Simplified: The Sioux Falls City Council Tuesday night passed the first reading of several measures to regulate where, when and how medical marijuana is sold in the city. Restrictions include $100,000 licensing fees and a cap of no more than five dispensaries.

Why it matters

  • Medical marijuana is legal in South Dakota as of July 1, but the state Department of Health has yet to release final rules for how those in the cannabis industry and medical marijuana users are allowed to operate.
  • Most decisions related to usage (i.e. how much a person can get at one time) are up to the state, but the city has say over what are called "time, place and manner" restrictions for cannabis businesses.
  • Most councilors said they voted in favor of legalizing medical marijuana on the statewide ballot in 2020, but opinions varied on whether the proposed regulations were appropriate or too restrictive.
  • Conversations got tense after hours of discussion on marijuana-related issues, and at one point, Mayor Paul TenHaken had to split up a spat between Councilor Pat Starr and Councilor Christine Erickson.

How did we get here?

Quick history time.

  • Voters passed an initiated measure in 2020 legalizing medical marijuana.
  • Voters also passed an amendment to legalize recreational marijuana, but that measure is tied up in court.
  • After some back-and-forth in the state legislature, the measure ultimately became legal on July 1 with some built-in lag time for the state Department of Health to suss out rules before marijuana businesses begin opening.
  • That leaves each city and county the responsibility of making their own time, place and manner restrictions as well as setting the price for licenses required to open cannabis businesses.

In Sioux Falls, specifically:

Earlier this year, councilors decided to delay letting any marijuana dispensaries open up shop until after state rules are in full effect.

  • Now, the measures discussed Tuesday give a clearer picture of what the local rules will be when the licenses are issued later this year.

What's in Sioux Falls' marijuana rules?

Quite a bit, as one might imagine, so I'll break it down by the time, place and manner categories.

Time restrictions

Dispensaries may only operate between 8 a.m. and 10 p.m., per the proposed ordinance.

Place restrictions

Dispensaries and testing facilities within city limits*:

  • Must be 1,000 feet from sensitive use areas (i.e. schools, churches),
  • Must be 1,000 feet from any other medical cannabis dispensary or testing facility,
  • Must post a sign at the entrance stating the nature of the business
  • Cannot have any part of the inside of the dispensary visible to people walking by on the sidewalk, driving by on the street or in any other public area around the business.

* Rules vary slightly when you get out into the jointly regulated areas in Minnehaha and Lincoln County. But largely it's 1,000 feet from homes, schools, churches, etc.

Here's a map of areas that fit those rules:

Manner restrictions

This is where the list gets long. The full text of the proposed medical cannabis ordinance is 13 pages long and can be found here.

Here are a few:

  • Only medical marijuana dispensaries and testing facilities are allowed within city limits. Cultivation and manufacturing facilities are not included.
  • Dispensaries have to have a plan to detail theft-prevention.
  • Dispensaries can't share space with a practitioner nor refer anyone to a practitioner.
  • No one can consume cannabis on site at a dispensary.
  • Anyone working for a dispensary has to undergo a background check, be over age 21 and never have been convicted of a felony.

What about rules to license a business?

Prospective medical cannabis businesses will need to pay a $100,000 initial license fee to cover the first year+ and renewal fees cost $100,000 every two years.

Licenses will be capped at five, and businesses will be picked for a license through a lottery, per the proposed ordinance.

What are people saying?

The public came out strong to give input on the marijuana measure at Tuesday's City Council meeting.

Discussions lasted nearly three hours on the various marijuana-related measures.

Councilor Greg Neitzert, who has largely led the charge on this ordinance for the council, presented the details of the plan.

"Let's not go too fast and make mistakes," Neitzert said in his presentation. "Let's look for a balanced, common-sense approach, not necessarily what works in San Francisco or Colorado."

Many members of the public asked the city to consider less-restrictive measures, including Melissa Mentele, the author of IM-26, the ballot measure voters passed to legalize medical marijuana statewide.

"We want to have a conversation that's real, and we hope that you guys will sit down with stakeholders and really talk to us," Mentele said.

Another speaker was Emmett Reistroffer, who's worked in the cannabis industry for a decade and has plans to open a dispensary in Sioux Falls.

Reistroffer told Sioux Falls Simplified he's a "pragmatist" and, while he has issues with licensing fees and restrictions, he wants to see this move forward.

Mayor Paul TenHaken in a news release announcing the proposal said he was one of the supporters of IM 26 on the ballot, but he also noted a "dramatic increase" in the access to and presence of marijuana in Sioux Falls.

"As mayor, it is my duty to balance that access with the health and safety of our community," he said.

Councilor Janet Brekke called the regulations an "overreaction," saying she'd rather see the ordinance start broad and focus just on medical marijuana rather than trying to plan now for recreational, which is still illegal.

"To regulate it as if (recreational marijuana) is already here ends up being punitive to those who want to get into this (medical) side of the business," Brekke said.