Does South Dakota Require Marijuana Growers to Obtain Cultivation License?
In South Dakota, Measure 26, the Medical Marijuana Initiative of 2020, establishes a system of licenses and regulations administered by the South Dakota Department of Health for medical marijuana business establishments. These business establishments include cultivation facilities, manufacturing facilities, dispensaries, and testing laboratories. A cultivation license authorizes the holder to cultivate, harvest, dry, cure, package, distribute, transfer, transport, or sell cannabis to medical cannabis facilities. A licensee may also package and label cannabis for retail sale. According to 44:90:05:04 of South Dakota’s Medical Cannabis Final Rules, the only acceptable areas where licensees can cultivate cannabis include:
- An indoor facility
- One or more greenhouses
- Within a secured, fenced-in area
These cultivation areas must meet all the requirements of Section 44:90:04:05 through 44:90:04:10. Some of the requirements are stated below:
- The cultivation facility must not perform any cultivation facility activity outside the operation of hours stated in the facility’s approved operating procedures except in critical situations requiring prompt action to protect inventory from destruction. However, the licensee will be required to notify the department within one business day about the nature of the critical situation, the activities conducted, and the date and time of the activities.
- The cultivation area must be surrounded by fencing and gates that are:
- Not less than six feet high;
- Secure and undamaged; and
- Concealed, or have a cover that conceals, regulated activities from being readily viewed outside the fenced-in area.
- Any cultivation license holder who uses a department-approved pesticide must hold a current pesticide applicator certification issued by the South Dakota Department of Agriculture and Natural Resources.
- A cultivation facility will not be allowed to use pesticides during cannabis cultivation unless it contains only the active ingredients approved by the department under § 44:90:05:09 and is listed in the cultivation facility’s operating procedures filed with the department. In these cases, the approved pesticide must be applied by an established agent with a current pesticide applicator license. The established agent must use the pesticide following the product label.
Furthermore, a cultivation facility must not be within 1000 feet of a public or private school that existed before the date of the medical cannabis establishment application.
What Are the Different Types of Cultivation Licenses in South Dakota?
In South Dakota, the only license that authorizes business establishments to cultivate cannabis is the cultivation license. The cultivation license is not classified according to cultivation site, size, or type; one license applies to all forms of cannabis cultivation that the law permits.
Who Can Grow Marijuana in South Dakota?
Adults aged 21 or older can grow up to three marijuana plants in their homes if they reside in an area with no licensed marijuana dispensaries. If two or more marijuana growers reside in the same apartment, they will only be allowed to grow six plants. A registered medical marijuana patient may be entitled to grow more than three plants. However, the patient must submit an application to cultivate more than three plants. It must also be accompanied by a certification from the patient’s physician, authorizing the cultivation of an extended plant count. There is no law restricting who can own, operate, or work in a cannabis farm, and employees do not need to possess any permit or license. Persons that have been previously convicted of a disqualifying felony crime or a crime in violation of SDCL 34-20G-74 may be restricted from growing marijuana.
How to Get a Marijuana Cultivation License in South Dakota
Persons seeking to get marijuana cultivation licenses in South Dakota may apply to the Department of Health. This process involves getting a medical cannabis establishment registration certificate applicable to all marijuana business activities, including cannabis cultivation. An applicant can apply for a registration certificate online via the online registration platform. To register for a cannabis cultivation registration certificate, follow these steps:
1. Register An Account Or Log In To An Existing Account
If you have an existing account, log in with your username or email and password and if you are a new applicant, click on “Register Now.” You will be directed to the “Account Registration” page, where you will be required to read the disclaimer and check the “I agree” box before clicking "Continue Registration." After this, fill in the required information on the “Account Registration Step,” where you will be required to create login details, including user name, email address, password, etc.
Select account type: Individual or Organization and fill in every required information for the account type chosen.
3. Provide Establishment Information
An applicant will be required to provide the following:
- SD sales tax ID - The Department of Health will permit applicants to submit their applications without sales tax IDs subject to the November 1, 2021 deadline. However, this sales tax ID must be supplemented within 14 days of submission.
