got their own separate lottery for two licenses apiece.

Fayette's drawing was held Dec. 16, 2024. According to the selectee list the governor's office published that day, under the heading "Region 1 – Bluegrass (Fayette ONLY)," the two winners were DHK KY LLC and ZenLeaf, Inc.

ZenLeaf's license did not stay with ZenLeaf. The Office of Medical Cannabis notes on its licensee list that ZenLeaf asked to sell or transfer the license to KYLX Acquisition Company, LLC; the office approved the request April 3, 2025, and the transfer was completed May 6, 2025. KYLX opened as Speakeasy Dispensary – Lexington at 1849 Alysheba Way on Jan. 15, 2026 — the first dispensary to open anywhere in Kentucky, a day ahead of The Post in Beaver Dam.

DHK KY LLC has not opened. It is still on the state's licensee list under Region 1 Bluegrass, Fayette County. It is not marked as approved to operate, and it does not appear on the Find a Dispensary page at all.

Three Kentucky companies, one Michigan address

DHK KY LLC is not a dormant shell. Kentucky Secretary of State records show the company was organized Aug. 13, 2024, is active and in good standing, and filed its most recent annual report on June 11, 2026. Its registered agent is Capitol Corporate Services at 828 Lane Allen Road in Lexington.

Its principal office is listed as 4420 Varsity Drive, Ann Arbor, Michigan.

That is the address C3 Industries gives as its own headquarters. C3 is a vertically integrated cannabis company founded in 2018 that operates the High Profile Cannabis Shop retail chain.

Two other Kentucky companies list the identical principal office. ERH KY LLC, organized the same day as DHK — Aug. 13, 2024 — and registered in Laurel County, filed its annual report on the same day as DHK, June 11, 2026. Laurel County is where the High Profile store in London opened May 5. C3 Kentucky LLC, organized July 16, 2024 and registered in Campbell County, is where the High Profile store in Wilder opened Aug. 17 — the Campbell County opening the state's newsletter announced this week.

So the same Ann Arbor address sits behind three Kentucky dispensary licenses. Two of them are open and selling. The third is the one the state carved out of its own one-per-county rule to give Lexington.

C3's own website lists six states where High Profile operates — Connecticut, Illinois, Massachusetts, Michigan, Missouri and New Jersey. Kentucky is not among them, though the chain's Kentucky page lists the London and Wilder stores. Neither page mentions Lexington.

The public records establish that DHK KY LLC gives C3's headquarters as its principal office and that two sibling Kentucky licensees give the same address. They do not name DHK's members; the Secretary of State's officer listings load separately and were not part of the record reviewed for this story.

What the rules actually require

Kentucky does not set a hard deadline for opening. Under 915 KAR 1:020, a license is valid for one year from the date of issuance. Section 6 of that regulation says a licensee that has not met "the timeline estimates provided in its initial license application to begin cannabis business activities in the Commonwealth" must notify the cabinet and submit a corrective action plan. If the licensee then fails to comply with its own corrective action plan, the cabinet "may impose penalties or sanctions."

Nothing in the regulation revokes a license simply because a store has not opened. But the regulation does create a paper trail — a notification, a corrective action plan — that would show what DHK told the state about when Lexington's second dispensary is coming. Whether that paperwork exists is a question for the Office of Medical Cannabis.

The Lexington Times put these questions in writing to C3 Industries, the Office of Medical Cannabis and the Kentucky Cannabis Industry Alliance on Wednesday, Aug. 26. None responded immediately. This story will be updated if they do.

The industry's numbers

The Kentucky Cannabis Industry Alliance, a trade association for licensed cannabis businesses, used Friday's Lebanon opening to make a broader case about the program's health. In its Aug. 25 release, executive director Rachel Roberts said the rollout has been "exemplary" and that "pricing has begun falling as more dispensaries and brands enter the market."

The Alliance said the industry has created 407 jobs across cultivators, processors, dispensaries and testing facilities as of July, that 487 registered practitioners are certifying patients, that patients can buy from 14 Kentucky-grown brands, and that July sales totaled $1.87 million with August tracking toward $2 million. Those figures come from the Alliance; the Office of Medical Cannabis does not publish sales or employment data on its website, and The Lexington Times could not independently verify them.

One set of the Alliance's numbers does not add up. The release says Kentucky had 24,332 active cardholders as of Aug. 14, "a 12,032-patient increase from July 2025, representing 109.9% year-over-year growth." Subtracting the stated increase from the stated total gives a July 2025 baseline of 12,300 — which works out to roughly 98% growth, not 109.9%. The state's own figure, 11 days later, is 25,209.

The Alliance also said Sunnyside is scheduled to open in Prestonsburg in October, which would put at least one operating dispensary in each of the state's 11 regions.

That would complete the map by region. It would not complete it in Fayette County, where the state deliberately authorized two stores and one company has held the second license, in good standing, without opening a door, since the week before Christmas 2024.