South Dakota Cannabis Business Licenses
WHAT IS SOUTH DAKOTA CURRENT CANNABIS MARKET STATUS?
Content Below Last Updated by Point7 3/28/22
South Dakota residents made history on November 3, 2020 when they voted to legalize both medical and adult-use cannabis concurrently — the first state to do so. Voters approved two ballot measures in South Dakota: Measure 26 and Amendment A. Measure 26, which was established by the medical cannabis program in the state, was approved by 70% of South Dakotans, while Amendment A, which legalized cannabis for adults passed by a 54-46% margin. However, after the 2020 election, Kristi Noem filed a lawsuit against Amendment A for over $140,000 in taxpayer money. This significantly delayed the process of adult legalization, and unfortunately, the South Dakota Supreme Court issued a 4-1 ruling, overturning the voter approved adult-use legalization law (Amendment A).
Now, cannabis advocate groups such as the South Dakotans for Better Marijuana Laws are collecting signatures to qualify a statutory adult-use legalization initiative for the 2022 ballot. In order to pass this bill through legislation this year, signatures must be submitted by May 8, 2022. Meanwhile, Measure 26 has been taken through the legislature and South Dakota’s Medical Cannabis program has been launched and is operational. The first medical cannabis establishment registration certificates were issued on January 19, 2022 to dispensaries from Watertown and Keystone. As of March 2022, 33 dispensaries, two manufacturers, and 12 cultivations have been certified.
WHAT ARE SOUTH DAKOTA'S CANNABIS LAWS?
In November 2020 citizens of South Dakota voted on two measures to legalize medical and adult-use cannabis. Initiated Measure 26 led by New Approach South Dakota and South Dakotans for Better Marijuana Laws permits the creation of a legal, medical cannabis program for qualifying patients. Patients must be diagnosed and approved for cannabis treatments by physicians; will be allowed to possess three ounces of cannabis; and permitted to grow up to three plants. The program will be overseen by South Dakota’s Department of Health.
In February 2021, a bill was introduced to delay the implementation of Initiated Measure 26. After a series of amendments during the life of HB 1100, on March 10, 2021 the House of Representatives rejected the Senate-approved medical cannabis plan that would have removed the criminal penalty for possession of less than one ounce of cannabis. The House approved a motion to not attempt a final day compromise with the Senate. Since a compromise was not achieved between the Senate and the House, the program became law on July 1, 2021 as originally written in Initiated Measure 26. The IM 26 task force met on July 7, 2021 to discuss rules and regulations for implementation of the program and on October 26, 2021 the state legislature’s Rules Review Committee voted 6-0 to adopt 148 rules for medical cannabis in the state.
Measure 26 legalized the medical use of cannabis by qualifying patients, including minors. South Dakota patients must obtain a registration card from the South Dakota State Department of Health and non-residents may use out-of-state registration cards. Patients may designate caregivers to assist their use of cannabis and caregivers must register with the Department. Cardholders may possess up to 3-ounces of cannabis and additional amounts of cannabis products. Measure 26 legalizes cannabis testing, manufacturing, cultivation and retail facilities in the state of South Dakota.
South Dakota has one of the harshest cannabis laws in the United States. Cannabis is illegal for all recreational purposes with possession in any amount considered a criminal offense. South Dakota is also the only state where testing positive for cannabis in a drug test is a misdemeanor, and grounds for prosecution. On March 25, 2022, Governor Noem vetoed SB 151, a very modest record-clearing bill which passed both the South Dakota House and Senate this year. SB151 would have automatically removed simple cannabis charges and convictions if the violation was more than five years old. Legislature has the option to override the veto of SB151, but it will be difficult to get enough votes. Cannabis convictions (no matter how small) can affect opportunities relating to housing, employment, education, loans, and military service.
WHAT IS SOUTH DAKOTA'S CANNABIS LICENSING TIMELINE & CANNABIS APPLICATION PROCESS?
The following updates were sourced from the Medical Cannabis in South Dakota website news page.
- March 9, 2022: The South Dakota Medical Cannabis Program performed a random drawing to determine successful applicants for dispensary certification in Rapid City. The drawing was held at the South Dakota Lottery on the third floor of the Dolly-Reed Plaza, 711 East Wells Avenue, Pierre, SD. Members of the public had the opportunity to view the drawing live through a viewing window or via videoconference.
- January 26, 2022: The South Dakota Medical Cannabis Program performed a random drawing to determine successful applicants for dispensary certification in the City of Yankton. The drawing was held at the South Dakota Lottery on the third floor of the Dolly-Reed Plaza, 711 East Wells Avenue, Pierre, SD. Members of the public had the opportunity to view the drawing live through a viewing window or via videoconference.
- January 19, 2022: The Department of Health has issued the first medical cannabis establishment registration certificates to dispensaries in Watertown and Keystone, South Dakota.
- November 18, 2021: Today, in accordance with SDCL 34-20G and the unwavering commitment of Governor Noem and the South Dakota Department of Health to deliver a safe and responsible medical cannabis program, the first medical cannabis patient cards were printed and issued. See news release here.
- November 8, 2021: Physicians can now access the medical cannabis patient portal and begin certifying medical cannabis patients. Once certified by a physician, patients will then be able to access the online application process and complete their applications. Approved applicants will have a medical cannabis patient card mailed to them. See Patient Process Overview for more information.
- October 26, 2021: The Rules Review Committee approved the Department of Health Revised Rules with a 6-0 vote.
- October 25, 2021: The South Dakota Department of Health released medical cannabis establishment application form.
WHAT IS THE HISTORY OF CANNABIS IN SOUTH DAKOTA?
As of July 1, 2021, cannabis in South Dakota is legal for medical use, having been legalized by Measure 26 on November 3, 2020. Prior to then, cannabis in South Dakota was fully illegal, with South Dakota being the only state in the United States to outlaw ingestion of controlled substances. South Dakota would have been the first state in US history to legalize recreational and medical cannabis simultaneously, but Amendment A was struck down as unconstitutional in February 2021. Attempts to delay the implementation of the medical cannabis program failed and therefore became legal in July 2021 under the timeframe established by Measure 26.
Like many states, South Dakota outlawed cannabis during a wave of cannabis prohibition in the 1930s. Cannabis remains illegal throughout the state for all types of usage and possession. Many attempts have been made to decriminalize cannabis use/possession, but all efforts eventually failed, or were quickly repealed.
DOES SOUTH DAKOTA HAVE A HEMP PROGRAM?
South Dakota’s Industrial Hemp Program is regulated by the South Dakota Department of Agriculture & Natural Resources.
PREPARING FOR THE SOUTH DAKOTA CANNABIS MARKET
We are ready to support your team as you prepare for cannabis licensure in South Dakota. Contact Point7 to discuss the fully customizable products and service packages available that have proved successful for operators around the country.