SIOUX FALLS, S.D. (KELO) — While medical marijuana was legalized by South Dakota voters in the November 2020 election, taking effect in July 2021, the state would not issue its first medical cards until November 2021, and a state-certified dispensary would not open until July 2022.
Considering much of 2021 was devoted to development and construction of the infrastructure needed to support the industry, such as gaining licensure and building physical structures, 2022 wound up being a very important year for the industry.
KELOLAND News discussed this past year with Ben Nesselhuf, co-owner of North Sioux City’s True North Dispensary and a member of the Cannabis Industry Association of South Dakota (CIASD).
“I think that the major change has been that you now have dispensaries, cultivators, manufacturers that have opened up all over the state,” said Nesselhuf, describing the way the industry changed over the course of 2021. “Now we’re open for business.”
While the number of open establishments in the state remains low, there are nearly 100 dispensary licenses that have been approved by the state, in addition to more than 50 manufacturing and cultivation licenses.
“There’s fewer of them,” Nesselhuf said, discussing cultivators, “but I know that they’ve been up and running a while now — enough to have product.”
Product, of course, is key.
“That’s the reason that even though we had a license in April, we couldn’t open until a few weeks ago — we needed product to sell,” said Nesselhuf.
While supplies of product have been short while the state’s first cultivators worked to grow and complete their first harvests, the industry has come together with businesses who will soon be direct competitors lending one another a helping hand.
“I think that’s the great thing about having an organization like the CIASD,” said Nesselhuf. “It does provide an avenue to work together — just a natural outgrowth of doing that is you get along — you are rooting for each other to be successful because this industry is so new that any success is going to breed more success.”
Along with working towards cooperation within the industry, Nesselhuf says that 2022 was also a time to try and ‘de-mystify’ dispensaries.
“We had open houses — we’ve had the entire North Sioux City Council, City Manager, the Police Chief all come through,” Nesselhuf said. “We try to give as many tours as we can — a big part of what we’re trying to do is just educate folk about what a dispensary is.”
Nesselhuf indicated that this education was still an uphill battle after what he describes as a century of reefer madness.
“People I think still think that we’re in a back alley somewhere, and the fact is we have a very nice, clean, beautiful sales floor,” he said.
In 2022, a potential leap into the recreational market was shot down by voters by a narrow margin in the election. Despite this, the medical side of the industry is continuing to grow.
“We did not go into this blind,” said Nesselhuf, drawing from research from a law firm out of Colorado. “In a thriving medical-only market, what you need is about 3.74% of citizens to have medical cards,” he explained.
As of the end of 2022, that number sat at less than 1% of South Dakotans, but Nesselhuf points out that over the last 8 weeks of the year, the medical market has been growing at a rate of nearly 6% each week.
“At that rate, by the next election we should hit that goal,” Nesselhuf said.
Looking to the future, Nesselhuf says that without a large amount of overt support in the state legislature, the immediate focus will be on not losing ground through the upcoming legislative session.
“I think the people [of South Dakota] seem to be very supportive,” Nesselhuf said when asked if South Dakota is cannabis friendly state. “I would like to see the state government be equally as supportive as the voters were.”
“I think it’s important for people to understand that everybody in this industry’s attempting to be a benefit to their community in a responsible way,” said Nesselhuf. “We just need a little help from the state once in a while to allow us to do business.”