HomeMy WebLinkAbout2021_08_10 CC PKTCity Council
City of Brookings
Meeting Agenda - Final
Brookings City Council
Brookings City & County
Government Center
520 3rd St., Suite 230
Brookings, SD 57006
Phone: (605) 692-6281
Fax: (605) 692-6907
"We are an inclusive, diverse, connected community that fuels the creative class, embraces sustainability
and pursues a complete lifestyle. We are committed to building a bright future through dedication,
generosity and authenticity. Bring your dreams!"
Council Chambers6:00 PMTuesday, August 10, 2021
The City of Brookings is committed to providing a high quality of life for its citizens and fostering a diverse
economic base through innovative thinking, strategic planning, and proactive, fiscally responsible municipal
management.
6:00 PM REGULAR MEETING
1. Call to Order / Pledge of Allegiance.
2. Record of Council Attendance.
3. Consent Agenda:
Action: Motion to Approve, Request Public Comment, Roll Call
Matters appearing on the Consent Agenda are expected to be non-controversial and will
be acted upon by the Council at one time, without discussion, unless a member of the
Council or City Manager requests an opportunity to address any given item. Items
removed from the Consent Agenda will be discussed at the beginning of the formal
items. Approval by the Council of the Consent Agenda items means that the
recommendation of the City Manager is approved along with the terms and conditions
described in the agenda supporting documentation.
3.A. Action to approve the agenda.
3.B.ID 21-0383 Action to approve the July 27, 2021 City Council minutes.
7/27/2021 MinutesAttachments:
3.C.RES 21-064 Action on Resolution 21-064, a Resolution declaring surplus property for
the City of Brookings.
ResolutionAttachments:
3.D.RES 21-065 Action on Resolution 21-065, a Resolution authorizing the City Manager to
Page 1 City of Brookings
August 10, 2021City Council Meeting Agenda - Final
sign an On-Sale Liquor Operating Agreement renewal for Nine, Inc., DBA 9
Bar Nightclub, Gus Theodosopoulous, owner, 303 Main Avenue,
Brookings, South Dakota, legal description: Lot 2, Block 3, Original Plat
Addition.
Resolution
Operating Agreement
Map
Attachments:
3.E.RES 21-066 Action on Resolution 21-066, a Resolution authorizing the City Manager to
sign an On-Sale Liquor Operating Agreement renewal for W&P of
Brookings, LLC, dba Buffalo Wild Wings Bar & Grill, Todd and Susan
LaHaise, owner, 1801 6th Street. Legal description: A portion of Lot 6
(parcel 3), Village Square Addition.
Resolution
Operating Agreement
Map
Attachments:
3.F.ID 21-0390 Action to hold an August 17, 2021 City Council Study Session.
3.G.ID 21-0394 Action on City Council Ex-Officio Appointment to the Brookings Municipal
Utilities Board.
4. Items removed from Consent Agenda.
Action: Motion to Approve, Request Public Comment, Roll Call
5. Open Forum/Presentations/Reports:
5.A.ID 21-0384 Proclamation: 100th Anniversary of the Medary Chapter of the Daughters
of the American Revolution.
ProclamationAttachments:
5.B.ID 21-0369 Household Hazardous Waste Event
PresentationAttachments:
5.C.ID 21-0387 2020 Annual Comprehensive Financial Report and Audit Summary
PresentationAttachments:
5.D.ID 21-0389 2nd Quarter 2021 CFO Report
ReportAttachments:
5.E. Open Forum.
At this time, any member of the public may request time on the agenda for an item not
listed. Items are typically scheduled for the end of the meeting; however, very brief
announcements or invitations will be allowed at this time.
Page 2 City of Brookings
August 10, 2021City Council Meeting Agenda - Final
6. Contracts/Change Orders: None
7. Ordinance First Readings: None
The title of the Ordinance is read. No vote is required on the first reading of an
Ordinance. Public Comment and Council discussion is permitted. The date for the
second reading is announced.
8. Public Hearings and Second Readings:
8.A.ORD 21-026 Second Reading and Action on Ordinance 21-026, an Ordinance
Establishing Procedures for False Security Alarms in the City of Brookings,
South Dakota.
Memo
Ordinance
Attachments:
Action: Motion to Approve, Request Public Comment, Roll Call
Legislative History
7/27/21 City Council read into the record
8.B.ORD 21-027 Second Reading and Action on Ordinance 21-027, an Ordinance
Establishing the Number of Medical Cannabis Establishments in the City of
Brookings, South Dakota.
Memo
Ordinance
SDCL 34-20G
Medical Cannabis Rules
Attachments:
Action: Motion to Approve, Request Public Comment, Roll Call
Legislative History
7/27/21 City Council read into the record
8.C.ORD 21-028 Second Reading and Action on Ordinance 21-028, an Ordinance
Establishing Procedures for the Licensing of Medical Cannabis
Dispensaries in the City of Brookings.
Memo
Ordinance
SDCL 34-20G
Medical Cannabis Rules
Attachments:
Action: Motion to Approve, Request Public Comment, Roll Call
Legislative History
7/27/21 City Council read into the record
9. Other Business:
9.A.ID 21-0392 Action on an Addendum to the Armory Development Agreement.
Page 3 City of Brookings
August 10, 2021City Council Meeting Agenda - Final
Memo
Addendum
Agreement - October 2020
Attachments:
Action: Motion to Approve, Request Public Comment, Roll Call
10. City Council member introduction of topics for future discussion.
Any Council Member may request discussion of any issue at a future meeting only.
Items cannot be added for action at this meeting. A motion and second is required
stating the issue, requested outcome, and time. A majority vote is required.
11. Executive Session
11.A.ID 21-0391 Executive Session, pursuant to SDCL 1-25-2.5, preparing for contract
negotiations or negotiating with employees or employee representatives.
Action: Motion to enter into Executive Session, Voice Vote
Action: Motion to exit Executive Session, Voice Vote
12. Adjourn.
Brookings City Council: Oepke Niemeyer, Mayor; Nick Wendell, Deputy Mayor
Council Members Wayne Avery, Patty Bacon, Leah Brink, Joey Collins, Holly Tilton Byrne,
Council Staff:
Paul M. Briseno, City Manager Steven Britzman, City Attorney Bonnie Foster, City Clerk
View the City Council Meeting Live on the City Government Access Channel 9.
Rebroadcast Schedule: Wednesday 1:00pm/Thursday 7:00pm/Friday 9:00pm/Saturday 1:00pm
The complete City Council agenda packet is available on the city website: www.cityofbrookings.org
Assisted Listening Systems (ALS) are available upon request by contacting (605) 692-6281. If you require
additional assistance, alternative formats, and/or accessible locations consistent with the Americans with
Disabilities Act, please contact Susan Rotert, City Human Resources Director and ADA Coordinator at (605)
692-6281 at least three working days prior to the meeting.
Public Comment can be submitted: 1) via eComment on InSite (https://cityofbrookings.legistar.com/Calendar.aspx
), 2) Email your comments the City Clerk (bfoster@cityofbrookings-sd.gov ), or 3) participate via Zoom (contact the
City Clerk for login access bfoster@cityofbrookings-sd.gov ). Thank you.
Page 4 City of Brookings
City of Brookings
Staff Report
Brookings City & County
Government Center, 520
Third Street
Brookings, SD 57006
(605) 692-6281 phone
(605) 692-6907 fax
File #:ID 21-0383,Version:1
Action to approve the July 27, 2021 City Council minutes.
Attachments:
07/27/2021 Minutes
City of Brookings Printed on 8/5/2021Page 1 of 1
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Brookings City Council
July 27, 2021 (unapproved)
The Brookings City Council held a meeting on Tuesday, July 27, 2021 at 6:00 PM, at
the Brookings School Board Meeting Room at Dakota Prairie Elementary, 111 26 th
Street South, with the following City Council members present: Mayor Oepke
Niemeyer, Council Members Leah Brink, Patty Bacon, Holly Tilton Byrne, Nick Wendell,
Joey Collins, and Wayne Avery. City Attorney Steve Britzman, City Manager Paul
Briseno, and City Clerk Bonnie Foster were also present.
6:00 PM REGULAR MEETING
Mayor Niemeyer removed item 5.A. Recognition of Council Member Nick Wendell, and
item 9.B. Discussion on City Council Vacancy Process from the agenda. No objection
was made by City Council.
Council Member Nick Wendell provided a public statement rescinding his City Council
resignation.
Consent Agenda. A motion was made by Council Member Brink, seconded by Council
Member Collins, to approve the Consent Agenda. The motion carried by the following
vote: Yes: 6 - Niemeyer, Brink, Bacon, Tilton Byrne, Collins, and Avery; Absent: 1 –
Wendell.
3.A. Action to approve the agenda.
3.B. Action to approve the July 13, 2021 City Council Minutes.
3.C. Action on appointments to City Boards, Committees and Commissions:
Business Improvement District #1 Board: appoint Aaron Carsrud (term expires
1/1/2024); Historic Preservation Commission: appoint Kyle Nelson (term expires
1/1/2022); Human Rights Commission: appoint Diane Nagy, Erica Moore, and Joel
Gindo (terms expire 1/1/2023); Planning Commission: appoint Justin Borns (term
expires 12/31/2025); and appoint Roger Solum (term expires 12/31/2022).
3.D. Action on Resolution 21-063, a Resolution authorizing the City Manager to
sign and submit a Solid Waste Management Program Grant Application for a
Brookings Solid Waste Master Plan.
