SIOUX FALLS, S.D. (KELO) — It has been just over a year since medical marijuana was officially legalized in South Dakota, but as of July 5, a state licensed dispensary has yet to open its doors to patients.
However, opening days for facilities are rapidly approaching, some angling to open within a matter of weeks.
There are currently 72 dispensaries, 10 manufacturers, and 26 cultivators licensed by the state.
Emmett Reistroffer is the COO of Genesis Farms, LLC, which holds six dispensary licenses, one manufacturing license and one cultivation license.
Holding licenses in all three categories allows Genesis to practice what is called vertical integration.
“In my experience, vertical integration has always been the best business model, because it allows us to control our own supply, which also better allows up to provide medicine at affordable prices,” explained Reistroffer.
This is also the business model followed by many other cannabis companies, including Native Nations, which is operated by the Flandreau Santee Sioux Tribe and has been serving patients since July 2021.
Reistroffer says that Genesis hopes to have their production campus, located in Box Elder, up and running by this fall.
Genesis does have a small grow operation underway at the facility currently, but is waiting on the completion of more than a dozen greenhouses to scale up to full production.
Reistroffer says that Genesis is the fastest moving project he’s been a part of in the cannabis industry. Indeed, it has been quick moving. Genesis got their licenses approved in March, and within 3 months now have plants growing.
One thing that Reistroffer (or any other cultivator, manufacturer or dispensary operator) can’t do is run a testing establishment.
This is due to state rules that require testing companies to be third party individuals.
“It’s the most important thing in the industry,” said Kittrick Jeffries, founder and CEO of Puffy’s, LLC. “Having a third party be the regulatory overseer — we need to know what the potency is; we need to know if it has harmful pesticides or microbials, mold and mildew and salmonella — we have to have that information.”
Currently there is only one licensed testing facility in the state, Cannabis Chem Lab, located in Flandreau.
CEO Matthew Jorgenson says that they are currently looking to expand into a permanent facility (they are currently housed within the Native Nations complex), and will also be planning to open a west river location in the near future.
Between their current and future facilities, Jorgenson told KELOLAND News that he is confident in the company’s ability to keep up with the demands of the state.
Though it may seem like a large task for a single company, it is well within the realm of possibility for one operation to meet the demands of the 10 manufacturers and 26 cultivation facilities currently licensed in the state.
For example, the state of Colorado currently has over 1,000 licensed dispensaries (medical and retail). These more than 1,000 facilities are served by just 12 testing labs.
While it must be considered that Colorado and South Dakota have different requirements for testing, and that total demand for testing is not yet known, it seems unlikely that a lack of testing labs will create a bottleneck within the industry.
In the event that demand did exceed the ability of the state’s commercial testing capability Medical Cannabis Program Administrator Geno Adams confirmed via phone call that the state could assist in providing services.
That need seems unlikely however, and in short order, many patients are likely to have greater access to medical cannabis, especially on the western side of the state. Jeffries, with a tone of caution, says he hopes to have the first Puffy’s Dispensary location in Rapid City open by August 1.
This opening date will depend primarily on one major factor.
“We won’t open without THC products,” said Kittrick. “It’s all dependent on the grower — we don’t know what the demand is gonna be; we don’t know what the supply is going to look like. It just takes a little bit of time for that baseline to hit.”
One thing most dispensaries will be looking to avoid is running out of product. Since many cultivators are still in the process of becoming fully operational, the supply of marijuana flower may not yet be consistent.
That consistency is not far off, however, and patients can hopefully expect a steady supply of medical marijuana by this fall.