South Dakota Medical Marijuana Industry Pushes For Rules Changes As Program Enrollment Dwindles

“Is this program working, and do the rules make sense? Yes for public safety, but do they make sense for the people trying to run businesses?”

By John Hult, South Dakota Searchlight

Cannabis industry advocates said Monday that they need representation on the state’s Medical Marijuana Oversight Committee.

The committee also learned that the number of patient cards issued in South Dakota has continued to fall since a February peak, sparking concern from the group’s patient representative about marijuana card denials.

South Dakota’s medical cannabis program is governed by both state law and a set of administrative rules interpreting those laws for use in the day-to-day operations of the program.

The issues presented by the cannabis industry on Monday were largely related to rules, not the medical pot chapter of South Dakota law. Most of those issues could be resolved through the rulemaking process, but the committee didn’t review any potential rule changes at its meeting in Pierre.

That’s in part because of an early deadline for rules this year. Rules need to be posted, and the public needs time to comment on changes, before getting approval from the state’s Rules Review Committee.

That committee’s final meeting before the 2025 legislative session came last month, which was earlier than previous years.

Emily Kerr of the health department told the committee that there wasn’t enough time to write new rules and hold public hearings after the 2024 legislative session.

“We really want to take the time to have robust conversations with legislators and industry,” she said.

Staffing was also mentioned as a hurdle for rule changes. The program recently hired three more people to help administer the cannabis program, but they’ve only been on the job a few months.

Industry: Rules push up prices

Pot lobbyist Jeremiah Murphy told the committee he understands that timing was an issue this year, in part because the health department runs the program with minimal staffing.

But he also said the committee is failing to address important operational issues that relate to its statutorily required duty to oversee the program and make recommendations to help make sure cannabis is accessible to patients at reasonable prices.

A change to state law in 2023 altered the committee’s makeup, which had originally required the inclusion of three medical cannabis patients. Now, there is one patient, and everyone else on the committee is in law enforcement, lawmaking or a part of the medical community.

Murphy said the lack of operational knowledge has allowed rules that push up the price of doing business—and, in turn, push up the price of cannabis for patients—to go unchallenged.

“We’d like to see the focus turn to include, more broadly, operations,” Murphy said. “Is this program working, and do the rules make sense? Yes for public safety, but do they make sense for the people trying to run businesses?”

Murphy’s only ask for the committee’s lawmakers was for them to consider adjusting the committee’s makeup by changing state law. But he had several examples from the Department of Health’s interpretation of its cannabis program rules he said could be fixed by the committee and the department.

Some of the rules, Murphy argued, are illogical, wasteful and overly burdensome.

One requires growers to test their crops in 50-pound batches, but that 50 pounds is measured before the crop is dried. Dried marijuana weighs about a fifth of its wet weight, Murphy said.

If the health department allowed operators to dry out the product before being divided into batches, operators would only need to pay for a fifth as many tests.

Ned Horsted of 605 Cannabis said he spends “six to 10 times” what he would if the state used the dry weight system commonly used in other states.

Murphy and the other cannabis industry advocates pointed to a handful of other issues, as well. Cannabis deliveries must use the same courier for pickup and delivery, for example, regardless of how many stops they might make or how far they’re going in a given day.

“There needs to be a way to safely put that product in another person’s hands,” Murphy said.

Lawmaker unconvinced of need for law change

Sen. Erin Tobin (R-Winner) said she expects most of the issues presented Monday could be cleared up through the rule-making process, rather than by legislation. She also told Murphy she’s not sure changing the committee’s makeup is necessary to make changes to rules.

Patients, municipal governments, school board members and designated caregivers might also have input for the committee, Tobin said.

She noted that the bill that changed the committee’s makeup specified that its members are meant to take input and consider the views of industry representatives, patients and the like at each of its meetings.

“You could argue that we need one of everything, right?” Tobin said. “We have an opportunity with the speaker and a mic for anybody that would like to come forward, and that’s valuable to us.”

Patient numbers dropping

Brad Jurgensen, the lone patient representative on the committee, noted that the number of medical marijuana cards in South Dakota has dropped considerably.

As of October 24, there were 12,186 patient cards in circulation in South Dakota. That’s down by 1,519 from February, when the state hit 13,705 card holders.

“Is there any state-specific reason why those numbers would be going down?” Jurgensen asked.

By then, Kerr had left the room.

Kittrick Jefferies, of Black Hills-based Puffy’s dispensaries, told the committee that his customers talk of being denied because their condition doesn’t qualify for a medical cannabis card under state law, but that “it’s all anecdotal.”

Department of Health spokesperson Tia Kafka did not immediately respond to a Searchlight question on why the number of cardholders is dropping.

The number of practitioners approved to write pot prescriptions, however, has continued to increase. More practitioners have been added to the state’s list every month since December of 2022.

This story was first published by South Dakota Searchlight.

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Photo courtesy of Chris Wallis // Side Pocket Images.