South Dakota Takes Step Toward Approving Medical Marijuana Rules

The legislative panel responsible for approving the rules that will govern South Dakota’s new medical marijuana law has approved a number of proposed regulations and sent other proposals back for review, in what was a crucial administrative step toward implementing the new statewide program.

The Legislature’s Rules Review Committee on Monday gave “the green light to most of the 124 pages of proposed regulations for medical cannabis in South Dakota from the state Department of Health,” local television station KELO reported.

But the committee rejected other proposed regulations. According to the Associated Press, the lawmakers on the panel rejected one proposal “that would have limited the amount of high-potency marijuana that patients could possess, required medical practitioners to write a recommendation for patients who wanted to grow more than three cannabis plants and defined a list of conditions that would qualify for a medical marijuana recommendation.”

All told, the committee sent “a half-dozen of the proposals” back to the Department of Health for review, according to KELO.

Other rules approved by the committee included one that “set a $75 application fee for medical marijuana cards and discount the fee to $20 for low-income applicants,” according to the AP, and another that set “a state licensing fee of $5,000 for any medical marijuana facility.”

The Associated Press noted that a “host of lobbyists, representing both medical groups and the cannabis industry, objected to some rules, though nearly all praised the Department of Health’s rule-making process.” The Department of Health was also saluted by South Dakota Gov. Kristi Noem.

“I commend the Department of Health for its hard work to streamline the process,” she said in a statement, as quoted by the Associated Press. “South Dakota will continue to implement the best, most patient-focused medical cannabis program in the country.”


South Dakota Compromises

Still, not everyone was as enthused by the slate of proposals. Troy Heinert, the Democratic leader of the South Dakota state senate, represented the lone vote on the committee against the proposed regulations.

“As I talk to people across the state they wanted it legalized, taxed and done. I think we’ve made it more difficult than we had to,” Heinert said, as quoted by KELO. “From our side of the aisle, we’re all about freedom.”

Indeed, many of the state’s leaders have been clearly reluctant to embrace the new medical marijuana law, despite 70 percent of South Dakota voters approving the measure that legalized the treatment in last year’s election.

The law officially took effect on July 1, but so far, the only dispensary that has opened its doors to customers is one on an Native American reservation located on the eastern edge of the state. 

Noem, a possible Republican presidential contender, has said that highway patrol officers in the state won’t honor tribal-issued medical cannabis cards if they are issued to non-tribal members.

She has also appeared in PSAs throughout the summer explaining how the state intends to implement the law. 

“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,” Noem says in the ad. 

The state has said that sales will likely begin next summer. Meanwhile, communities throughout South Dakota are hashing out their own local ordinances governing medical cannabis dispensaries. Last week, members of the city council in Sioux Falls, the largest city in South Dakota, approved a slate of proposals, including one that will place a cap on the number of dispensaries at five.

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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.

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South Dakota Subcommittee Says No to Home Grown Medical Marijuana

A recommendation from the South Dakota Legislative subcommittee comes from a group of lawmakers working to draft rules to limit provisions of Initiated Measure 26 (IM26), a ballot measure to legalize medical marijuana that was passed by nearly 70 percent of South Dakota voters in the November 2020 general election.

The announcement came from a subgroup of the South Dakota Marijuana Summer Study Committee, a panel of lawmakers that was assembled to make changes to IM 26. In addition to eliminating home cultivation, the panel is considering proposals including repealing legal protections for marijuana businesses and their attorneys and another that would allow local governments to prohibit cannabis businesses to operate in their jurisdictions.

“We’re not here to say no to marijuana,” said Republican state Representative Carl Perry. “What we’re here doing is making sure it’s good [policy].”

South Dakota Voters Approved Medical Marijuana in November

Following the passage of IM 26 and a separate ballot measure to legalize cannabis for use by adults, South Dakota Governor Kristi Noem announced that implementing the medical marijuana initiative would be delayed. The delay came despite provisions of state law that approved ballot measures take effect on July 1 of the year following passage, which would have been this year.

