South Dakota Cannabis Panel Wants Complete Legalization and 15% Tax

Cannabis should be legalized, regulated, and taxed like many other profitable commodities in South Dakota, according to the state legislature. Residential voters seem to be in agreement, with a new poll showing that most South Dakotans disapprove of Gov. Kristi Noem’s current approach to cannabis legalization.

A group of lawmakers who’ve spent the last few months investigating cannabis policy made the comments during a recent meeting. The team, which consists of proud members of the Marijuana Interim Study Committee, recently celebrated the completion of a study that kicked off last spring.

The meeting saw committee members formally adopt a cannabis legalization recommendation to be put under the noses of the legislative panel. If the recommendation is approved by the full legislature, the state’s prohibitive stance on marijuana consumption, cultivation, and sale would officially come to an end.

“I’m not a supporter of marijuana but I’m trying to make sure that if we’re going to have it, we’ve got a good, solid regulatory system that is in the middle somewhere,” said co-chair of the committee, Republican Hugh Bartels. “[A system] that controls the product, makes sure it’s safe, makes sure it stays away from our children as much as we can, and that it pays for itself,” he added.

What Does South Dakota’s Cannabis Legalization Recommendation Entail?

Lawmakers are actively pondering over an extensive cannabis bill that essentially urges them to permit state licensing for cannabis cultivation, dispensaries, and testing facilities in South Dakota. The measure, which forbids recreational cannabis growing in private residences, also calls on lawmakers to ensure that local governments maintain the power to implement their own set of regulations and restrictions.

Conversely, South Dakota’s cannabis legalization recommendation recommends that a 15% tax be imposed on all cannabis products sold inside the state’s licensed dispensaries. This suggested tax rate is the same as the one that was included in the legal framework for Constitutional Amendment A, the voter ballot measure that attempted to legalize adult-use marijuana in November 2020. 

Unfortunately for members of the South Dakota cannabis panel, the cannabis legalization initiative is being contested by two South Dakota law enforcement officers in court, not to mention Gov. Noem. An original version of the bill attempted to eliminate the Department of Health’s medical cannabis program. Bartels was joined by four fellow lawmakers responsible for drafting the recommendations in saying that a medicinal cannabis program wouldn’t be required if the plant was legal for everyone aged 21 and over—an element of the bill that was eventually repealed during the committee’s recent meeting.

As the meeting progressed, Rep. Fred Deutsch (R-Florence) was seen submitting over a dozen amendments and the panel approved a handful of recommendations. They included (but are not limited to) making it compulsory for people who want to buy a medical cannabis card to first arrange an in-person meeting with a medical professional, including physicians assistants on the list of qualified medical experts who can authorize the plant’s use, and suggesting a three-plant limit for home cannabis cultivation by those in possession of a medical marijuana card.

A suggestion to impose fines on cardholders if they changed medical providers without first informing the DOH was also dismissed, as well as a recommendation to charge someone who buys medical cannabis from a licensed dispensary if they do not possess a valid card. If the recommendations are to be introduced on a formal basis during the Capitol’s next regular lawmaking session, they must first be given a nod of approval from the legislature’s executive board. 

SD Supreme Court Nullifies 2020 Cannabis Legalization Initiative 

On Wednesday, Nov. 24, the South Dakota Supreme Court ruled that a voter-approved cannabis legalization bill was void on procedural grounds. All hope is not lost, however, with advocates now going after a two-track plan to authorize a reform mission in the year 2022.

A vote of 4-1 led to the judge’s decision to endorse a circuit court ruling deeming the 2020 ballot measure a violation of the state’s single-subject rule for constitutional amendments. What this meant was that the bill’s contents were too diverse and required streamlined revisions in order to be accepted in accordance with the electoral standard.

Initially, the legal case was brought to light by two law enforcement officers. However, it was financially supported by taxpayer money that was provided via Noem’s administration. The justices “determined that the provisions of Amendment A embraced three separate and distinct subjects,” reads the court’s official press release, which emphasized that the legalization measure focused primarily on adult-use cannabis, hemp, and medical cannabis:

“In reaching its decision, the majority opinion explained that the provisions involving recreational marijuana, hemp, and medical marijuana each have separate objects and purposes, which were not dependent upon or connected with each other. The drafters’ failure to comply with the single subject requirement in the South Dakota Constitution Article XXIII, § 1 meant that voters were unable to separately vote on each distinct subject embraced in Amendment A.”

In its opinion, the majority of the court said it “long ago emphasized the significance of the constitutional requirement ensuring voters are afforded an opportunity to vote separately on each separate subject contained in a proposed amendment.” Medical cannabis in South Dakota has been legal since July 1, 2021. The rule change occurred after a successful ballot initiative on Nov. 3, 2020. Before this time, the plant was illegal in its entirety and South Dakota was acknowledged as the only U.S. state to forbid controlled substance ingestion.