STURGIS — The Meade County Commission has passed first reading of a temporary ordinance concerning the issuance of licenses for medical marijuana establishments.
Voters approved Initiated Measure 26 last November which legalized medical marijuana in South Dakota. Based on South Dakota codified law, the Department of Health has until no later than Oct. 29 to open up an application process for both medical marijuana cards and licenses for both commercial growers and sellers of medical cannabis.
But that leaves local governments with no direction from state standards from July 1 to the end of October.
Meade County Deputy States Attorney Ken Chleborad told the county commissioners at a special meeting Tuesday that the county’s current regulations and controls may not adequately address the unique needs and impacts of medical marijuana establishments. Therefore, something needs to be in place by July 1 to address those concerns.
The temporary ordinance would be a moratorium on accepting and approving any applications for local licenses. The temporary form was generated because at this time the county doesn’t know the rules that the South Dakota Department of Health is going to make, Chleborad said.
“This just pushes down the road any local regulations until we see what the Department of Health is going to do,” he said.
The ordinance reads:
A. Applications for a local license to operate a medical cannabis establishment, as defined by SDCL 34-20G-1, shall not be accepted until the South Dakota Department of Health has promulgated regulations as required by SDCL 30-20G-72.
B. Any application received prior to such regulations being promulgated shall be denied.
Also included in the temporary ordinance was a section addressing the number and cost of licenses that would be allowed.
“If we don’t have a number of licenses established before the Department of Health starts taking applications, there is no limit,” Chleborad said. “Our opportunity to control how many licenses and in which classifications we want to have should be in place before July 1.”
The county will oversee licensing for cultivation facilities, cannabis testing facilities, cannabis product manufacturing facilities and dispensaries.
Anthony Rizzo from Ride and Rest Campground, who said he would like to apply for a cannabis cultivation license, told commissioners he was concerned that too few licenses could drive up the price.
“Liquor licenses go for quite a hefty price here in this county. That’s something that I’m hoping does not get mirrored in the medical cannabis industry considering that it is a medical need for people,” he said.
He also worries that too few licenses would stifle competition in the cannabis industry.
“I really hope you would take into consideration not allowing a monopoly on this, but having small business opportunities for people that will create a dynamic community within the county and the cannabis community,” he said.
Timothy Hughes, who lives at Summerset, said he hoped to open a cannabis dispensary.
“Hopefully this is going to be a market that even a little guy can get into. I don’t have a lot of money. This is a dream I have. I want to be able to help people,” he said.
Commissioners voted unanimously not only to pass first reading of the temporary ordinance, but also a full ordinance. Second reading of both ordinances will be 10 a.m. Tuesday, May 25.
Meanwhile, the city of Sturgis has set a public hearing for June 7 to discuss the potential recommendation and adoption of a temporary medical cannabis ordinance similar to what the county passed on Tuesday.
Sturgis Mayor Mark Carstensen said the city wants to put an ordinance in place to make sure that when the state gets all their plans put together there are not pre-existing businesses that will be grandfathered in.
Carstensen said the city has been working closely with the South Dakota Municipal League and their attorneys concerning a draft ordinance for the city.
“It will be put forward to basically fill the void between July 1 when the law goes into effect and when the state comes out with their regulations,” he said. “In order to have better control of the situation as a municipality, we’re putting this placeholder ordinance in place that has been worked with through the Municipal League. If we don’t do this, by what the state is saying, it leaves things pretty wide open.”
Sturgis City Manager Daniel Ainslie said the city will not authorize any dispensaries until the state actually issues their rules on medical marijuana.
“It would be a temporary ordinance (which would go into effect before July 1, that would prohibit the granting of any licenses until the state comes out with what their rules are,” Ainslie said.
Under statute, the city is not required to allow cultivation facilities, testing facilities, or manufacturing facilities for medical marijuana; however, the city must allow at least one dispensary if an interested party approaches the city to open one.
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