“We are working diligently to get IM 26 implemented safely and correctly,” Noem said in a statement released by her office. “The feasibility of getting this program up and running well will take additional time. I am thankful to our legislative leaders for helping make sure that we do this right.”

The delay of IM 26 was approved by Republican lawmakers including House Majority Leader Kent Peterson, who argued that more time was needed to devise a workable plan to implement the measure.

“There is no doubt that IM 26 passed in South Dakota, and it is fully our intention to honor the will of the voters,” said Peterson in the statement from Noem’s office. “Based upon the experiences of other states, we know that it takes time to start implementing a safe and workable program. We will get the job done.”

Lawmakers who support repealing home cannabis cultivation fear that marijuana grown by patients will be diverted to the illicit market. Representative Fred Deutsch, another Republican, also cited the possibility that home grows could be a target of thieves.

“It’s the relationship between home grow and the black market,” he said, citing testimony heard during the committee’s information gathering process. “Home grow is probably the key ingredient with the proliferation of crime and the proliferation of the black market.”

Other lawmakers noted that at least a dozen states with legal medical marijuana do not allow patients to grow their own medicine. Republican state Rep. Rhonda Milstead said that regulatory officials in Colorado recommended home cultivation not be allowed.

“Why are we not listening to the experience?” Milstead asked.

Not all lawmakers on the subgroup, however, are in favor of the changes proposed by the panel. Representative Taylor Rehfeldt, also a Republican, said that she can not support amendments that reduce patient access or fail to comply with the intent of voters. However, she supports allowing cities and counties to prohibit hosting cannabis businesses.

“I’ll always try to maintain the intent of IM 26 while considering the needs of Sioux Falls and the entire state,” Rehfledt said. “I voted for local control, partly because I know there are rural communities who did not pass medical marijuana with a majority and I’m trying to consider their needs.”

Republican Senator Mike Rohl was opposed to delaying the implementation of IM 26. He does not believe that attempts by lawmakers to ban home cultivation or allow local governments to prohibit marijuana companies will succeed.

“I don’t think they have the votes to get anything like that done in the long run,” Rohl said.

Adult-Use Measure Also Under Attack

Noem is also involved in an effort to overturn the voters’ approval of Amendment A, a proposed amendment to the South Dakota Constitution that would legalize and regulate recreational marijuana for adults. A lawsuit supported by the governor has been filed against the measure, which was approved by 54 percent of voters in the 2020 general election. In April, a South Dakota circuit court judge ruled that the measure is unconstitutional and nullified the amendment.

The case was then appealed to South Dakota’s Supreme Court, which heard arguments from both sides of the litigation in April. Representative Hugh Bartels, the Republican lawmaker who chairs a subcommittee studying adult-use cannabis legislation, said that the court is still deciding whether Measure A violates the state constitution.

“How long that’s going to take we don’t know. We just have to wait,” Bartels said about the Supreme Court case. “We’re kind of treading water until then.”

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How Native Tribal Cannabis Can Beat States To Legalization

South Dakota is a small place, and the town of Flandreau is even smaller. About 2,400 people located 40 minutes’ drive away from Sioux Falls, the state’s largest city and de-facto cultural capital, Flandreau is the largest settlement on the Flandreau Santee Sioux Reservation — which at 2,356 acres of gently rolling plains near the Minnesota border, is the smallest Native tribal reservation in the state. But on the morning of July 1 — the day of the grand opening of the Native Nations Cannabis Dispensary, the first legal medical cannabis dispensary in the state as well as South Dakota’s first Native tribal cannabis business — Flandreau was possibly the most famousplacein the state. And as an example of what cannabis can do for Native tribes, Flandreau might have been the most important reservation in the country.  

Through the grand opening over the July 4 weekend, the tribe registered about 1,000 patients, according to Seth Pearman, the tribe’s attorney general, all of whom were then free to shop at the dispensary. (More importantly: There was no repeat of 2015, when threats from law enforcement thwarted the tribe’s first crack at the cannabis business). 

Elsewhere on the reservation, about 10,000 well-tended cannabis plants oozed terpenes in tribal grow houses, waiting for when harvest can net the tribe as much as $1 million a month — or maybe more, if the tribe also becomes the first adult-use cannabis dispensary within driving distance of Sioux Falls, as well asmuch larger cities like Minneapolis, about three and a half hours away.

