What a summer and fall. When I was first thinking about running for office over three years ago, many former legislators told me that your winter months are always busy, but the rest of the year is very manageable. This year, however, between approving rules for the medical cannabis program, being on the legislative redistricting committee, mental health in first responders committee meetings, and now, a pending appointment to House Investigative Committee regarding Attorney General Jason Ravnsborg’s impeachment, there have been moments of this fall, in particular, where I have felt busier than at any time during the usual legislative session.

As a result, I have not always been able to provide timely updates of my representation, so over the next several weeks, I am going to do a series of op-eds focused on (1) the medical cannabis program; (2) redistricting; (3) impeachment of the attorney general; and (4) the upcoming legislative session.

I’ll start with medical cannabis. The voter-approved IM26 was one of the most comprehensive bills that has likely ever been considered by either the voters at the ballot box, or truthfully, by the legislators during regular session. But even so, IM 26 was very much about setting the framework of a state-authorized medical cannabis program. In IM 26, the S.D. Department of Health was responsible for the actual development of the program through the administrative rules process.

The Legislative Rules Review Committee must review and approve all department administrative rules. Our committee occasionally delves in more controversial or political topics, but most of the time, it is pretty run-of-the-mill legislating. For instance, you may have recently noticed that the speed limit increased from 30 mph to 45 mph on the bridge heading south to Nebraska; our committee approved that a few weeks ago.

Medical cannabis was a whole different ball game, and I quickly learned that medical cannabis is about more than just a few sick patients buying a few ounces of cannabis at a dispensary every now and then.

Cannabis is still illegal at the federal level, but in 2013, the U.S. Department of Justice, under the Obama administration, issued the “Cole Memorandum,” which gets its name from the attorney who wrote it. Lucky him. The Cole Memorandum is an outline of law enforcement priorities to guide federal prosecutors and law enforcement. It essentially says that cannabis grown and sold under a robust intra-state program will not be a priority of federal law enforcement. The Trump administration largely kept it and left cannabis alone in states where it is legal medically or recreationally. So far, President Joe Biden has, too.

The intra in the Cole Memorandum turns out to be important. Marijuana crossing state lines was still going to be a federal law enforcement priority. This is a part of the reason why it has taken so long for medical cannabis to get going in South Dakota. A dispensary cannot import it, so people have to grow it in-state before they can sell it. This means there needs to be a cultivation facility. For patients who do not want “flower” and prefer edibles or THC pills, manufacturing facilities have to be built too.

As a result, to meet the Cole Memorandum, the cannabis industry actually wants to be heavily regulated. And our committee approved some regulations that would make any other small businessperson want to pull their hair out.

South Dakota adopted a seed-to-sale model of medical marijuana regulation. It is actually the most common model, even in cannabis-friendly states like Colorado and Oregon. Every seed will have a unique bar code, and this bar code essentially follows the cannabis all the way to the point of sale. The bar code and information about the cannabis has to be sent to the Department of Health at every important change in plant structure, harvest, transfer, etc. Additionally, every facility has to have air-tight security regulations, including multiple cameras that record continuously, with the video to be stored for 120 days. Businesses must have specific site plans that regulate how people actually get in and out of the dispensary. This is just scratching the surface of the regulatory requirements of the program.

For patients, though, the process will be much easier, and a patient’s ability to obtain and use a medical cannabis card will not be overly burdensome. With the exception of being stopped at the door, a patient who has not read the administrative rules likely will not know all the rules and regulations tied to their purchase.

Dispensaries, cultivation and manufacturing facilities are now able to begin submitting their applications for a license to the S.D. Department of Health. Most local governments are requiring some form or pre-approval, so the state’s review of applications has not begun in earnest.

Many communities, including Yankton, placed a cap on the number of dispensaries in their jurisdiction. The caps have resulted in two relatively unforeseen circumstances.

First, in some larger markets (e.g. Rapid City), a literal lottery has developed where applicants are submitting as many applications as possible to increase their odds of getting a state license, but in other large markets (e.g. Sioux Falls), a high application fee has resulted in no applications.

Second, nearly all the applications are for dispensaries only. There does not appear to be a lot of applications for cultivation or manufacturing facilities. Marijuana businesses are “vertically-integrated,” meaning one company strives to grow, manufacture and sell its own cannabis and cannabis products. It is not common for one company to grow and another company to sell. Since the local caps create uncertainty about how much cannabis each company will need to grow, many companies are proceeding cautiously with their cultivation or manufacturing plans. This is not meant to be a criticism of local caps, but this has been the results affecting some areas of the state. There are valid reasons for local caps as well.

This means that, even though people can begin getting medical cannabis cards on Nov. 18, patients likely will not be able to buy cannabis in their local community for several more months.

I am only scratching the surface of the political, legal and economic framework of the state’s medical marijuana program. Newspaper op-eds are not a good place to get too deep into the weeds though. (A pun!)

With that, it continues to be a privilege to represent you. If you have questions or comments about the medical marijuana program, please feel free to reach out at ryan.cwach@sdlegislature.gov.

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