Resolution 21-063 - A Resolution Authorizing the City Manager to Sign and Submit a
Solid Waste Management Program Grant Application for a Brookings Solid Waste
Master Plan.
Whereas, the City of Brookings has operated and maintained the Brookings Regional
Sanitary Landfill since 1993, which provides essential solid waste management to
approximately 45,000 people between Brookings, Deuel, Hamlin, Kingsbury, Lake, and
Moody counties. The City also provides garbage collection services to residents within
the city limits of Brookings; and
Whereas, the purpose of a Solid Waste Master Plan is to evaluate and analyze the
Solid Waste Division’s operations and financial health, identify and address critical
short-term and long-term needs, and provide a road map for successful long-term solid
waste and recycling management; and
Whereas, the City contributes $1 per ton of tipping fees to the South Dakota
Department of Agriculture & Natural Resources Solid Waste Management Program.
Statewide contributions to this fund are used to award grants and low-interest loans for
projects at landfills throughout the state. In an effort to maximize available resources,
the City of Brookings has identified potential Solid Waste Management Program grant
funding to conduct master planning; and
Whereas, this resolution authorizes the City Manager to sign and submit the Solid
Waste Management Program Grant Application for a grant of up to $198,400 for a
Brookings Solid Waste Master Plan. The City Manager would also serve as the City’s
Official for the purpose of signing grant agreements, contracts, correspondence, pay
requests, and other required documents in connection with a grant and this project.
Now, Therefore, Be It Resolved that the City Manager of the City of Brookings is
authorized to sign and submit the Grant Application for a grant of up to $198,400 for a
Brookings Solid Waste Master Plan, and to sign agreements, contracts,
correspondence, pay requests, and other required documents for this project.
Proclamation. Mayor Niemeyer presented a Proclamation celebrating the 31st
Anniversary of the Americans with Disabilities Act to Mark Sternhagen, Brianna Doran,
and Aysia Platt, members of the Brookings Disabilities Awareness Committee.
Mayoral Proclamation
Whereas, the Americans with Disabilities Act (ADA) was passed on July 26, 1990, as
the first comprehensive declaration of equality for people with disabilities and protects
rights in all aspects of employment, in accessing public services, and guaranteeing
access to private establishments; and
Whereas, the goals of the community aligns with providing people with disabilities with
the opportunities and support to achieve full integration and inclusion in society, in an
individualized manner; and
Whereas, disability is a natural part of the human experience that does not diminish
the right to enjoy the opportunity to live independently, enjoy self -determination, make
choices, contribute to society, and experience full integration and inclusion with
necessary services and supports.
Now, Therefore, Be It Resolved, that I, Oepke G. Niemeyer, Mayor of the City
of Brookings, do hereby proclaim July 27, 2021 as Americans with Disabilities Act 31st
Anniversary and call upon the people of Brookings to:
1. Recognize and celebrate the progress that has been ma de by reaffirming the
principals of equality and inclusion and recommitting our efforts to reach full ADA
compliance for people with disabilities in the City of Brookings.
2. Continue advocating for full inclusion and equity of individuals with disabilities in
all aspects of society.
FIRST READING – Ordinance 21-026. Introduction and First Reading was held on
Ordinance 21-026, an Ordinance Establishing Procedures for False Security Alarms in
the City of Brookings, SD. Second Reading: August 10, 2021.
FIRST READING – Ordinance 21-027. Introduction and First Reading was held on
Ordinance 21-027, an Ordinance Establishing the Number of Medical Cannabis
Establishments in the City of Brookings, South Dakota. Public Comment: Emmett
Restroffer. Second Reading: August 10, 2021.
FIRST READING – Ordinance 21-028. Introduction and First Reading was held on
Ordinance 21-028, an Ordinance Establishing Procedures for the Licensing of Medical
Cannabis Dispensaries in the City of Brookings. Second Reading: August 10, 2021.
Ordinance 21-021. A motion was made by Council Member Bacon, seconded by
Council Member Collins, that Ordinance 21-021, an Ordinance repealing Article II of
Chapter 42 of the Code of Ordinances of the City of Brookings, SD, and pertaining to
the Board of Health, be approved. The motion carried by the following vote: Yes: 7 -
Niemeyer, Brink, Bacon, Wendell, Tilton Byrne, Collins, and Avery.
Ordinance 21-024. A public hearing was held on Ordinance 21-024, an Ordinance to
permit by Conditional Use a Hair Salon in a Residence R-1B Single-Family District on
Lot 5, Block 4, East Acres Second Addition, also known as 2029 Elmwood Drive. A
motion was made by Council Member Avery, seconded by Council Member Tilton
Byrne, that Ordinance 21-024 be approved. The motion carried by the following
vote: Yes: 7 - Niemeyer, Brink, Bacon, Wendell, Tilton Byrne, Collins, and Avery.
Ordinance 21-025. A motion was made by Council Member Tilton Byrne, seconded by
Council Member Collins, to approve Ordinance 21-025, an Ordinance establishing
zoning regulations for cannabis establishments.
A motion was made by Council Member Wendell, seconded by Council Member Tilton
Byrne, to amend Section 194-505B by striking the words "or another cannabis
dispensary." The motion carried by the following vote: Yes: 7 - Niemeyer, Brink, Bacon,
Wendell, Tilton Byrne, Collins, and Avery.
A motion was made by Council Member Wendell, seconded by Council Member Tilton
Byrne, that Ordinance 21-025, an Ordinance establishing zoning regulations for
cannabis establishments, be tabled. The motion carried by the following vote: Yes: 7 -
Niemeyer, Brink, Bacon, Wendell, Tilton Byrne, Collins, and Avery.
Temporary Alcohol Application. A public hearing was held on a Temporary Alcohol
Application from Aramark Educational Services, LLC, to operate within the City of
Brookings, South Dakota for the SDSU College of Engineering Fall Kickoff Reception to
be held on August 19, 2021 at the SDSU Alumni Center Woster Celebration Hall, 815
Medary Avenue. A motion was made by Council Member Tilton Byrne, seconded by
Council Member Collins, that the Temporary Alcohol License be approved. The motion
carried by the following vote: Yes: 7 - Niemeyer, Brink, Bacon, Wendell, Tilton Byrne,
Collins, and Avery.
Resolution 21-062. A motion was made by Council Member Collins, seconded by
Council Member Brink, that Resolution 21-062, a Resolution amending the
Consolidated Fee Schedule, be approved. The motion carried by the following vote:
Yes: 7 - Niemeyer, Brink, Bacon, Wendell, Tilton Byrne, Collins, and Avery.
Resolution 21-062 - Resolution Amending the Consolidated Fee Schedule
Whereas, the adopted Municipal Code and City Policies make references to fees
charged; and
Whereas, it is prudent that the fees be reviewed for cost effectiveness.
Now, Therefore, Be It Resolved, that the City of Brookings hereby adopts the following
Consolidated Fee Schedule as defined in the attached schedule.
Fee Description City Code 2020 Fee 2021 Fee
Ball Field Rental Rates
Type I - No Setup (e.g. Chalking, Lining, etc.) Sec. 62-45 $25.00
$25.00
Type II - With One (1) Setup (e.g. Chalking, Lining, etc.) Sec. 62-45 $75.00 $75.00
Type II - Per Additional Day Time Setup (e.g.
Chalking, Lining, etc.)
Sec. 62-45 $35.00 $35.00
Type II - Per Additional Night Time Setup (e.g.
Chalking, Lining, etc.)
Sec. 62-45 $65.00 $65.00
Bob Shelden Field Rental - per game - College
baseball - outside teams
$325.00
Bob Shelden Field Rental - per game - SDSU
College baseball
$250.00
Bob Shelden Field Rental - per game - Adult baseball $100.00
Bob Shelden Field Rental - per game – practice /
special events
$25.00
Bob Shelden Field Rental - per game – Penalty /
Deposit - seeds, tobacco, gum
$250.00
Contract Police Officer Security
Per Reserve Officer, Per Hour $35.00
Per Officer, Per Hour
$45.00
$50.00
False Security Alarm
First Call
$0.00
Second Call
$50.00
Third Call
$100.00
Progress Report. Jacob Meshke, Assistant City Manager, provided a progress report
highlighting the City’s activities/projects.
Adjourn. A motion was made by Council Member Tilton Byrne, seconded by Council
Member Wendell, that the meeting be adjourned at 7:29 p.m. The motion carried by a
unanimous vote.
CITY OF BROOKINGS
__________________________
ATTEST: Oepke G. Niemeyer, Mayor
__________________________
Bonnie Foster, City Clerk
City of Brookings
Staff Report
Brookings City & County
Government Center, 520
Third Street
Brookings, SD 57006
(605) 692-6281 phone
(605) 692-6907 fax
File #:RES 21-064,Version:1
Action on Resolution 21-064, a Resolution declaring surplus property for the City of Brookings.
Summary:
The City of Brookings is the owner of the described equipment stated within the attached Resolution.
This property is being declared surplus property according to SDCL Chapter 6-13. Council action is
required to declare these items surplus.
Fiscal Impact:
The proceeds from the sale of surplus property will be delivered to the City of Brookings Finance
Officer.
Recommendation:
Staff recommends approval.
Attachments:
Resolution
City of Brookings Printed on 8/5/2021Page 1 of 1
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Resolution 21-064
Declaring Surplus Property
Whereas, the City of Brookings is the owner of the following described equipment
formerly used at the City of Brookings:
Police Dept.
