LoRaWAN (Long Range Wide Area Network) has emerged as a key wireless communication technology for smart grid applications due to its long-range connectivity, low power consumption, and cost-effectiveness. However, despite its advantages, LoRaWAN suffers from critical security vulnerabilities that pose risks to smart grid communications. This paper presents a comprehensive review of security challenges in LoRaWAN networks, focusing on key vulnerabilities such as the lack of encryption in join request messages, absence of end-to-end encryption, static keys in Activation by Personalization (ABP), DevNonce reuse, and the lack of mutual authentication. Furthermore, this work evaluates recent research efforts aimed at mitigating these security issues, identifying gaps in key management, join request security, secure randomness, and authentication mechanisms. Based on the findings, this paper highlights future research directions, emphasizing the need for lightweight cryptographic solutions, scalable key distribution mechanisms, and efficient authentication frameworks tailored for resource-constrained IoT devices. Addressing these challenges is essential for ensuring the security and resilience of LoRaWAN-based smart grid applications, safeguarding critical IoT infrastructures from cyber threats.