With Native Nations Cannabis, the Flandreau Santee Sioux were not the first tribe to enter the marijuana industry. Native tribal cannabis businesses are in operation in California and Nevada, and with marijuana legalization sweeping the East Coast and the South as well as the West, tribes in places like Long Island, New York are also pursuing commercial cannabis. 

But in a reversal of the federal model that thwarts other cannabis companies from becoming nationwide powerhouses, the Flandreau Santee Sioux are demonstrating how tribes can use U.S. federal law to create unprecedented economic opportunity for indigenous Americans — and skip the headaches that are thwarting other legacy operators in states shut out from legal cannabis. If all goes well, the Flandreau Santee will provide a model for Native tribal cannabis in other states to follow — and be the first in their states to seize a foothold in the billion-dollar U.S. marijuana industry. And as Congress inches closer towards presenting a federal legalization plan to President Joe Biden, cannabis may prove itself more valuable than tribal casinos — maybe, even, the best economic opportunity for indigenous Americans, ever.

“I think [federal legalization] will include the tribes,” predicted Pearman, who envisioned a future where Native tribal cannabis is available in every state, on and off of reservations — and at a price that can break the market. 

First Nations First, Finally 

South Dakota became the first state in the U.S. to legalize medical and adult-use cannabis at the same time in November. Voters approved both Measure 26, which legalized medical marijuana, as well as Constitutional Amendment A, which ended criminal penalties for limited amounts of cannabis for all adults, by comfortable margins. (The Flandreau Santee Sioux were invested in the outcome: The tribe donated $100,000 in favor of legalization, campaign contribution records show.) Shortly thereafter, South Dakota also became the first state to have its elected and law-enforcement officials stage a revolt to overturn the voters will and maintain deeply unpopular drug prohibition. 

With Republican Gov. Kristi Noem’s political support (and with taxpayer-funded legal resources from the state), leading police officials sued to cancel Measure A. A lower court agreed and declared the measure unconstitutional; an appeal to the state Supreme Court is still pending. 

Meanwhile, though the state’s medical-marijuana law went into effect on July 1, state health officials have said that medical cannabis recommendations won’t be issued until the fall. And dispensaries where patients could legally access cannabis might not open until next summer.

But what happens in Sioux Falls doesn’t matter too much in Flandreau, which is governed by a 1934 federal law that declares reservations “sovereign nations” — with their own laws, police forces and courts. 

All 574 federally recognized tribes enjoy the same sovereign rights — but as the Flandreau Santee found in 2015, there can be exceptions.

False Start

That year, the Flandreau Santee Sioux tribal council voted 5 to 1 to legalize marijuana on the reservation. Work began converting a 10,000-square foot building near the tribal casino into what was believed to be the “first marijuana resort in Indian Country and the United States”— ahead of South Dakota, and well ahead of the federal government. 

“Aside from making money, this is about sovereignty,” Kenny Weston, a council member, said at the time. “We have sovereignty, and we have to assert it. The goal for many tribes is to become self-sustaining. Revenue from the marijuana venture will help us to get closer to this.” 

The tribe believed it was within its rights. On top of tribal sovereignty, the Flandreau Santee Sioux also had a 2014 letter from the federal Department of Justice. In what’s known as the Wilkinson memo — similar in language and scope to the Cole memo, which says state-legal cannabis businesses aren’t priorities for federal law enforcement — the DOJ said that legal cannabis operations on native reservations shouldn’t attract trouble from federal law enforcement. Since the dispensary would be legal under tribal law, so would the Flandreau Santee Sioux’s Native cannabis business.

Or not. Tribal leaders were summoned to Washington, D.C., where Justice Department officials said sales of cannabis to non-Native people — and the Flandreau Santee’s source of seeds —would pose problems. Fearing a raid, the tribe decided to cancel its plans. The tribe burned its entire cannabis supply in November 2015. 