Bicycles: #2368 Black and Orange Townie; #2365 Green Schwinn Sierra; #2360 Pink
and Brown Huffy Panama Jack; #2359 Black Roadmaster Mountain Climber; #2352
Red and Black Bike, Serial #SL03432475; #2340 Black Hyper Spinner Pro, Serial
#TB18A134393; #2338 Black and Green Huffy, Serial #AH17A032187; #2320 Black
Hyper Kicker, Serial #DMYJ10E43716; #2310 Silver PK7; #2310 Purple and Pink Huffy
Alpine, Serial #AH16l032064; #2294 Black and Gray Hyper HAVOC; #2284 Pink
Seastar; #2268 Black and White Mongoose Excursion, Serial #R7926WM; #2265 Pink
and Silver Bike; #2256 Gray and Silver Roadmaster Quarry master, Serial
#SNFSD1BEE1469; #2252 Pink and Purple Raptor; #2240 Green and Black Genesis
Overkill, Serial #615050832; #2229 Maroon Redline, Serial #ACA14F001823; #2214
Green and White Pacific Scorpio, Serial #264015; #2213 Black Shimano Breakpoint;
#2209 Red and Gray Bike, Serial #LWJE030777; #2204 Pink and Black Crossfire Bike;
#2199 Silver and Red Stringer, Serial #BR07C85262; #2192 Blue Roadmaster Granite
Peak; #2189 Black Schwinn Hurricane, Serial #S3G24943; #2187 Blue and Red Bike,
Serial #98D927747; #2176 Black and Blue Diamond Back Outlook; #2166 Red
Roadmaster; #2165 Pink and White Huffy Trail Runner; #2162 White Roadmaster
Granite Peak, Serial #SNFSD19M81843; #2150 Black and Red Hyper, Serial #TT17
E22323; #2146 Black Huffy Nel Looso, Serial #SNHBC18D33345; #2122 Yellow and
Pink Scott Boulder Sport; #2121 Pink and White Mantis Heartbreaker, Serial
#IK1842570016; #2118 Black and White Shimano Ironhorse, Serial #13007218; #2116
Black Bike; #2115 Teal Huffy, Serial #A0063717; #2113 Black and Pink Hyper Shicker,
Serial #TZ19E030585; #2112 Black and Red Mongoose RX-75, Serial
#SNFSD08M05568; #2108 Black and Orange Mongoose Terrex; #2106 Black Bike,
Serial #HDM15J02743; #2105 Green Genesis Assault 24, Serial #GS72460.
Brookings Municipal Liquor Store: 22 Ridel Wine glasses.
Brookings Regional Landfill: approximately 16,000 brown yard waste bags.
Fire Dept.: Homelite XL-98 Multi-purpose saw, Serial #43650151; Elmo Model EV-
500Af Document Viewer, Serial #216319; Panasonic SA-HT800V DVD/VCR Home
theater system, Serial #G3TD10921 (Only has Subwoofer/no other speakers); RCA
Model F31665 Television, Serial #950223036 on a Bretford rolling stand.
Brookings Public Library: Eight (8) wooden reception chairs with green cushions; one
(1) adjustable height table (historical room); three (3) round tables; twelve (12) black
and orange chairs; two (2) red bistro tables; four (4) red and black chairs; two (2) large
metal display racks; one (1) 2010 Lenovo G550 (LEI) Laptop; one (1) 2012 ASUS All-in-
one PC (AWE5); one (1) 2013 HP EliteBook 8470p (HP 34); one (1) 2009 Epson TM
T881V Receipt Printer; one (1) 2010 Dell Latitude e5510 (D11); one (1) Viewsonic 19”
Monitor; one (1) Viewsonic 19” Monitor; one (1) NEC 17” monitor; one (1) Dell 17”
monitor; two (2) HP 19” monitors.
Whereas, in the best financial interest, it is the desire of the City of Brookings to dispose
of as surplus property; and
Whereas, the City Manager is hereby authorized to sell or dispose of said surplus
property.
Now, Therefore, Be It Resolved by the governing body of the City of Brookings, SD, that
this property be declared surplus property according to SDCL Chapter 6-13.
Passed and approved this 10th day of August, 2021.
CITY OF BROOKINGS
____________________________
ATTEST: Oepke G. Niemeyer, Mayor
___________________________
Bonnie Foster, City Clerk
City of Brookings
Staff Report
Brookings City & County
Government Center, 520
Third Street
Brookings, SD 57006
(605) 692-6281 phone
(605) 692-6907 fax
File #:RES 21-065,Version:1
Action on Resolution 21-065, a Resolution authorizing the City Manager to sign an On-Sale Liquor
Operating Agreement renewal for Nine, Inc., DBA 9 Bar Nightclub, Gus Theodosopoulous, owner,
303 Main Avenue, Brookings, South Dakota, legal description: Lot 2, Block 3, Original Plat Addition.
Summary:
The City of Brookings enters into On-Sale Liquor Operating Agreements for 10-year increments, with
a renewal at five years. The On-Sale Operating Agreement for Nine Inc., DBA 9 Bar Nightclub,
located at 303 Main Avenue, is at the 5-year renewal point of the 10-year Agreement. This
Resolution would allow the City Manager to enter into the remaining five (5) years of the Agreement,
effective through 2026.
Recommendation:
Staff recommends approval
Attachments:
Resolution
Operating Agreement
Map
City of Brookings Printed on 8/5/2021Page 1 of 1
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Resolution 21-065
On-Sale Liquor Operating Agreement Renewal
Nine, Inc., DBA 9 Bar Nightclub
Be It Resolved by the City of Brookings, South Dakota, that the City Council hereby
approves a Lease Agreement renewal for the On-Sale Operating Alcohol Management
Agreement for Liquor between the City of Brookings and Nine, Inc., DBA 9 Bar
Nightclub, Gus Theodosopoulos, owner, for the purpose of a liquor manager to operate
the on-sale establishment or business for and on behalf of the City of Brookings at 303
Main Avenue.
Be It Further Resolved that the City Manager be authorized to execute the Agreement
renewal on behalf of the City, which shall be for a period of five (5) years.
Passed and approved this 10th day of August, 2021.
CITY OF BROOKINGS
Oepke G. Niemeyer, Mayor
ATTEST:
Bonnie Foster, City Clerk
ON-SALE LIQUOR OPERATING AGREEMENT RENEWAL
Nine, Inc., DBA 9 Bar Nightclub
THIS AGREEMENT is made and entered into by and between the CITY OF
BROOKINGS, a municipal corporation of the State of South Dakota, hereinafter referred
to as the “City” and Gus Theodosopoulos, owner, Nine, Inc., DBA 9 Bar Nightclub,
hereinafter referred to as “Manager.” The City and Manager are referred to as the
“parties” herein.
WITNESSETH;
WHEREAS, the City has been issued an on-sale alcoholic beverage license and is
engaged in the sale of alcoholic beverages, and
WHEREAS, the City desires to enter into an Operating Agreement on a limited basis
with the Manager for the purpose of operating an on-sale establishment or business for
and on behalf of the City pursuant to law, a nd
WHEREAS, the Manager has offered to have facilities in which to operate said on -sale
establishment solely upon the premises hereinafter described.
NOW, THEREFORE IT IS MUTUALLY AGREED AS FOLLOWS:
I.
This Agreement is made and entered into on a limited basis between the parties to
allow the Manager to operate a retail on-sale premises, pursuant to and in accordance
with all of the terms and conditions of this Agreement, and in accordance with all State
laws and City Ordinances now in effect and as may be enacted in the future.
II.
The Manager shall be individually responsible for all operating expenses of said on -sale
establishment, including but not limited to utilities, taxes, insurance, and license fees, if
any.
The Manager shall furnish all equipment and fixtures necessary to operate the
establishment.
III.
The on-sale establishment shall be located upon real property in the City of Brookings,
South Dakota, described as:
Lot 2, Block 3, Original Plat Addition
City of Brookings, Brookings County, South Dakota
IV.
The Manager shall dispense only alcoholic beverages supplied by the Municipal Off -
Sale establishment.
V.
This Agreement shall be in full force and effect for a period of five (5) years, with the
Manager having the option and privilege of one five (5)-year extension, subject to the
approval of the governing body of the City of Brookings.
VI.
Either the Manager or the City may terminate this Agreement without cause upon ninety
(90) days written notice served by either party upon the oth er. The City reserves the
right to immediately suspend or revoke this Agreement without ninety (90) days written
notice for alcohol-related violations in accordance with the provisions of Resolution No.
25-88 or any amendments thereto or for any late paym ents for alcoholic beverages
supplied by the Municipal Off -Sale Establishment to be sold on the premises of
Manager.
VII.
The Manager shall receive as full compensation for its services rendered, the net profit
from the on-sale establishment under its management, and the sole profit to be derived
by the City shall be the markup hereinafter set forth on alcoholic beverages furnished by
the municipality to the Manager for the purposes of resale on the premises as above
described.
VIII.
