Where will South Dakota’s marijuana come from?

KELOLAND.com Original

SIOUX FALLS, S.D. (KELO) — The Flandreau Santee Sioux Tribe’s Native Nations Cannabis medical marijuana dispensary has been operating in Flandreau since July. While it’s currently the only operating dispensary in the state, that is set to change.

The City of Sioux Falls carried out their dispensary license lottery on Wednesday, selecting five applicants. Provided all goes to plan, these will be the operators of Sioux Falls’ only dispensaries. But where will they get their product, and when?

Ned Horsted, Executive Director of the Cannabis Industry Association of South Dakota says that marijuana will be supplied by state licensed cannabis cultivation facilities. “These are going to be located in different cities and counties across the state,” he said.

But not in every city and county.

“Sioux Falls has banned cultivation and product development facilities,” said Horsted “so [product] will likely come from other counties.”

Two such counties are Yankton and Lincoln counties, the latter of which Horsted says has a ‘free-market’ ordinance in place, meaning there is no cap on applications for cultivation facilities.

“It’s really up to each individual city or county government to decide which of these licenses they’re going to allow,” said Horsted.

As mentioned above, the only functioning dispensary in the state in operated by the Flandreau Santee Sioux Tribe, and barring some serious legislative maneuvering or a change to federal law, that’s the way it will stay for the next several months.

On Thursday, the South Dakota Medical Cannabis Program announced “the first medical cannabis patient cards were printed and issued.” 

At this time, no cultivation licenses have been granted by the state, according to Horsted. “The clock would start November 1st on that,” he said, referring to the opening date for applications. Horsted says that after the application is submitted, the state has a 90-day window to review.

This means the best case scenario for a facility to be licensed is around January 30, 2022.

Under state law, properly licensed businesses will be able to transport cannabis products across the state, but that also won’t likely be happening in January.

Horsted says the average growth period for cannabis is around 120-130 days for the quicker growing strains, while for some that process can take much longer.

“Part of the question here is how many businesses decided to go forward and invest significant amounts of money before they even got a license,” noted Horsted. “For a lot of South Dakota businesses, what this means is they would start building or retro-fitting for a cultivation facility as soon as they got licensed.”

With the practical outlook of 90 days to get a license, a period for construction and then the plant growth period on top of it all, the likelihood is that the earliest dispensaries outside tribal land could be operational is mid to late 2022.

Horsted says that as of now, the state is not allowing product to be transferred between tribal and state programs, meaning a dispensary could not get their cannabis from Native Nations, for instance. Getting it from another state, he says, also won’t work. “Since it is still banned federally, you cannot cross state lines without breaking the law.”

In terms of what cultivation will look like in South Dakota, Horsted says both indoor and outdoor growing will be allowed in the state, but indoor may wind up being the more common route taken.

“Just due to the climate I do think most of the cultivation licenses that you see will be for indoor facilities,” he said. “Usually you want a very controlled environment to grow the product.”

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