However, everything else — like the grow facilities — were simply mothballed, deactivated but carefully preserved for when the winds changed again. As soon as cannabis could be considered legal off of the reservation in South Dakota, the Flandreau Santee Sioux would return to the Native tribal cannabis industry.

The Best Cannabis Equity

And that’s why Native Cannabis opened on July 1. South Dakota law enforcement must respect medical-cannabis patients throughout the state. Anyone with a qualifying condition can pay $50 to get a card at Native Cannabis, which also recognizes medical-marijuana recommendations from any other state. And as soon as Measure A wins its court challenge and adult-use cannabis is legal, the Flandreau Santee Sioux’s tribal cannabis industry will welcome all adults 21 and over, Pearman said.

In this way, Native tribal cannabis is also demonstrating what may be the best model of equity for the rest of the country. Sold as a make-good for the demonstrably racist drug war, marijuana legalization hasn’t uplifted the non-white communities hurt hardest by overpolicing and incarceration, since these same communities have the least access to capital. 

But tribes own and operate their own real-estate and run their own regulations. They don’t need to beg for expensive startup capital just to pay a licensing fee. In other words, they’re set up to start making money from legalization almost immediately — a huge advantage for rural tribes for whom casinos are not an option, who can be free from a “white male monopoly back there pulling strings,” said Joseph Dice, co-founder of Tribal Cannabis Consulting, who works with tribes in California and Nevada.

“When you get a small tribe that has nothing, and you build this infrastructure, it opens up a lot of doors,” said Dice, who offered the example of the Lovelock Pauite tribe in Nevada. A poor tribe with just over 600 members with 20 acres of reservation left, the tribe opened a dispensary — and “within a year people had jobs,” he said. 

“It’s about sustainability and self-determination,” he added. “You’re no longer relying on the federal government.”

The post How Native Tribal Cannabis Can Beat States To Legalization appeared first on Cannabis Now.

Thursday March 11, 2021 Headlines | Marijuana Today Daily News

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Thursday, March 11, 2021 | Curated by host Shea Gunther

// Mexico’s Chamber Of Deputies Approves Revised Marijuana Legalization Bill (Marijuana Moment)

// Noem’s medical marijuana plan scuttled by Senate (Sioux City Journal)

// Mississippi House Kills Alternate Medical Marijuana Proposal But Senate Makes Late Attempt To Revive It (Marijuana Moment)

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// Garland’s confirmation as AG could change Feds’ marijuana views (Marijuana Business Daily)

// Aurora Cannabis Still Wants More Money Files To Offer $1 Billion In Securities (Green Market Report)

// Acreage Holdings Reports $286 Million Net Loss in 2020 (Green Market Report)

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// Detroit overwhelmed by applicants for recreational marijuana shop licenses (Detroit News)

// As Green Thumb opens its first California cannabis store CEO says ‘This is a long-term game’ (CNBC)

// Tennessee Republican wants to permanently block recreational marijuana through state constitution (Tennessean)

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Tuesday March 9, 2021 Headlines | Marijuana Today Daily News

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Tuesday, March 9, 2021 | Curated by host Shea Gunther

// Mexico’s landmark cannabis bill one step closer to becoming law (Reuters)

// D.C. Can Take Steps Toward Legalizing Marijuana Sales Amid Congressional Ban Feds Conclude (Marijuana Moment)

// MindMed Finds One Investor For C$19 Million Offering (Green Market Report)

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// One-third of Canadian cannabis users consumed more during pandemic (Marijuana Business Daily)

// Marijuana Legalization Bill Has ’60-40′ Odds Of Passing Connecticut Governor Says Adding He’s Open To Homegrow (Marijuana Moment)

// Hawaii Governor Has ‘Concerns’ About Legalization Bill Advancing In Legislature (Marijuana Moment)

// Colorado Bill Would Require Schools To Store Cannabis-Based Medicines For Student Use (Marijuana Moment (Colorado Newsline))

// Pot advocates cry foul on Noem using state funds for lawsuit (Associated Press)

// Biden’s USDA Secretary Gives Final Approval To Hemp Rules Despite Ongoing Industry Concerns (Marijuana Moment)

// Scutari Sweeney working on marijuana home grow bill (New Jersey Globe)

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