The Manager shall pay in a timely manner to the City for all alcoholic beverages sold by
the City to the Manager for resale on the above-described premises, the actual cost of
distilled spirits and wine supplied by the City, plus eleven percent (11%) in excess of
such cost; the Manager shall pay to the City for all malt beverages sold by the City to
the Manager for resale on the above-described premises, the actual cost of malt
beverages, plus ten percent (10%) in excess of such cost. The actual cost shall include
cost price and transportation charges. The markup percentages provided in this
Agreement are subject to change by the City of Brookings. In the event markup
percentages are changed by Ordinance, then the markup percentages provided by City
Ordinance shall supercede the markup percentages provided herein. The Manager
further agrees that if either of the markup percentages shall be increased at any time by
the City, the Manager shall pay the markup as so increased.
IX.
A complete and detailed record shall be maintained by the City of all alcoholic
beverages supplied to the on-sale Manager and such alcoholic beverages so supplied
shall be evidenced by pre-numbered invoices prepared in triplicate showing the date,
quality, brand, size, and actual cost of such item, and such invoice shall bear the
signature of the authorized representative of the on -sale Manager or its authorized
representative. One copy thereof shall be retained by the Municipal off -sale
establishment, one copy shall be retained by the on-sale establishment, and one copy
shall be filed with the City Clerk. All copies shall be kept as permanent records and
made available for reference and audit purposes. The Manager also agrees to maintain
a complete record of all alcoholic beverages received from the City.
X.
In consideration of the covenants herein contained, the Manager agrees to pay the
CITY OF BROOKINGS, One Thousand Five Hundred, and no/100 Dollars ($1,500.00),
constituting the Annual License Fee on or by the 1st day of November of each year
thereafter as long as this agreement shall remain in force and effect. The payment of
the Annual Renewal License Fee will not extend the term of this Operating Agreement
beyond the term provided therein. The Manager further agrees that if the annual fee
shall be increased at any time by the legislature, the Manager shall pay the amount of
any such increase.
XI.
The Manager agrees to keep the premises in a neat, clean and attractive appearance,
and Manager further agrees to operate said on-sale establishment only on such days
and at such hours as permitted by state law and city ordinances.
XII.
The Manager shall have the right to return, at any time, alcoholic beverages received
from the City which are eligible to be returned, and to receive in return any deposit
made for such alcoholic beverages; in the event of termination of the business, all
unused alcoholic beverages, which may be resold without discount may be returned to
the City and the Manager shall be reimbursed for the cost of such alcoholic beverages.
XIII.
The Manager agrees to abide by the credit policies of the City and acknowledges, by
execution of this Agreement, receipt of a copy of the credit policies of the City. The City
reserves the right to change or terminate its credit policies at any time, but shall be
required to provide written notice to Manager prior to the effective date of the change or
termination date of the credit policies.
XIV.
The Manager agrees to furnish the City upon demand, evidence of payment of the
following:
A. All salaries of on-sale employees;
B. Social Security and withholding taxes on said employees;
C. Worker’s Compensation insurance premiums covering said employees;
D. Unemployment taxes on the payrolls of said employees;
E. General liability insurance protecting both the City and the Manager against
claims for injury or damages to persons or property, said policy to have
general liability limits of at least Five Hundred Thousand Dollars
($500,000.00) single limit, and One Million Dollars ($1,000,000.00) aggregate,
and a limitation of Fifty Thousand Dollars ($50,000.00) for damage to
property. The general liability insurance limits are subject to change and
Manager agrees to change limits of insurance if required by the City;
F. Rent and utility bills; and
G. Any and all miscellaneous expenses, including taxes.
XV.
The Manager agrees to observe all Federal and State laws and ordinances of the City
of Brookings.
XVI.
The City covenants and agrees to furnish the on -sale license to Manager pursuant to
the terms and conditions of this Operating Agreement and the terms and conditions of
the on-sale license.
XVII.
The City has the right to make inspections and investigations of the premises during the
hours of operation, and make audits and examinations of the records of the Manager
relating to the on-sale establishment.
XVIII.
It is further specifically understood and agreed that the waiver of the rights of the City
under this Agreement shall not constitute a continuous waiver, and any violation or
breach of the terms of this Agreement by the Manager shall constitute a separate and
distinct offense and grounds for immediate termination and revocation of this
Agreement.
XIX.
This agreement shall not be assignable to another person or location without the written
consent of the City.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement which is
effective this 10th day of August, 2021.
CITY OF BROOKINGS, South Dakota
A Municipal Corporation
By:
ATTEST: Paul Briseno, City Manager
Bonnie Foster, City Clerk
MANAGER
By:
B rook ings County, SD
Developed by
Par cel ID 404050030000200
Sec/T wp/Rng --
Pr oper ty Address 303 MAIN AVE
BROOKINGS
Alter nate ID n/a
Class NADC
Acr eage n/a
O w ner Addr ess THEODOSOPOULOS, GUS
303 MAIN AVE
BRO O KINGS SD 57006
Distr ict 4001
Br ief T ax Descr iption O RIGINAL PL AT ADDN, L OT 2, BL K 3 25 X 165
(Note: Not to be used on leg a l documents)
Date created: 8/4/2021
Last Data Uploa ded: 8/4/2021 8:06:34 AM
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City of Brookings
Staff Report
Brookings City & County
Government Center, 520
Third Street
Brookings, SD 57006
(605) 692-6281 phone
(605) 692-6907 fax
File #:RES 21-066,Version:1
Action on Resolution 21-066, a Resolution authorizing the City Manager to sign an On-Sale Liquor
Operating Agreement renewal for W&P of Brookings, LLC, dba Buffalo Wild Wings Bar & Grill, Todd
and Susan LaHaise, owner, 1801 6th Street. Legal description: A portion of Lot 6 (parcel 3), Village
Square Addition.
Summary:
The City of Brookings enters into On-Sale Liquor Operating Agreements for 10-year increments, with
a renewal at five years. The On-Sale Operating Agreement for W&P of Brookings, LLC dba Buffalo
Wild Wings Bar & Grill, located at 1801 6th Street, is at the 10-year renewal. This Resolution would
allow the City Manager to enter into the 10-year Agreement, with a renewal occurring at the 5-year
midpoint. This Agreement would be effective through 2026.
Recommendation:
Staff recommends approval
Attachments:
Resolution
Operating Agreement
Map
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Resolution 21-066
On-Sale Liquor Operating Agreement Renewal
W&P of Brookings, LLC, dba Buffalo Wild Wings Bar & Grill
Be It Resolved by the City of Brookings, South Dakota, that the City Council hereby
approves a Lease Agreement renewal for the On-Sale Operating Alcohol Management
Agreement for Liquor between the City of Brookings and W &P of Brookings, LLC, dba
Buffalo Wild Wings Bar & Grill, Todd and Susan LaHaise, owners, for the purpose of a
liquor manager to operate the on-sale establishment or business for and on behalf of
the City of Brookings at 1801 6th Street.
Be It Further Resolved that the City Manager be authorized to execute the Agreement
renewal on behalf of the City, which shall be for a period of five (5) years.
Passed and approved this 10th day of August, 2021.
CITY OF BROOKINGS
Oepke G. Neimeyer, Mayor
ATTEST:
Bonnie Foster, City Clerk
ON-SALE LIQUOR OPERATING AGREEMENT RENEWAL
W&P of Brookings, LLC., dba Buffalo Wild Wings Bar & Grill
THIS AGREEMENT is made and entered into by and between the CITY OF
BROOKINGS, a municipal corporation of the State of South Dakota, hereinafter referred
to as the “City” and Todd & Susan LaHaise, owners, W&P of Brookings, LLC, dba
Buffalo Wild Wings Bar & Grill, hereinafter referred to as “Manager.” The City and
Manager are referred to as the “parties” herein.
WITNESSETH;
WHEREAS, the City has been issued an on-sale alcoholic beverage license and is
engaged in the sale of alcoholic beverages, and
WHEREAS, the City desires to enter into an Operating Agreement on a limited basis
with the Manager for the purpose of operating an on-sale establishment or business for
and on behalf of the City pursuant to law, and
WHEREAS, the Manager has offered to have facilities in which to operate said on -sale
establishment solely upon the premises hereinafter described.
NOW, THEREFORE IT IS MUTUALLY AGREED AS FOLLOWS:
I.
This Agreement is made and entered into on a limited basis between the parties to
allow the Manager to operate a retail on-sale premises, pursuant to and in accordance
with all of the terms and conditions of this Agreement, and in accordance with all State
laws and City Ordinances now in effect and as may be enacted in the future.
II.
The Manager shall be individually responsible for all operating expenses of said on -sale
establishment, including but not limited to utilities, taxes, insurance, and lice nse fees, if
any.
The Manager shall furnish all equipment and fixtures necessary to operate the
establishment.
III.
The on-sale establishment shall be located upon real property in the City of Brookings,
South Dakota, described as:
A portion of Lot 6, Village Square Addition, City of Brookings, Brookings County,
South Dakota, also known as 1801 6th Street. (see Exhibit A constituting maps
depicting the interior and exterior spaces licensed for the service and
consumption of alcoholic beverages).
IV.
The Manager shall dispense only alcoholic beverages supplied by the Municipal Off -
Sale establishment.
V.
This Agreement shall be in full force and effect for a period of five (5) years, with the
Manager having the option and privilege of one five (5)-year extension, subject to the
approval of the governing body of the City of Brookings.
VI.
Either the Manager or the City may terminate this Agreement without cause upon ninety
(90) days written notice served by either party upon the other. The City reserv es the
right to immediately suspend or revoke this Agreement without ninety (90) days written
notice for alcohol-related violations in accordance with the provisions of Resolution No.
