Last week more than 54 percent of South Dakota voters said yes to legalizing recreational marijuana in the state. Those results quickly started a flood of people interested in getting into the early stages of the industry in South Dakota.
“We have passed a law and now people think that it’s just time to open business,” Melissa Mentele, the Executive Director of New Approach South Dakota said.
Mentele has been working to bring marijuana to the state for six years.
“They called our race at about 9:30 p.m. and about 9:45 p.m. people started calling,” Mentele said.
She says calls from prospective business owners started coming in on the night of the election; since then, city and state government agencies have heard from others interested in getting started in the industry.
“Slow down is probably the best advice I can give anybody. I know it’s really exciting and people want to just jump in with both feet, but there’s nothing to jump into yet,” Mentele said.
Mentele says even though voters approved these constitutional amendments, there are still many legal steps that have to happen before anyone can start a business.
“We have no idea what the state regulations are going to be, how the state is going to do licensing, we haven’t even seen a provisional license or application yet,” Mentele said.
“As brand-new laws go in place, there’s definitely a lot of chaos and of course everyone rushing in to try to get part of the market,” Jane West, the CEO of her Colorado-based cannabis company said.
Jane West started her own cannabis company just a few months before Colorado legalized in 2013.
“One of the things I love most about South Dakota is that it’s very similar to Colorado where now there are thousands of business owners and ancillary businesses that are thriving and that’s what I see as a future for South Dakota,” West said.
West says South Dakota’s marijuana amendment was written in a way that gives more opportunity to small businesses and will help prevent the monopolies that are happening in some other states.
“There’s definitely a reason to be excited in South Dakota about cannabis because the law that was passed is one of the most accessible laws nationwide, it’s very egalitarian,” West said. “Small business owners in South Dakota will truly have an opportunity to participate in this booming market. In other places around the country, the markets are so limited that they’re basically monopolies and you can’t really play unless you have a lot of capital around you.”
She says this early in the process though, the best thing prospective business owners can do is to study successful businesses in other states.
“I would look outside of South Dakota to see what you want to do with your brand and then figure out how to make it work with the regulations as they come out,” West said.
But she and Mentele say it’s also important to be wary of outside companies looking to take advantage of this new industry in South Dakota.
“You’ll find that in this initial boom, there’s more people trying to make money off of people trying to get into the cannabis money than there are people making money on cannabis and you have to be careful,” West said. “This early on it’s probably too soon to be spending money on consultants or capital.”
“We have people that are telling us, well we’ve signed a lease and we’ve done this and we’ve done that, how do you know that where you’ve signed a lease with and where you’re putting money into is even going to allow you to operate. That’s a big thing,” Mentele said.
Mentele wants people to focus on the next legal steps ahead.
“If you voted for this and this is something you’re passionate about and you want to move forward with, you need to be in communication with your state legislators,” Mentele said.
New Approach South Dakota and South Dakotans for Better Marijuana Laws will be hosting an informational meeting for anyone interested in starting their own business or getting involved in the future of marijuana in the state. Anyone interested can sign up at 605 Cannabis for details.