- The physical address of each proposed medical cannabis establishment.
- Proof of property owner’s consent to the use of the property for cultivating cannabis (If applicable).
- Provide information from your cannabis establishment’s operating procedures, including building specifications, the number of plants to be cultivated, and the type of chemicals (e.g., fertilizers, solvents, pesticides) to be used.
- Photocopies of operating procedures consistent with South Dakota Administrative Rules 44:90:03:06 for cultivation facilities, including:
- The number of seedlings to be cultivated;
- The number of mature cannabis plants, or size of the plant canopy, to be cultivated;
- The irrigation, lights, greenhouses, and other equipment to be used and the approval listing issued by a nationally recognized testing laboratory;
- Plans for providing water, electricity, and other utilities required for the regular operation of the cultivation facility;
- Plans for filtration and ventilation systems that reduce the potential for mold;
- Detailed plans for remediating cannabis, describing the steps to be taken by the type of test failed; and
- A list of all fertilizers, pesticides, insecticides, and fungicides that will be present or used \
Note that all specifications listed in these sections must be addressed; failure to do so will be considered grounds for application denial.
4. Submit The Local Government Compliance Certificate
The application should include the Department of Health’s Local Government Compliance Certification form (FORM E). For applicants whose application deadline is November 1st, the Local Government Compliance Certification form (FORM E) should be submitted after the local government in their jurisdiction completes it. The form may also be submitted after the November 1st application deadline.
In addition, the Department of Health mandates that an applicant representing the proposed medical establishment certifies the following as conditions of the registration certificate:
- Any misrepresentation to the department is grounds for suspension, denial, or revocation of certification.
- The information present is complete and accurate, and that any change to the information presented must be submitted to the department not exceeding ten days of the specific change.
- The board members or principal officers of the proposed medical establishment are 21 years of age or older.
- At least one principal officer resides in South Dakota.
- No board members or principal officers of the proposed medical cannabis establishment have served as a board member or principal officer for a medical cannabis establishment; if the establishment’s registration certificate has once been revoked in South Dakota or any other state in the US or its territory.
- Noncompliance with the operating plan approved by the department may be grounds for certification suspension, revocation, or other action.
- A criminal background check has been performed for each principal officer and board member under ARSD 44:90:03:14, and none has been convicted of a disqualifying felony as defined in SDCL 34-20G.
- A criminal background check has been conducted on the agents, and they have not been convicted of a disqualifying felony crime or a violation of SDCL 34-20G74.
- Each agent of the proposed medical establishment will have an agent identification badge issued by the establishment.
- Submitting the application establishes permission to inspect premises, vehicles, and records (paper or electronic).
- The person who signs the application is legally authorized to act on behalf of the applicant.
- The cannabis cultivation establishment applied for on the form will use the state-managed seed-to-sale tracking system.
Applicants are allowed to apply for more than one cannabis business establishment type, but they must be on a separate form for each additional establishment’s physical address. However, if the establishments are under common ownership and are to be co-located, the same form may be used. Co-location means sharing common entrances and exits with another cannabis business establishment.
Note that an application is considered incomplete and will not be processed if payment is not made promptly. After payment is made and the required information and documentation are provided, the applications will be processed within up to 90 days.
How Much Do Marijuana Cultivation Licenses Cost in South Dakota?
The Department of Health charges a nonrefundable application fee of $5,000 for each medical establishment registration certificate. The same fee applies for an initial or renewal application for a cannabis business establishment registration certificate. The fees imposed for the registration certificates shall increase annually based on the index factor as calculated by the Bureau of Labor Statistics of the United States Department of Labor.
Can Licensed Marijuana Cultivators Hold Other Cannabis Licenses in South Dakota?
Yes, cannabis cultivators that possess cannabis business establishment registration certificates in South Dakota may apply for and obtain other licenses. However, a licensed cultivator cannot obtain a testing laboratory license.