25-88 or any amendments thereto or for any late payments for alcoholic b everages
supplied by the Municipal Off -Sale Establishment to be sold on the premises of
Manager.
VII.
The Manager shall receive as full compensation for its services rendered, the net profit
from the on-sale establishment under its management, and the sole profit to be derived
by the City shall be the markup hereinafter set forth on alcoholic beverages furnished by
the municipality to the Manager for the purposes of resale on the premises as above
described.
VIII.
The Manager shall pay in a timely manner to the City for all alcoholic beverages sold by
the City to the Manager for resale on the above-described premises, the actual cost of
distilled spirits and wine supplied by the City, plus eleven percent (11%) in excess of
such cost; the Manager shall pay to the City for all malt beverages sold by the City to
the Manager for resale on the above-described premises, the actual cost of malt
beverages, plus ten percent (10%) in excess of such cost. The actual cost shall include
cost price and transportation charges. The markup percentages provided in this
Agreement are subject to change by the City of Brookings. In the event markup
percentages are changed by Ordinance, then the markup percentages provided by City
Ordinance shall supercede the markup percentages provided herein. The Manager
further agrees that if either of the markup percentages shall be increased at any time by
the City, the Manager shall pay the markup as so increased.
IX.
A complete and detailed record shall be maintained by the City of al l alcoholic
beverages supplied to the on-sale Manager and such alcoholic beverages so supplied
shall be evidenced by pre-numbered invoices prepared in triplicate showing the date,
quality, brand, size, and actual cost of such item, and such invoice shall b ear the
signature of the authorized representative of the on -sale Manager or its authorized
representative. One copy thereof shall be retained by the Municipal off -sale
establishment, one copy shall be retained by the on-sale establishment, and one copy
shall be filed with the City Clerk. All copies shall be kept as permanent records and
made available for reference and audit purposes. The Manager also agrees to maintain
a complete record of all alcoholic beverages received from the City.
X.
In consideration of the covenants herein contained, the Manager agrees to pay the
CITY OF BROOKINGS, One Thousand Five Hundred, and no/100 Dollars ($1,500.00),
constituting the Annual License Fee on or by the 1st day of November of each year
thereafter as long as this agreement shall remain in force and effect. The payment of
the Annual Renewal License Fee will not extend the term of this Operating Agreement
beyond the term provided therein. The Manager further agrees that if the annual fee
shall be increased at any time by the legislature, the Manager shall pay the amount of
any such increase.
XI.
The Manager agrees to keep the premises in a neat, clean and attractive appearance,
and Manager further agrees to operate said on-sale establishment only on such days
and at such hours as permitted by state law and city ordinances.
XII.
The Manager shall have the right to return, at any time, alcoholic beverages received
from the City which are eligible to be returned, and to receive in return any deposit
made for such alcoholic beverages; in the event of termination of the business, all
unused alcoholic beverages, which may be resold without discount may be returned to
the City and the Manager shall be reimbursed for the cost of such alcoholic beverages.
XIII.
The Manager agrees to abide by the credit policies of the City and acknowledges, by
execution of this Agreement, receipt of a copy of the credit policies of the City. The City
reserves the right to change or terminate its credit policies at any time, but shall be
required to provide written notice to Manager prior to the effective date of the change or
termination date of the credit policies.
XIV.
The Manager agrees to furnish the City upon demand, evidence of payment of the
following:
A. All salaries of on-sale employees;
B. Social Security and withholding taxes on said employees;
C. Worker’s Compensation insurance premiums covering said employees;
D. Unemployment taxes on the payrolls of said employees;
E. General liability insurance protecting both the City and the Manager against
claims for injury or damages to persons or property, said policy to have
general liability limits of at least Five Hundred Thousand Dollars
($500,000.00) single limit, and One Million Dollars ($1,000,000.00) aggregate,
and a limitation of Fifty Thousand Dollars ($50,000.00) for damage to
property. The general liability insurance limits are subject to change and
Manager agrees to change limits of insurance if required by the City;
F. Rent and utility bills; and
G. Any and all miscellaneous expenses, including taxes.
XV.
The Manager agrees to observe all Federal and State laws and ordinances of the City
of Brookings.
XVI.
The City covenants and agrees to furnish the on -sale license to Manager pursuant to
the terms and conditions of this Operating Agreement and the terms and conditions of
the on-sale license.
XVII.
The City has the right to make inspections and investigations of the premises during the
hours of operation, and make audits and examination s of the records of the Manager
relating to the on-sale establishment.
XVIII.
It is further specifically understood and agreed that the waiver of the rights of the City
under this Agreement shall not constitute a continuous waiver, and any violation or
breach of the terms of this Agreement by the Manager shall constitute a separate and
distinct offense and grounds for immediate termination and revocation of this
Agreement.
XIX.
This agreement shall not be assignable to another person or location without the written
consent of the City.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement which is
effective this 10th day of August, 2021.
CITY OF BROOKINGS, South Dakota
A Municipal Corporation
By:
ATTEST: Paul Briseno, City Manager
MANAGER
Bonnie Foster, City Clerk
By:
B rook ings County, SD
Developed by
Par cel ID 406330000000603
Sec/T wp/Rng --
Pr oper ty Address 1721 6TH ST
BROOKINGS
Alter nate ID n/a
Class NADC
Acr eag e n/a
Owner A ddr ess SIXTH STREET PARTNERS L IMITED
PARTNERSHIP
630 WESTERN AVE
BROOKINGS SD 57006
Distr ict 4001
Br ief T ax Descr iption VILLAGE SQUARE ADDN, L OT 6 EXC W 323.6' OF S 220' & EXC E 298.5' OF N 342.1' ADA PARC EL #3 166,768.06 SF
(Note: Not to be used on leg a l documents)
Date created: 8/4/2021
Last Data Uploa ded: 8/4/2021 8:06:34 AM
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City of Brookings
Staff Report
Brookings City & County
Government Center, 520
Third Street
Brookings, SD 57006
(605) 692-6281 phone
(605) 692-6907 fax
File #:ID 21-0390,Version:1
Action to hold an August 17, 2021 City Council Study Session.
Summary:
This action will add an August 17, 2021 City Council Study Session to the City Council meeting
calendar. This provides public notice of the change to the City Council meeting calendar.
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City of Brookings
Staff Report
Brookings City & County
Government Center, 520
Third Street
Brookings, SD 57006
(605) 692-6281 phone
(605) 692-6907 fax
File #:ID 21-0394,Version:1
Action on City Council Ex-Officio Appointment to the Brookings Municipal Utilities Board.
Summary:
Mayor Niemeyer recommends the following change in appointment to the Brookings Municipal
Utilities Board:
·Council Member Wayne Avery to replace Mayor Niemeyer
·Council Member Joey Collins
City of Brookings Printed on 8/5/2021Page 1 of 1
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City of Brookings
Staff Report
Brookings City & County
Government Center, 520
Third Street
Brookings, SD 57006
(605) 692-6281 phone
(605) 692-6907 fax
File #:ID 21-0384,Version:1
Proclamation: 100th Anniversary of the Medary Chapter of the Daughters of the American Revolution.
Summary:
A member of the Medary Chapter of the Daughters of the American Revolution will accept the
Proclamation.
Attachments:
Proclamation
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Mayoral Proclamation
CITY OF BROOKINGS, SOUTH DAKOTA
WHEREAS, the Medary Chapter of the Daughters of the American
Revolution (DAR), formally known as the John Kerr Chapter of the
National Society Daughters of the American Revolution, was organized
on March 7, 1921; and
WHEREAS, the Medary Chapter of DAR is celebrating their 100th year of
service to the community, state and country; and
WHEREAS, more than fifty Medary Chapter members represent hundreds of
patriots who dedicated their lives and fortunes for our freedom; and
WHEREAS, members volunteer their time and money to honor and support
veterans and current deployed military members; and
WHEREAS, the Medary Chapter DAR spends countless hours preserving
American History and encouraging observance of Constitution Week, Good
Citizens Awards and College Scholarships as well as many other civic,
environmental and educational concerns; and
WHEREAS, the Medary Chapter DAR has achieved longevity and success
because of the chapter’s hard work and commitment.
NOW, THEREFORE, BE IT RESOLVED, that I, Oepke G. Niemeyer, Mayor of the
City of Brookings, do hereby proclaim July 17, 2021 as:
MEDARY CHAPTER OF THE DAUGHTERS
OF THE AMERICAN REVOLUTION DAY
IN WITNESS WHEREOF, I have hereunto set my
hand, and caused to be affixed the Great Seal of
the City of Brookings, this 17th day of July, 2021.
____________________________
Oepke G. Niemeyer, Mayor
City of Brookings
Staff Report
Brookings City & County
Government Center, 520
Third Street
Brookings, SD 57006
(605) 692-6281 phone
(605) 692-6907 fax
File #:ID 21-0369,Version:1
Household Hazardous Waste Event
Summary:
Jake Meshke, Assistant City Manager, and Katie Stiegelmeier, Solid Waste Administrative Assistant,
will provide an update report highlighting the City’s Household Hazardous Waste Event scheduled for
August 21st.
