Medical and adult-use marijuana is legal in South Dakota. There were two competing initiatives that appeared on the Nov 2020 ballot; Initiated Measure 26 is on the ballot to legalize medical marijuana, and Constitutional Amendment A is on the ballot to legalize recreational marijuana. Both passed on November 3rd, 2020. Learn more about how to get a South Dakota marijuana business license or schedule a complimentary consultation with our licensing expert, below.
When to Apply
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NUMBER OF SOUTH DAKOTA MARIJUANA BUSINESS LICENSES AVAILABLE
South Dakota Medical Marijuana Business License: Under Initiated Measure 26, local governments (cities, townships, counties, etc.) will be allowed to regulate the number and types of licenses allowed to operate within their jurisdiction. Types of licenses allowed include the following:
Cultivation facility: An entity registered with the department that acquires, possesses, cultivates, delivers, transfers, transports, supplies, or sells cannabis and related supplies to medical cannabis establishments.
Cannabis product manufacturing facility: An entity registered with the department that acquires, possesses, manufactures, delivers, transfers, transports, supplies, or sells cannabis products to a medical cannabis dispensary.
Medical Cannabis Dispensary: An entity registered with the department that acquires, possesses, stores, delivers, transfers, transports, sells, supplies, or dispense cannabis, cannabis products, paraphernalia, or related supplies and educational materials to cardholders.
South Dakota Recreational Marijuana Business License: The Department of Revenue (department) shall regulate and license businesses for the cultivation, manufacture, testing, transport, delivery, and sale of marijuana in the state. The department shall accept applications for and issue the following types of licenses:
- Cultivator/Manufacturer: Licenses permitting commercial cultivators and manufacturers of marijuana to cultivate, process, manufacture, transport, and sell marijuana to marijuana wholesalers
- Testing: Licenses permitting independent marijuana testing facilities to analyze and certify the safety and potency of marijuana
- Distributors/Transport: Licenses permitting marijuana wholesalers to package, process and prepare marijuana for transport and sale to retail sales outlets
- Retail: Licenses permitting retail sales outlets to sell and deliver marijuana to consumers
The department shall take the following into consideration when determining the appropriate number of licenses to issue:
- Issue enough licenses to substantially reduce the illicit production and sale of marijuana throughout the state; and
- Limit the number of licenses issued, if necessary, to prevent an undue concentration of licenses in any one municipality.
Local government may enact ordinances or regulations governing the time, place, manner and number of licenses operating within its jurisdiction – this includes banning the marijuana operations altogether.
HOW TO START A MARIJUANA BUSINESS IN SOUTH DAKOTA
We encourage those interested in starting a marijuana business, to focus on establishing your Business and Financial plans.
Schedule for a complimentary 15-min consult with our licensing/application expert to learn more about how we may be able to assist you.
ENHANCED OVERVIEW OF MARIJUANA IN SOUTH DAKOTA
South Dakota has been trying to legalize medical marijuana since 2006, The South Dakota Medical Marijuana Initiative (Initiative 4) was on the Nov 2006 ballot, but was defeated by a narrow margin of 52-47. In 2010, efforts to legalize medical marijuana in the state were revived, now known as Initiative 13 – but was defeated again by a larger margin of 63-36. Another attempt in 2016 also failed to pass.
Initiated Measure 26 (IM-26), will establish a medical marijuana program for qualifying patients with debilitating medical conditions. Patients will be allowed to possess a maximum of three ounces of marijuana, plus additional marijuana products, and have the option to grow at least three plants at home. The program’s rules will be established and enforced by the South Dakota Department of Health to include but not limited to the following:
- Qualifying conditions for medical marijuana patients include “cachexia or wasting syndrome; severe, debilitating pain; severe nausea; seizures; or severe and persistent muscle spasms, including those characteristics of multiple sclerosis.” The Department of Health may add to this list.
- Patient reciprocity: Non-residents may use out-of-state registration cards to purchase and possess medical marijuana in South Dakota.
- Does not prevent an employer from disciplining an employee for consuming or being under the influence of cannabis in the workplace.
- Creates a licensing structure for medical marijuana businesses that will be regulated by both the department and local government.
Constitutional Amendment A (CA-A), would legalize the recreational use, possession, and distribution (up to one ounce) of marijuana for individuals 21 years old and older. The amendment would require all revenue, not including implementation costs, to be split between the state’s general fund and the public education system. The amendment requires the state legislature to pass separate laws regarding the medical use of marijuana. Furthermore, it requires the state legislature to pass laws regulating the cultivation, processing, and sale of hemp. While the amendment allows for the establishment of marijuana businesses, it also allows for homegrown cannabis.
SOUTH DAKOTA MARIJUANA TIMELINE
November 7, 2006 – The first bill to allow medical marijuana, The South Dakota Medical Marijuana Initiative, was defeated by a narrow margin of 52-47.
November 2, 2010 – The same bill was revived under the same name, now known as Initiative 13, where it was defeated again by a larger margin of 63-36.
November 8, 2016 – An attempt to bring the same initiative to the ballot again failed.
February 19, 2019 – Governor Kristi Noem signed a bill into law with an emergency clause that made the prescription drug Epidiolex, a CBD oil, legal for qualified patients.
December 19, 2019 – A measure to legalize medical marijuana was approved and will now be placed on the 2020 ballot.
January 6, 2020 – A measure to legalize marijuana for adult use has qualified for the November 2020 ballot.
November 2020 – South Dakota passed medical marijuana (Initiated Measure 26) and recreational marijuana (Constitutional Amendment A)
"Cannabis Business Advisors is a world-class company. Their tactical and strategic knowledge will guide any business to success. CB Advisors' advice and counsel played a key role in making Strive Life the only locally awarded dispensary in North Dakota."Dispensary Owner, Strive Life Grand Forks
"SARA’S SUCCESS SPEAKS FOR ITSELF. OUR COMPANY CONTINUES TO ENGAGE SARA FOR ONGOING CONSULTING AND HER ADVICE REMAINS SOLID AND RELEVANT TO OUR GROWTH."Owner, Firefly Dispensaries in Pennsylvania.
"WORKING WITH SARA WAS A PLEASURE. WE DON’T KNOW HOW WE WOULD HAVE GOTTEN THROUGH THE APPLICATION PROCESS WITHOUT HER."Arizona Vertically Integrated Facility Owner
"Sara reduced much of the management team’s stress by her knowledge, execution, resolving conflicts, and firm but confident approach."Chairman, Solevo Wellness
"Sara’s success speaks for itself. Our company continues to engage Sara for ongoing consulting and her advice remains solid and relevant to our growth."Owner, Firefly Dispensaries in Pennsylvania.
"Working with Sara was a pleasure. We don’t know how we would have gotten through the application process without her."Arizona Vertically Integrated Facility Owner