The Bourbon Trail's state (8)

I believe the answer is:

kentucky

(Other definitions for kentucky that I've seen before include "Producer of Bourbon" , "US Bluegrass State" , "Bluegrass State, famous for breeding horses" , "US state with an annual Derby race since 1875" , "In USA it is know as the Bluegrass State" .)

I've seen this clue in the USA Today.

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