Attachments:
Presentation
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Household Hazardous Waste Event Update Report
Solid Waste Division
Public Works
•August 21st, 2021
•8am –12pm
•Swiftel Center Parking Lot
•Hamlin, Deuel, Kingsbury, Brookings, Lake, Moody
County Residents
•Free with a recommended donation of a non-perishable
food item(s) to be donated to Brookings Food Pantry
•Veolia –3rd party to handle, transport, dispose
1st Annual Household Hazardous Waste Event
•Paint Exchange
‣Popular event but paint only
‣400 gallons of paint remaining after exchange in 2019
‣Restore temporarily not accepting opened cans of paint
•HHW Event
‣Dispose of aerosols, batteries, household cleaners, CFL bulbs,
automotive products, ant, roach, rodent killers, weed killers,
lighter fluids, oil based paint, latex paint, paint thinner or
strippers, and more
‣Veoila ensures proper packaging, transport, disposal
Paint Exchange vs. HHW Event
Why?
•Daily phone calls and questions on where to dispose of HHW
•No local outlet
•WHERE IS IT GOING?!
•Down the drain
•On the ground
•Storm sewers
•Regular trash
•Garages, sheds, basements
Why?
According to the EPA and the CDC, improper disposal
of household hazardous waste can pose risk to
•Sanitation workers
•Environment
•Septic tanks or wastewater treatment
•Children and pets
•Catch fire, react or explode
Solution
•Upgrade paint exchange to
HHW Collection Event
•Free
•Local drop-off
•Safe, environmentally
responsible disposal
WHAT WE DO IS BIGGER THAN US.
City of Brookings
Staff Report
Brookings City & County
Government Center, 520
Third Street
Brookings, SD 57006
(605) 692-6281 phone
(605) 692-6907 fax
File #:ID 21-0387,Version:1
2020 Annual Comprehensive Financial Report and Audit Summary
Summary:
Ashley Rentsch, Deputy Finance Manager, will present the 2020 Annual Comprehensive Financial
Report and Audit Summary to the City Council and members of the public.
Attachments:
Presentation
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Annual Report & Financial Statement AuditFiscal Year Ended December 31, 2020City of Brookings
Presentation OverviewAnnual Report 2020 Financial StatementsHighlightsFinancial Statement Audit & ResultsFinancial Report Access2
Above and Beyond The City of Brookings participates in the Government Financial Officers Association (GFOA) Certificate of Achievement for Excellence in Financial Reporting programAuditedIncludes all funds and component unitsContains a statistical section with economic and demographic informationReceived award for 2019 financial statements, one of only four SD municipalities to receive the award. Provides users with the most complete picture of financial positionDepartment of Legislative AuditState LegislatorsOther municipalitiesCreditorsGrantorsFinancial institutionsRating agencies3
Funds Overview 4GOVERNMENTAL FUNDS ‐23• GENERAL• SPECIAL REVENUE•DEBT SERVICE• CAPITAL PROJECTSPROPRIETARY FUNDS ‐12•ENTERPRISE FUNDS• INTERNAL SERVICE FUNDSFIDUCIARY FUNDS ‐2• FLEX BENEFITS•RURAL FIRE
Statement of Net Position5Capital Assets, 57%Restricted, 2%Unrestricted, 41%2020 Net PositionCapital AssetsRestrictedUnrestricted
Changes in Net Position60501001502002503003502011 2012 2013 2014 2015 2016 2017 2018 2019 2020Millions2011‐2020 Net PositionGovernmental ActivitiesBusiness‐Type Activities$123M$149M$304M$74MBusiness‐type activities net position more than doubled over past 10 years growing by $155MGovernmental funds have grown by $49MOverall up $204M or 91% since 2011
Statement of Activities7$170,153,976 40%$173,114,476 40%$83,717,757 20%CityBMUBHSRelative Net Position
2020 Financial HighlightsCOVID-19 ChallengesBudget & planned projects revised due to economic uncertaintiesPrioritized projects based on opportunities for local businesses & grant fundingBob Shelden Athletic ComplexAirport Apron ReconstructionVarious street and drainage projectsFire Dept. Indoor Training Facility8Local Government COVID Recovery FundFinance Team managed grant & maximized reimbursement opportunitiesPayroll PPE & other suppliesRemote work & communication equipmentSanitizing office spacesRealized $4.1M in total reimbursements$3.8M – City$192K – BMU$120K – BHS$16K – BATAGeneral Fund balance increased in 2020 by almost $4M
2020 Audit Overview & ResultsAudit ResultsNo internal control deficienciesNo instances of noncomplianceNo Material weaknessesSubmitted for GFOA Award ProgramBKD CPAs and Advisors of Lincoln, NE completed audit June 29, 2021• Conducted remotely ($8K savings) RFP for Auditing Services over the next 3 years• Council Recommendation in September9
Financial Report AccessCity Departments – Finance Department – Annual Comprehensive Financial Reports10
11Questions or Comments?Ashley RentschDeputy Finance Manager605‐697‐8652arentsch@cityofbrookings‐sd.govErick RangelCFO605‐697‐8640erangel@cityofbrookings‐sd.gov
City of Brookings
Staff Report
Brookings City & County
Government Center, 520
Third Street
Brookings, SD 57006
(605) 692-6281 phone
(605) 692-6907 fax
File #:ID 21-0389,Version:1
2nd Quarter 2021 CFO Report
Summary:
Chief Financial Officer, Erick Rangel, will present the 2nd Quarter Financial Report to the City Council
and members of the public
Attachments:
Report
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CFO’s Report
Q2 2021
City of Brookings
REVENUES FY2021 B Prorated
YTD 2021 B 2021 YTD A Δ $
F/(U)Δ%
Sales Tax:
1st Penny $6,904,449 $3,331,882 $3,629,459 $297,577 8.9%
2nd Penny $6,904,449 $3,331,415 $3,629,159 $297,744 8.9%
3rd Penny $825,000 $396,600 $473,106 $76,505 19.3%
BID (Pillow Tax)$170,000 $71,109 $93,546 $22,437 31.6%
Total $14,803,898 $7,131,007 $7,825,270 $694,263 9.7%
Property Tax:$3,513,073 $1,801,959 $1,951,730 $149,771 8.3%
Grand Total $18,316,971 $8,932,966 $9,777,000 $844,033 9.4%
2
2021 First Half Tax Revenue
Revenue Tax Collected vs LY vs BudgetRevenue Tax Collected vs LY vs Budget
Total tax collected was 9.4% above budget or $844K
Sales driven tax revenue was 8.6% higher than last year and 9.7% above budget or $694K
Last year’s figures include COVID-19 related impact, thus year over year comparison seem materially favorable
Our current budget has the following growth revenue factors vs last year
—1st & 2nd Penny + 5.3%
—3rd Penny or “Tourism” + 17.5%
—BID or “Hotel” + 25%
A Actuals Δ Variance B Budget
2021 2Q Tax Revenue & Other Income2021 2Q Tax Revenue & Other Income
Notes - Proration of tax revenue is based on average monthly historical timing of collections
- The sales tax reported period is for the previous month’s actual activity; thus, the reported numbers represent December’20 – May-21 economic activity
+9.7%+8.6%
3
2021 First Half Sales Tax Revenue by Industry
Continuing last quarter’s trend, Year over Year (YoY) declines in the Construction, Manufacturing and Transportation
industries have been offset by gains in the Wholesale Trade, Retail Trade, Services and Finance, Insurance and Real Estate
sectors
Category YTD YoY
A Agriculture, Forestry and Fishing 81,833 13.3%
C Construction 124,112 -31.2%
D Manufacturing 325,221 -16.6%
E Transportation, Communications,
Electric, Gas, and Sanitary Services 585,587 -14.3%
F Wholesale Trade 755,470 12.3%
G Retail Trade 4,728,576 13.3%
H Finance, Insurance & Real Estate 110,214 11.4%
I Services 1,093,015 2.6%
O Other 1,391 -65.5%
T Total 7,805,420 6.4%
Additional sales tax information can be found in the City’s Performance Management Dashboard through the following link
—https://cityofbrookings.app.envisio.com/corporate/performance_analytics/published/I4nIRE
4
2021 Remote Sellers* Tax Update
Over the last nine months, Remote Sellers Tax has accounted for 7.3% of total Sales Tax on average
This year, the tax revenues have ranged between $76K and $109K
7.0%7.6%
9.7%
6.0%7.0%
7.6%
8.3%
5.8%
7.0%
% Remote Sellers Tax as a percent of Sales Tax
*A remote seller is a business located in another state that lacks a physical presence in South Dakota but makes sales to South Dakota. This tax was formally implemented in South Dakota in
November 2018
EXPENDITURES:FY2021 B Prorated
YTD 2021 B 2020YTD A Δ $
F/(U)% Used Δ Revenue
$ F/(U)
Animal Control $168,660 67,525$ $50,218 $17,306 29.8%($109)
Aquatic Center $402,731 118,161$ $73,469 $44,692 18.2%$67,134
City Attorney $111,000 55,500$ $54,553 $947 49.1%$0
City Clerk $256,523 139,099$ $157,980 ($18,881)61.6%$8,393
City Manager $643,745 317,671$ $296,809 $20,862 46.1%$8
Community Development $858,237 437,083$ $383,189 $53,895 44.6%$22,450
County Reimbursement $387,400 254,354$ $90,204 $164,150 23.3%($40,824)
Finance $619,960 316,048$ $312,900 $3,148 50.5%($661)
Fire Department $797,643 398,916$ $357,290 $41,627 44.8%$13,882
Forestry $396,943 222,019$ $163,138 $58,881 41.1%($2,457)
Government Buildings $180,521 90,261$ $100,538 ($10,278)55.7%$0
Human Resources $468,931 213,013$ $184,912 $28,101 39.4%$1,930
Hydrant Rental $102,000 42,500$ $41,783 $717 41.0%$0
Ice Arena $504,727 225,386$ $241,033 ($15,646)47.8%($12,072)
IT $381,010 160,463$ $229,842 ($69,380)60.3%$0
Library $1,166,490 520,281$ $481,531 $38,750 41.3%$2,075
Mayor & Council $113,447 39,056$ $52,340 ($13,283)46.1%$0
Parks Department $1,524,603 703,397$ $683,862 $19,534 44.9%$9,100
Police Department $4,015,465 1,853,322$ $1,753,017 $100,306 43.7%($10,726)
Public Works $503,163 256,507$ $241,621 $14,885 48.0%$0
Recreation Department $476,509 226,390$ $185,710 $40,681 39.0%($18,501)
Street Department $2,411,572 1,243,179$ $1,041,249 $201,930 43.2%($9,958)
Subsidies/Appropriation $964,880 659,974$ $633,397 $26,577 65.6%$20,000
Non Departamental $413,272 191,435$ $76,643 $114,792 18.5%$459,567
Total $17,869,435 $8,751,540 $7,887,228 $864,312 44.1%$509,232
General FundGeneral Fund
5
2021 First Half Budget vs Actuals – General Fund
Total General Fund expense is at 44.1% of total
budget, which represents a $864K surplus vs
budget
A large part of this surplus is attributed to
timing of expenses vs last year in the Street
and City Hall Departments and vacancies in
the Police Department
Total revenues are $509K higher mainly driven
by timing of Landfill and Liquor transfers vs last
year. Revenues are at 48% of total budget
A Actuals Δ Variance B Budget
Notes - Proration of expenses and revenue are based on a 2yr
monthly historical timing average
EXPENDITURES:FY2021 B Prorated
YTD 2021 B 2021YTD A Δ $
F/(U)% Used
CIP $11,172,369 $2,126,803 $1,970,953 $155,850 17.6%
All Other*$26,353,518 $10,385,114 $7,015,977 $3,369,137 26.6%
Grand Total $55,395,322 $21,263,457 $16,874,158 $4,389,299 30.5%
6
2021 First Half Budget vs Actuals
Overall capital project expense is at 17.6% of budget with a total spend of $1.97M.
