South Dakota Manufacturing Marijuana License

Does South Dakota Require a Marijuana Manufacturing License to Make Cannabis Products?

Yes. According to Initiative 26, the measure that legalized medical marijuana in South Dakota, no medical marijuana establishment other than a marijuana product manufacturer may produce marijuana extractions, concentrates, or other products without the requisite license. Similarly, Constitutional Amendment A, which legalized recreational cannabis, requires and empowers the South Dakota Department of Revenue (DOR) to issue licenses allowing marijuana manufacturing. A marijuana manufacturer license authorizes its holder to obtain, possess, manufacture, deliver, transport, and sell cannabis products to licensed medical marijuana dispensaries and recreational cannabis stores. The South Dakota Department of Health regulates the state's Medical Cannabis Program and issues licenses for medical marijuana manufacturing. Local governments can ban or regulate the establishment of marijuana facilities, including manufacturing facilities within their jurisdictions.

In South Dakota, persons 21 years and older, in addition to possessing and cultivating not more than three marijuana plants, can manufacture the marijuana produced by such plants without licenses provided:

• The marijuana produced by such plants in excess of 1 ounce is kept in locked spaces within their private residences.
• Such persons live in local jurisdictions with no licensed marijuana stores to sell marijuana products.

Does South Dakota Require Licensed Cannabis Manufacturers to Have Cultivation Licenses?

It is not mandatory for licensed cannabis product manufacturers in South Dakota to possess cannabis cultivation licenses. The state marijuana laws permit them to acquire cannabis from licensed cultivation facilities and other cannabis product manufacturing facilities.

How Does South Dakota Classify Marijuana Manufacturing Licenses?

South Dakota only has one class of marijuana product manufacturer license, without which no person or entity can manufacture marijuana products commercially.

What are the Different Types of Cannabis Manufacturing Licenses in South Dakota?

The marijuana industry in South Dakota offers marijuana product manufacturer licenses for both medical and recreational cannabis businesses. The medical marijuana product manufacturer license allows its holder to manufacture marijuana for the medical market and the Department of Health oversees the activities of such licensees. Holders of recreational marijuana product manufacturer licenses manufacture cannabis for recreational use and are regulated by the South Dakota Department of Revenue (DOR).

Does South Dakota Require a Separate License to Manufacture Edibles?

No. Besides other marijuana products, South Dakota marijuana product manufacturer licenses permit holders to manufacture edible marijuana. However, a manufacturing facility must declare edible marijuana products as part of its operating plan to manufacture edibles. They must also get a South Dakota food establishment license and hire a certified food manager that meets the specifications of the licensing authority. Generally, an edible marijuana product is any product that is infused with marijuana or its extract. They are meant for human oral consumption and are usually prepared as beverages, oils, foodstuffs, tinctures, and extracts. In South Dakota, no marijuana product manufacturer can manufacture any edible marijuana that has more than 10mg of THC per serving.

How to Get a Cannabis Manufacturing License in South Dakota

Entities interested in getting medical marijuana product manufacturer licenses, otherwise called registration certificates, from the South Dakota Department of Health must apply via the Medical Cannabis Program Online Portal. New users are required to register for a free Citizen Access account before initiating their applications.

None of a proposed medical marijuana product manufacturing establishment's board members or principal officers must be under 21 years of age. The Department of Health requires at least one of the principal officers to be a resident of South Dakota. Additionally, no board member or chief officer must have served in a medical marijuana establishment whose license has been revoked in South Dakota or any other state in the United States.

In South Dakota, a medical marijuana product manufacturer license applicant must provide the following in the course of their application:

• The legal name of the proposed marijuana product manufacturing establishment
• Copies of legal documents such as bylaws, operating agreements, and management agreements of the proposed marijuana manufacturing business
• Clear copies of local permits and registrations for jurisdictions that require them. The Department of Health provides a guide on the treatment of medical marijuana license applications concerning local governments with laws pertaining to marijuana establishments licensing.
• The name, address, and birth date of each board member and principal officer
• Valid government-issued IDs for all board members or key officers of the proposed marijuana product manufacturing facility
• Address of the proposed manufacturing facility whose physical location must be outside 1,000 feet of any school existing in that area before the date of filing their application
• Evidence that the owner of the property proposed for the marijuana manufacturing establishment has given consent for such business activity
• Compliance certificate issued by the local municipality stating that the applicant's proposed location and plans satisfy their local ordinance and zoning specifications
• Proof that background checks have been completed for all applicant parties (None of them must have been convicted of a disqualifying felony offense)

A medical marijuana product license applicant must also provide an operating procedure containing enough detail to determine their compliance with the South Dakota Codified Law 34-20G. Some of the information their operating procedure must show are:

• A description of their proposed manufacturing process
• A description of the types of medical marijuana products their manufacturing establishment will manufacture
• A draft of how to prevent fire or respiratory hazards within their facility using good ventilation and filtration systems
• A pictorial description of the sections of the facility where manufacturing activities will take place and another one showing the proposed storage space for any solvent excluding chemicals, water, or potentially harmful substances

Typically, license applicants can save the progress of their applications if they are unable to provide all required information and documents at once. Hence, they can complete the application process in multiple sittings after attaching all that is required for a complete application. Applicants must pay the required application fees, without which the Department of Health will not process their applications. Typically, the application process takes up to 90 days.

As of October 2021, there is still a lawsuit targeting recreational marijuana in South Dakota. Consequently, the Department of Revenue (DOR) has yet to release the application process for recreational cannabis business licenses, including recreational marijuana manufacturer licenses. However, Constitutional Amendment A mandates the DOR to issue the required regulations to implement and enforce its provisions not later than April 1, 2022. These rules will include the procedures for issuing, renewing, revoking, and suspending recreational marijuana business licenses. They will also cover applicants' qualifications for licenses, facility security requirements, application cost, licensing cost, and license renewal fees. The DOR will issue or deny a license application within 90 days.

How Much Does a Cannabis Manufacturing License Cost in South Dakota?

In South Dakota, all medical marijuana business license applicants, including those applying for medical marijuana product manufacturer licenses, must pay a $5,000 fee. This fee also applies to license renewals. A licensed establishment will pay an additional $250 to operate at a different physical address or transfer ownership interest to any individual not originally listed on their initial application or renewal request. These fees are non-refundable.

The South Dakota Department of Revenue (DOR) has yet to specify the costs associated with obtaining recreational cannabis licenses because of the current lawsuit against recreational marijuana. However, according to Constitutional Amendment A, application, licensing, and renewal fees will not exceed the amount required to cover the DOR's cost of implementing its provisions.