STURGIS — Sturgis City Council members have varying ideas of how to proceed with the regulation of medical marijuana within the city.
Beka Zerbst, president of the Sturgis City Council, said there are a myriad of unanswered questions about implementing city policies concerning medical marijuana which was approved by voters in the 2020 general election statewide.
“For me, one of the biggest disappointments is the lack of information from the state. They have known since November of last year. I look at it as somewhat of a failure of leadership,” she said. “We are left out here standing trying to figure this out knowing that for at least three more months we will not have any final guidance from the state of South Dakota. I think that is really shameful.”
She said she knows the city will somehow muddle through this issue and make the best decisions for the community.
“It’s so frustrating as a municipal leader to know that we are flying – almost blind. Thankfully, the Department of Health came out with their 105-page draft rules, but really, getting through that is like reading Chaucer,” she said.
The council took no action Tuesday, but in the coming months, the city has several policy decisions to make concerning regulation of medical marijuana. Among those decisions is should the city authorize dispensaries, and if so, how many. Also to consider if a dispensary is approved, is what zones would be appropriate for cannabis businesses and cultivation areas.
Sturgis Police Chief Geody VanDewater said he believes if a grow operation were placed in the industrial park, it would make the business more vulnerable for a break-in.
“If we go with the commercial (zone) it’s more easily accessible. It’s tough for us to be everywhere at once,” he said.
VanDewater did encourage the city council to address security issues associated with cannabis businesses.
“We still have problems with people who have drug issues or alcohol issues that can’t afford to purchase the stuff so they are going to find ways to steal it. They are going to do whatever they can to either get the product, or get the money for it.”
And lastly, the city is discussing whether or not the city should be the one to operate the dispensary in some form. One option would be for the city to maintain ownership of the dispensary license but lease this license to an independent private business. This is how several cities in South Dakota operate their city liquor store, Sturgis City Manager Daniel Ainslie said.
Another option might be for the city to own all dispensary licenses and lease at least two private dispensaries.
A final option being considered is to use a system similar to how several cities in South Dakota operate their liquor stores. The city would issue licenses for a set number of dispensaries within the community. The license could include a license fee. This is the route Mitchell recently chose and set an annual fee at $5,000.
Who can buy medical cannabis?
In a traditional medical cannabis dispensary store a patient receives cannabis medication as allowed per the patient’s doctor’s recommendation.
The South Dakota Department of Health announced a preliminary list of conditions that will be covered by the state’s medical cannabis program, which went into effect on July 1.
“Under the law passed by the voters, patients must be experiencing a ‘debilitating medical condition’ and be certified by a doctor that medical cannabis will help alleviate their condition,” said South Dakota Secretary of Health Kim Malsam-Rysdon. “This preliminary list of conditions meets the definition as passed by the voters, and is a result of feedback the department has already received. A process will be available for South Dakotans to petition to add more conditions to this list in the future.”
The preliminary list of conditions includes:
Acquired Immune Deficiency Syndrome (AIDS) and positive status for Human Immunodeficiency Virus (HIV);
Amyotrophic Lateral Sclerosis (ALS), also known as Lou Gehrig’s disease;
Cancer associated with severe or chronic pain, nausea or severe vomiting, or cachexia or severe wasting;
Post-Traumatic Stress Disorder (PTSD).
Still in the discussion phase
The city’s planning and zoning commission held a public meeting on June 22 to consider how to proceed. The board then provided the council with ideas on a path forward.
At its meeting Tuesday, July 6, the city council discussed at length many of the aspects of medical marijuana including whether or not the city would own a dispensary much like they currently own the city liquor store.
The Sturgis Planning and Zoning Commission will meet again on July 12 and issue recommendations for policies. First reading of a city ordinance regulating medical marijuana is expected at the council’s July 19 meeting. A second reading would be at a special Sturgis City Council meeting on July 26. If passed, the ordinance would become effective immediately.
City officials revealed that in comparing sales of both medical and recreational marijuana in Colorado to the potential for sales in Sturgis, the city could possibly earn gross sales of $1.7 million annually.
“That’s a real ball-park number,” Ainslie told the council.
The Department of Revenue has told city officials that they believe there would need to be enabling legislation passed during the next session in order to authorize municipalities to either directly own and operate a dispensary, or to own and lease that license out to a private owner with a portion of the proceeds going back to the city.
It also may be possible for the Department of Revenue to include that ability for cities within the regulations it formulates, Ainslie said.
“I can’t tell you exactly which way the Department of Revenue is going to land when they issue their guidelines,” he said.
Starting discussion on whether the council is truly interested in city ownership or city leasing of the license would allow city officials to explain to the Department of Revenue that there is significant interest in the concept, Ainslie said.
The legalization of medical marijuana could lead to the need for more social services programs and law enforcement in the community, said Sturgis City Council member Dave Martinson.
“Keeping that in mind, it kind of leads me to think that somehow whether it is municipally owned or there is a municipal leasing, that somehow we should stay in it to make sure there is enough money available to take care of some of these issues that might come down the line,” he said.
Council member Aaron Jordan said he agrees there may be additional costs that may arise for the city with the legalization of medical marijuana but doesn’t agree the city should own the dispensary.
“It just doesn’t really fit for municipalities to get into the business from my perspective. If there is an opportunity for a private individual to meet the criteria…then we would allow that individual to run that business,” he said.
Council member Mike Bachand said he doesn’t see a dispensary license as much different than city liquor licenses.
“This isn’t a walk-in, you get to smoke it there on the premises. This is more like packaged alcohol. If we model it after that, we will have a lot less problems to deal with than allowing the licenses to go out to a retail area,” he said.
Where does the city go from here?
Ainslie said he has been approached some that have shown interest in potentially growing (marijuana) in Sturgis.
“There could be some marketability with the Sturgis name,” Ainslie said. “If you’re looking at a cottage industry, it very well might be an industry that could expand the overall economic growth of the town.”
City council member Dean Sigman said he is against anyone growing marijuana in town.
“Based on the knowledge I have now, I would be against it,” he said. “I’ve yet to hear one story where someone has come from Colorado or these other places and said, ‘Wow! Things have gotten better for everybody,’” he said.
Sigman said that is an illusion that making things better for everyone is not achievable, but he sees the legalization of marijuana as a detriment than a positive for communities.
“I’m not saying there are not people who benefit from the medical use, because I know that there is, but I would just shy away from it now,” he said.
City council member Angela Wilkerson said the city should take a conservative approach to medical marijuana so it “doesn’t end up like a Colorado.”
Jordan agreed saying the city should try to keep the number of dispensaries low, and oversee where marijuana can be dispensed or grown.
“Based on how things work out, we can expand on that. It really comes down to control,” he said. “Regardless of what option we go with… we do have a lot of control.”
That control won’t mitigate risk on the city’s part, but it can help to reduce it, Jordan said.
“It looks like we are being somewhat conservative. Ultimately, it’s going to happen one way or another,” he said.
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