—Main initiatives funded to date are the Fire Department truck, Bond Payments and Equipment and Vehicles for the Streets,
Police and Parks & Rec Departments
Overall City spending is at 30.5% of budget
A Actuals Δ Variance B Budget
Capital Improvement Projects & OtherCapital Improvement Projects & Other
*All Other – Other Government , Special, Capital Projects and Enterprise Funds managed by the City.
Excludes Swiftel Center 2Q Financials
Capital Improvement Spend by ProjectCapital Improvement Spend by Project
Fire Dep Capital
Exp, $542,062 ,
27%
Street & Sidewalk
Improvements,
$325,947 , 17%
Bond Payments,
$429,508 , 22%
Vehicles and Equip
Capital Exp,
$275,992 , 14%
Other, $397,444 ,
20%
7
City Council Priority Project List
City Council Approved Projects*Cost
2021 Facility Improvements (Budget appropriation)1,400,000$
Total CC Approved Projects 1,400,000$
*Formally Adopted
Secondary Projects (IN priority order)Cost
2023 Facility Improvements 1,442,050$
2024 Facility Improvements 1,756,957$
2025 Facility Improvements 2,318,312$
Parks - Bike Trails 3,460,000$
Pay Down Debt -$
Total Unapproved Secondary Projects 8,977,319$
General Fund Reserves
Current Estimated Unassigned Liquid Assets Balance 14,080,969$
General Fund Reserve Balance of 15% 2,685,261$
Budget Stabilization Reserve of 5%895,087$
City Council Priority Funding Available Balance 10,500,621$
Priority Funding Available Balance After Approved 9,100,621$
Primary Projects (IN priority order)Cost
2022 Facility Improvements 1,100,000$
FD Training Tower 440,000$
Public Safety Center 7,000,000$
Housing Study 40,000$
Food Bank 300,000$
Downtown Master Plan 35,000$
Indoor Rec 850,000$
Total Unapproved Primary Projects 9,765,000$
Priority Funding after Unapproved Primary Projects (664,379)$
Priority Funding after Unapproved Secondary Projects (9,641,698)$
Desired Projects (NOT in priority order)Cost
PD - Training Simulator 300,000$
PD - K9 Vehicle 65,000$
PD - Marked Vehicle 62,000$
PD - Charget 52,000$
Streets - 3rd Street Sweeper 215,000$
Parks - Pickle ball Court 250,000$
Parks - Splashpark 250,000$
Parks - Outdoor Offices 30,000$
Parks - Larson Park Shelter 200,000$
Parks - Dog park - Sexauer 100,000$
Parks - Bridge to East Pond (DNP)30,000$
Parks - Blue Rink Dehumidification (LIA)160,000$
Parks - Floor Replacement (LIA)96,000$
Parks - Parks Maintenance Addition 600,000$
Parks - Larson Park Fountain 100,000$
Parks - Bridge to East Pond - Dakota Nature Park 30,000$
Parks - Shop Addition 600,000$
Swiftel - Outdoor Marquee (22nd Ave)41,500$
Re-Build East Lot - Larson Ice Arena 270,000$
East Lot - Swiftel Center 320,000$
Larson Park Pavilion 200,000$
Total Unapproved Desired Projects 3,971,500$
YTD Actual YTD Budget Actual vs
Budget F/(U)
Yr/Yr Actual
F/(U)
Annual
Budget
48,913 129,193 (80,281)1,838 196,590
78,583 88,850 (10,267)(4,642)196,850
156,162 342,738 (186,576)72,212 501,369
Contributed Income (1,500)0 (1,500)(262,386)0
125,459 415,237 (289,778)(98,750)625,766
107,625 340,825 (233,200)(49,299)523,417
18,255 167,730 (149,475)(35,930)231,554
252 540 (288)(2,582)1,080
533,748 1,485,113 (951,365)(379,539)2,276,626
(72,359)(206,028)133,669 61,710 (311,786)
(299,149)(388,587)89,438 73,321 (777,174)
(2,740)(10,472)7,732 14,465 (21,080)
(40,642)(233,694)193,052 95,340 (357,411)
(132,290)(194,924)62,634 33,712 (356,014)
(16,077)(32,770)16,693 2,241 (69,691)
(112,341)(166,925)54,584 (2,494)(339,118)
(56,328)(76,806)20,478 13,218 (149,648)
(22,329)(198,000)175,671 63,197 (286,490)
(3,332)(6,752)3,420 5,489 (13,504)
(757,586)(1,514,958)757,372 360,199 (2,681,916)
(223,838)(29,845)(193,993)(19,339)(405,290)Net Income:
Food & Beverage Expense
Expense Total:
Services & Operations Expense
Event Expense
General & Administrative Expense
Occupancy Expense
Cost of Goods Sold
Personnel Expense - Part-Time Event
Personnel Expense - Taxes, Benefits & Fees
Personnel Expense - Full-Time
Personnel Expense - Part-Time Support
Revenue Total:
Expense
Other Event Income
Food & Beverage Income - Concessions
Food & Beverage Income - Catering
Revenue
Reimbursed Event Expenses
Building Rent Income
Contractually Obligated Income
Other Income
82021 First Half Swiftel Center Profit and Loss Summary
COVID-19 materially impacted Center’s budgeted revenue
reducing it by 64% or $951K during the first half of this year
On the other hand, expenses were proactively reduced by
50% or $757K which included payroll and personnel
adjustments
Despite these efforts, the operation is running at a $193K
deficit vs budget
However, absent of another COVID wave, the remainder of
the year is expected to improve which should help offset part
of the current deficit
The Center’s new leadership will focus on managing costs as
well as aggressively implement revenue generating initiatives
to improve its financial position
Financial HighlightsFinancial Highlights
Spectra took over the Center’s management on August 1st
Given current year’s financial challenges, Spectra will
manage hiring of open positions to minimize the cost impact
Staff is ready to host Willie Nelson’s concert on August 11th
Venue Management TransitionVenue Management Transition
Profit and Loss SummaryProfit and Loss Summary
9
2021 Economic Update
The Conference Board forecasts that US Real GDP growth will rise to 6.6% in real terms. Looking further ahead, they forecast 3.8% of
economic growth in 2022 and 2.5% in 2023
—Growth drivers: consumer confidence, fully reopened economy, higher savings, stronger labor market, child tax credit
—Rapid acceleration in growth raises inflation expectations of 4.1% (PCE) by Q4
•Inflation will likely remain elevated into early 2022, but then begin to moderate
—Potential $1T infrastructure bill would impact economy until 2022
Locally, we believe that the forecasted US economic trend is likely to be as strong given current trends and also that all key growth
drivers hold true in our economy
—However, we remain monitoring three main factors that are currently being experienced in our market and that could
potentially slow growth: tight labor market, supply chain constrains and a potential COVID wave driven by the Delta variant
Source: https://www.conference-board.org/research/us-forecast PCE (Personal Consumption Expenses, includes food and Energy)
https://privatebank.jpmorgan.com/content/dam/jpm-wm-aem/documents/en/investing/mid-year-outlook-2021-lp3.pdf
https://www.bea.gov/data/gdp
https://brookingsedc.com/covid-19-dashboard/
THE CONFERENCE BOARD US ECONOMIC OUTLOOK
Percentage Change Annual Rates
2020 2021 2022 2023
Real GDP -3.5 6.6 3.8 2.5
Unemployment Rate (%)8.1 5.6 4.2
PCE Inflation (%Y/Y)1.2 3.3 2.5 1.9
THE CONFERENCE BOARD US ECONOMIC OUTLOOK
Percentage Change Annual Rates
2020 2021 2022 2023
Real GDP -3.5 6.6 3.8 2.5
Unemployment Rate (%)8.1 5.6 4.2
PCE Inflation (%Y/Y)1.2 3.3 2.5 1.9
10
American Rescue Plan (ARP) - Program Overview
$4.3 M
Allocation to the City of
Brookings
Allocation distribution will be
managed by the State
Distribution will be made in two
tranches at least 12 months apart
Eligible costs have to incur from
March 3, 2021 until December 31,
2024 (expendable by December
31, 2026)
Early guidance allows for the
following uses :
•Revenue loss
•Premium pay
•Investments in Water, Sewer,
and Broadband
•Public Health/Negative
Economic Impact
Program HighlightsProgram Highlights
11
American Rescue Plan (ARP) - City of Brookings Strategy
The City entered into an agreement with the Baker Tilly Advisory Firm with the goal
of maximizing grant opportunity and to assist with the grant application and
documentation processes
Per the Firm’s recommendation, the City will pursue all additional program
opportunities before accessing its $4.2M direct allocation
Federal Guidance has not been finalized for most of the additional program
opportunities. But in the meantime, City leadership is collaborating with the City’s
Economic Development Agencies and Utilities Unit to identify and prioritize
opportunities in line with the City’s Strategic Plan to “be ready”
At the same time, the City’s Finance department will work with the State to identify
the direct allocation opportunities and manage process to ensure compliance
12
2021 Moody’s Investors Service Credit Rating
The 2021 Moody’s Investors Service Issuer Comment Report for the City of
Brookings, qualified the City’s credit position as Aa3 Investment Grade rating
based on 2019’s performance
This rating categories our City’s credit position as high quality with key
favorable credit factors such as healthy financial position, affordable debt and
pension liabilities and a strong wealth and income profile
The City has maintained its Aa3 credit rating since 2018
13
Questions or Comments?
