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Purpose The purpose of this paper is to establish a two-stage grey cloud clustering model to assess the drought risk level of 18 prefecture-level cities in Henan Province. Design/methodology/approach The clustering process is divided into two stages. In the first stage, grey cloud clustering coefficient vectors are obtained by grey cloud clustering. In the second stage, with the help of the weight kernel clustering function, the general representation of the weight vector group of kernel clustering is given. And a new coefficient vector of kernel clustering that integrates the support factors of the adjacent components was obtained in this stage. The entropy resolution coefficient of grey cloud clustering coefficient vector is set as the demarcation line of the two stages, and a two-stage grey cloud clustering model, which combines grey and randomness, is proposed. Findings This paper demonstrates that 18 cities in Henan Province are divided into five categories, which are in accordance with five drought hazard levels. And the rationality and validity of this model is illustrated by comparing with other methods. Practical implications This paper provides a practical and effective new method for drought risk assessment and, then, provides theoretical support for the government and production departments to master drought information and formulate disaster prevention and mitigation measures. Originality/value The model in this paper not only solves the problem that the result and the rule of individual subjective judgment are always inconsistent owing to not fully considering the randomness of the possibility function, but also solves the problem that it’s difficult to ascertain the attribution of decision objects, when several components of grey clustering coefficient vector tend to be balanced. It provides a new idea for the development of the grey clustering model. The rationality and validity of the model are illustrated by taking 18 cities in Henan Province as examples.