PIERRE, S.D. (KELO) — South Dakota’s city governments should be allowed to own medical-marijuana dispensaries if their elected commissions and councils choose, similar to package liquor stores, the executive director for the South Dakota Municipal League told a panel of state legislators Monday.

“We have cities that would like to do it. We have cities that have no interest in doing it,” Yvonne Taylor testified at a meeting of the Legislature’s medical-marijuana subcommittee.

Taylor said cities are also interested in gaining the legal right to lease medical-marijuana outlets to private operators.

She doesn’t expect municipal governments will want to charge any additional fees on medical marijuana for several reasons.

“The market is going to drive the medical, and I think there’s going to be very little demand in our smaller towns,” Taylor said.

She added, “We are aware that you need to watch out with the taxation, that you don’t drive this back to a black market thing. And so, I think cities would be pretty cautious in adopting additional taxes. On medical, I would be surprised if we saw more than an application fee, just because of the nature of the medical. And it will be captured under the municipal sales tax.”

Nearly 70% of South Dakota voters last November supported IM 26 legalizing medical marijuana, despite public opposition from Governor Kristi Noem. The new law takes effect July 1 and calls for the state Department of Health to have rules in place by October 29.

The Legislature’s Rules Review Committee recently sent back rules the state Department of Education proposed for administering medical marijuana in K-12 schools.

The governor’s office launched the new state website last week and announced Monday there will be two telephone ‘town hall’ meetings June 28.

Another group called Monday for a change in the new law. The South Dakota Association of Healthcare Organizations wants legislators to repeal a requirement that a practitioner must certify “a patient is likely to receive therapeutic or palliative benefit from the medical use of cannabis to treat or alleviate the patient’s serious or debilitating medical condition or symptoms associated with the serious or debilitating medical condition.”

The federal government continues to list marijuana as a controlled substance, although about three dozen states have legalized it in some form.

SDAHO fiscal policy director Sarah Aker told the committee North Dakota had a similar palliative/therapeutic requirement in the law its voters passed in 2016 but North Dakota lawmakers later removed it.

“In our conversations with our members that operate in North Dakota, they had a lot of what I would say concern from physicians that worked for them about certifying that would be a palliative benefit. That really prevented them from really signing up to be part of the program, and when this was removed, that really alleviated a lot of those concerns that physicians had,” Aker said.

The South Dakota Supreme Court meanwhile hasn’t decided the fate of Amendment A legalizing marijuana for people age 21 and older. About 54% of South Dakota voters supported its passage in November. Governor Noem challenged its legality afterward, saying the constitutional amendment violated the single-subject rule and should have gone to a statewide constitutional convention before getting on the statewide ballot.