Spearfish cleans up pot licensing

Courtesy photo

SPEARFISH — As the South Dakota Department of Health (DOH) and state legislators work to set the rules for medical cannabis use statewide, local counties and cities are zeroing in on their own ordinances to govern the drug’s application and use.

Earlier this summer, the Spearfish City Council passed Ordinance 1346, which set several licensing standards for cannabis establishments located within city limits.

“The regulations specify what someone with a license can do and then what they can’t do and if they do one of the things they can’t do there’s a process for suspending the license, revoking the license and then the entity can appeal those determinations,” explained Ashley McDonald, Spearfish city attorney during that ordinance’s first reading in June.

Since then, city officials have identified a few areas within the ordinance that needed to be revised to fit the directions coming form the state.

“We had drafted these ordinances without reference to medical cannabis so we would have some structure of regulation to step into if the Supreme Court issued its ruling on recreational marijuana prior to the DOH rules’ adoption,” read a statement from the city attorney’s office.

The city has amended its licensing ordinance guidelines to specifically deal only with medical marijuana establishments while the state Supreme Court and legislature mull over the options for legalizing recreational use. Additionally to narrowing the scope of the laws, the city has also made changes regarding the actual issuance of the licenses themselves.

“Minor changes,” McDonald said. “Some of them include changing the expiration date of the license from one year from the date of issuance to being a set date for each of the licenses regardless of when the first one was issued. …We added a license fee, we previously only had an application fee, that was an oversight in drafting the original ordinance.”

According to the revised ordinance, all licenses will expire on Dec. 31, of the year of issuance, a step taken to make keeping track of those expirations easier for the finance office. All renewal applications and fees will need to be turned in no later than 30 days prior to that date. The original ordinance issued an application fee of $5,000, but due to the uncertainty about the success of medical marijuana programs locally and in the state, the city will reserve setting those application and licensing fees until there is a clearer picture of those programs. Additionally, those fees will be set through resolution rather than ordinance. Resolutions can be enacted immediately by order of council as opposed to ordinances, which require multiple readings and publication in the official newspaper of record before taking affect.

“That becomes very cumbersome for us to have to change those,” McDonald explained.

The city is still limiting the number of permissible licenses of any cannabis cultivation, manufacturing, or testing facilities to two, with one license available for a dispensary. In anticipation of having more applicants than licenses available, the new ordinance lays out how the city will decide who gets the license.

“So what we’ll do is we’ll set a deadline for applying for a license and then we’ll check those application, make sure they conform with our ordinances and DOH rules and requirements,” McDonald said. “And then all the ones that do will go into a lottery and at a public meeting, and council meeting we’ll choose which ones will get a license.”

The ordinance will have its second reading at the next regular Spearfish City Council meeting scheduled for Oct. 4.

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