Licensing Opportunities in South Dakota's Medical Cannabis Market
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One thing’s for sure: No one can claim that the march towards legal cannabis in South Dakota has been uneventful! In November of 2020, the state made history as the first to legalize both medical and adult-use cannabis in the same year. Then, in the first of several twists and turns, Governor Kristi Noem pushed back, instructing a state official to launch a legal challenge to South Dakota’s voter-approved, adult-use program.
While the outcome of that challenge is currently up in the air, the state is moving ahead on the medical-use front. This means that for South Dakota entrepreneurs who are interested in entering the state’s legal cannabis industry, it’s time to get familiar with the cannabis licensing requirements in South Dakota.
If you’re one of these entrepreneurs, we’d like to help. We’re Bridge West, a team of seasoned cannabis industry veterans with decades of combined experience and a proven, market-tested approach to cannabis business licensing. We offer our clients an unparalleled advantage in terms of start-up business planning, licensing and advisory services, and much, much more.
With that in mind, here’s an overview of where the state currently stands, the adult-use cannabis licensing requirements in South Dakota, and some of the ways Bridge West can help you make your dreams a reality.
Cannabis Licensing Requirements in South Dakota: The Landscape
On Election Day 2020, South Dakotans voted to approve adult-use cannabis by a margin of 54% to 46%. Shortly thereafter, Highway Patrol Superintendent Col. Kevin Miller—acting on Governor Noem’s direction—sued the state, claiming the voter-approved measure violated several tenets of state law.
Although a judge initially agreed, ruling that the measure was invalid, a subsequent countersuit claiming that Col. Miller lacked the legal authority to sue the state sent the case to the South Dakota Supreme Court. At present, there’s no word on when the court will issue a ruling; stay tuned on that front.
Incidentally, Governor Noem—who’s emerged as a notable anti-cannabis voice in national politics—also attempted to derail the South Dakota medical cannabis program, arguing that the state required more time to implement a regulatory framework. However, that effort proved unsuccessful. As of this writing, the state is currently formulating the South Dakota Medical cannabis licensing requirement rules, with the state slated to launch a patient registry program in November of 2021.
South Dakota Medical Cannabis Licensing Requirement: What We Know
While the exact cannabis licensing requirements in South Dakota are still a work in progress, the Department of Health has announced that it will issue details of the cannabis business licensing process on or before October 29, 2021. But because the State Legislature is tasked with providing a legal framework for retail medical sales by April 1, 2022, the clock is ticking.
What types of cannabis business licenses will be available? At present, South Dakota’s medical cannabis bill, SDCL 34-20G, establishes the following cannabis business types:
- Cultivator / Manufacturer: These licenses permit commercial cannabis cultivators to cultivate, process, transport, and sell cannabis to wholesalers. In addition, license-holders may manufacture commercial cannabis products such as cannabis concentrates, edibles, and other items. They may also transport and sell such products to wholesalers.
- Dispensary: This license permits retail sales outlets to sell and deliver cannabis to legally qualified consumers.
- Testing facility: This license permits independent testing facilities to analyze and certify the safety and potency of cannabis and cannabis products.
- Distributors / Transports: This license permits holders and wholesalers to package, process, and prepare cannabis for transport and sale to licensed retail sales outlets.
The above cannabis businesses are referred to collectively as “establishments.” And while the Department of Health has not yet announced the number of South Dakota cannabis business licenses it will issue, the department will take into account such factors and considerations as:
- Ensuring that the number of licensed cannabis businesses will substantially reduce the illicit cultivation, production, and sale of unlicensed cannabis products in South Dakota.
- Ensuring that the number of cannabis business licenses issued will prevent a concentration of businesses in a single municipality or area of South Dakota.
Furthermore, local municipalities will have the option to enact ordinances that restrict the times, places, and manners of licensed cannabis businesses, as well as the number of licensees operating within its jurisdiction. This may include the banning of cannabis sales altogether.
Cannabis Licensing Requirements in South Dakota: A Plan of Action
As we noted above, the specific cannabis licensing requirements in South Dakota are as-yet unpublished. That said, based on our deep well of experience helping our clients craft compelling—and ultimately successful—cannabis business applications, we urge those interested in entering the South Dakota medical cannabis market to familiarize themselves with the basic principles of cannabis business licensing:
Business Plan: In most states, submitting a business plan is a requirement for every type of cannabis license application. But over-and-above this requirement is the simple fact that a cannabis business plan is a vital roadmap for you and your team. Submitting a well-crafted and prudent business plan is your best opportunity to demonstrate your organizational and entrepreneurial knowledge and your grasp of the commercial and regulatory playing field. It’s also your primary chance to explain to all relevant parties the ways in which your business will positively impact the community you serve. And if you’re attempting to attract investors, partners, and other key players, having a compelling and clear-eyed plan will give you a major leg up on the competition.
Operations Plan: If you might describe your business plan as a strategic overview, your operations plan is more akin to a tactical roadmap. It’s the document you’ll use to spell out all the details relating to the safety, compliance, and day-to-day operations of your business establishment. You can think of it as an “operator’s manual” for running a successful, compliant, and profitable cannabis business.
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CONTACT HIGHER YIELDS CONSULTANTS
Higher Yields Consultants has decades of experience in the ever-changing, multifaceted cannabis industry. Whether you are an established business-owner or an entrepreneur eager to dive into the industry, we can help you navigate the ins-and-outs of marijuana licensing and production regulations. Fill out a contact form or call us at (844) HI-YIELD to schedule your free consultation.
Cannabis Licensing Requirements in South Dakota: Wrapping Up
If you’re serious about entering the South Dakota cannabis industry, we’d like to help you. As a partnership made up of highly-skilled and seasoned cannabis industry consultants and guides, Bridge West is ready to help new and emerging cannabis companies find financial and banking solutions, connect with potential stakeholders, and chart a course for success in this exciting new landscape. Feel free to reach out to schedule a consultation any time.