Sioux Falls, South Dakota Sets Cap on Medical Marijuana Dispensaries

The city council in Sioux Falls, South Dakota on Tuesday night approved a proposal that will set a cap on the number of dispensaries, while also setting the cost of a license at $50,000. That fee, according to the Argus Leader, was half the $100,000 that had been requested by City Hall, but there is a chance the licenses could go much higher on the secondary market after the city council allowed them to be transferable.

According to the Argus Leader, Sioux Falls Mayor Paul TenHaken was opposed to the provision allowing licenses to be transferred is concerned “that allowing them to be sold on the secondary market will give them an artificial value, just like has happened with liquor licenses” in South Dakota.

As the Argus Leader explained, “a new liquor license from the city goes for about $200,000, but a state-set cap on the number of them the city can sell has driven the price they go for on the secondary market up to $300,000 or higher.”

There were also apparently objections from members of the public to the five-dispensary cap imposed by the city council. Local television station KELO reported that the council also voted to require dispensaries “to be 500 feet from parks, daycares, churches, attached dwellings and detached dwellings” as well as “more than 1,000 feet from schools.”

Sioux Falls is Implementing the Will of State Voters

South Dakota voters approved a ballot initiative last year legalizing medical marijuana in the state. The voters also passed a constitutional amendment that appeared on the same ballot that legalized recreational pot use for adults, but that was challenged in court and ultimately ruled unconstitutional by a circuit judge in February. Supporters of the recreational marijuana amendment challenged that ruling, and it is now being considered by the South Dakota Supreme Court.

South Dakota’s medical marijuana law officially took effect on July 1, although the state has said that sales likely will not begin until July 1, 2022. But the Flandreau Santee Sioux Tribe on the eastern edge of the state opened a dispensary that first week. The dispensary, located on the tribe’s reservation a little less than an hour from Sioux Falls, was inundated with customers after its opening in July.

“The grand opening of the Flandreau Santee Sioux Tribe’s Native Nations Dispensary went very well, and customers have flooded the dispensary all day,” Flandreau Santee Sioux Attorney General Seth Pearman told Native News Online. “The Tribe is confident that the regulatory structure it put in place will create a safe product that will benefit customers.”

South Dakota Gov. Kristi Noem’s office has said that South Dakota highway patrol officers will not honor tribal-issued medical cannabis cards if they are issued to non-tribal members.

Noem, a possible 2024 Republican presidential candidate who has been staunchly opposed to the state legalizing recreational marijuana, has appeared in PSAs airing in the state in which she explains how South Dakota intends to implement the new medical marijuana law.

“In 2020, the voters of South Dakota spoke up and approved medical cannabis,” Noem says in the ad. “One of my jobs as governor is to make sure the will of the people and all constitutional laws are enforced. The medical cannabis program is on schedule, and we’re working to implement a responsible program that follows the direction given by the voters.”

“Other states have made mistakes that we do not want to repeat,” she adds.

Last week, a South Dakota legislative subcommittee recommended a ban on home cultivation for medical marijuana patients.