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:
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:
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.
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.
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 34-20G74 may be restricted from growing marijuana.
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:
If you have an existing account, log in with your user name 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.
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.
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:
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.
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.
Yes, cannabis cultivators that possess the cannabis business establishment registration certificate business in South Dakota may apply for and obtain other licenses.