Erick Rangel
CFO
605-697-8640
erangel@cityofbrookings-sd.gov
https://cityofbrookings-sd.gov/200/Finance-Department
Please contact the City of Brooking’s Chief Financial Officer :Please contact the City of Brooking’s Chief Financial Officer :
14
Appendix
15
City Council Priority Project List – Facility Improvements Detail
2021 Facility Improvements - $1.4M
Library Repairs (HVAC, Cabinet Heater, Doors, Juice Bar Cabinet Removal and Wall Repair) -$765k
Police Emergency Repairs (HVAC) - $200k
Larson Park Parking Lot - $175k
Larson Ice Arena (HVAC, Flooring) - $100k
Southbrook Restrooms - $100k
Activity Center (Windows, Fire System – ADA Compliance) - $50k
HAC Pool Heater - $38k
2022 Facility Improvements - $1.1M
Library (Air Chiller, Windows, Ceiling Tiles) - $525k
PD (Carpeting, Electrical Upgrade, Lighting (may be reduced)) - $210k
Activity Center (Electrical Upgrades) - $145k
Fire (East Station Remodel, Lighting (may go away with LED conversion energy savings project)) - $110k
Swiftel (Doors, Restroom Upgrades), Nature Park (Resealing Building), Airport (Shed Doors/Frames) - $110k
City of Brookings
Staff Report
Brookings City & County
Government Center, 520
Third Street
Brookings, SD 57006
(605) 692-6281 phone
(605) 692-6907 fax
File #:ORD 21-026,Version:2
Second Reading and Action on Ordinance 21-026, an Ordinance Establishing Procedures for False
Security Alarms in the City of Brookings, South Dakota.
Summary:
The purpose of this ordinance is to encourage security alarm users to properly use security alarm
systems in order to reduce or eliminate false alarms. This ordinance governs alarm systems
intended to summon a law enforcement response, and establishes penalties for violations.
Recommendation:
Staff recommends approval.
Attachments:
Memo
Ordinance
City of Brookings Printed on 8/5/2021Page 1 of 1
powered by Legistar™
City Council Agenda Memo
From: David Erickson, Police Chief
Council Meeting: August 10, 2021
Subject: Ordinance Governing False Security Alarms
Person(s) Responsible: David Erickson, Police Chief
Summary:
The purpose of this ordinance is to encourage security alarm users to properly use
security alarm systems in order to reduce or eliminate false alarms. This ordinance
governs alarm systems intended to summon a law enforcement response, and
establishes penalties for violations.
Background:
The Brookings Police Department responded to 159 alarm calls in 2019 and 150 alarm
calls in 2020. These numbers are typical for annual number of alarm call responses by
the Brookings Police Department. Of the 150 calls in 2020, 149 were false alarms, of
which many of them originated repeatedly from the same businesses.
Each time the police department receives notification of a burglary alarm or a hold up
alarm, multiple officers respond to the scene using emergency lights and siren. There is
a given level of danger for our officers, as well as our citizens, when officers respond to
emergency calls. Officers spend up to 30 minutes on an alarm call when the business
is closed and they are waiting for a key holder to arrive. This ordinance is intended to
reduce the number of false alarms the Police Department receives in order to reduce
risk and reduce the number of wasted hours spent by officers and dispatchers.
When considering this ordinance, the Police Departme nt spoke with peer communities
in the area to determine if like ordinances were in place in those communities. It was
determined that Sioux Falls and Rapid City in South Dakota, Albert Lea and Bemidji,
MN, and Hays, KS all have ordinances governing false security alarms and have
associated fees/fines in varying amounts.
Item Details:
This ordinance will allow for penalty fees to be charged to a business or home owner
whenever law enforcement personnel have responded to two (2) or more false alarms
within a period of 12 calendar months. The fee will be established by res olution. The
recommended fees will mirror the current ordinance governing false fire alarms : $50 for
the second false alarm, and $100 per subsequent false alarms within a 12-month
period.
It was found that the vast majority of false alarms that prompted a police response were
from business security systems versus residential. The focus for public awareness will
be with the business community through the Chamber and through our city social media
and web page resources.
Information will be left with the business upon their first false alarm that lays out the
requirements of the ordinance along with suggestions to mitigate the oc currence of
further false alarms.
Legal Considerations:
City Attorney Steve Britzman drafted the ordinance.
Strategic Plan Consideration:
This ordinance will help increase the likelihood that officers are responding to legitimate
alarms therefore increasing safety of our community.
Safe, Inclusive, Connected Community– facility improvements, emergency mgmt.
planning, Master Plans, Studies, Volunteer Boards
Financial Consideration:
Cost to the city will be minimal, consisting of invoice expenses and collection of unpaid
fees. The intent of the ordinance is to reduce the number of false alarms and therefore
is not intended to be a large source of revenue. There will be potential in the first 12-
month period for an estimated $1,000 to $1,500 in revenues to be generated.
Options and Recommendation:
The City Council has the following options:
1. Approve as presented
2. Amend
3. Deny
4. Move the item to a study session
5. Do nothing
Staff recommends approval of the ordinance as presented.
Supporting Documents:
Ordinance
Ordinance 21-026
An Ordinance Establishing Procedures for False Security Alarms in the
City of Brookings, South Dakota.
Be It Ordained by the Governing Body of the City of Brookings, South Dakota, as
follows:
I.
Sec. 22-346. Purpose.
A. The purpose of this ordinance is to encourage security alarm users to properly
use security alarm systems in order to reduce or eliminate false alarms.
B. This ordinance governs alarm systems intended to summon a law enforcement
response, and establishes penalties for violatio ns.
Sec. 22-347. Administration.
The responsibility for administration of this chapter is vested with the chief of police or
their designee.
Sec. 22-348. Definitions.
The following words shall have the following meanings within this ordinance unless
otherwise specifically provided:
A. Act of God. An unusual, extraordinary, sudden and unexpected manifestation of
the forces of nature, which cannot be prevented by reasonable human care, skill
or foresight.
B. False Alarm. Any alarm signal or notification which elicits a response from any
duly authorized law enforcement personnel when the response is deemed to
have been made unnecessarily. A false alarm is one which results in a response
of a duly authorized law enforcement personnel when such response determines
that:
1. No criminal activity, attempted criminal activity or any emergency exists or
existed to justify any alarm or alarm signal;
2. The alarm or alarm signal was not caused by the act of a person over
whom the user or alarm agent had no control; and
3. The alarm or alarm signal was not caused by an act of God.
Sec. 22-349. Cancellation of alarm.
Alarm users may cancel a police response prior to an officer arriving and avoid a
penalty by calling the City’s dispatch office and advising that the alarm is false prior to
the arrival of a police officer.
Sec. 22-350. Fees for false alarms.
Whenever any duly authorized law enforcement personnel have responded to two
(2) false alarms within any period of 12 calendar months to the same premises in
response to any security alarm as provided for herein, the owner or occupant of the real
property on which the alarm system is installed shall pay a penalty fee to the city for
each false alarm after the first false alarm in any 12-month period. The fee shall be
established by Resolution, which shall be partial compensation for the costs incurred by
the Police Department in responding to the false alarm. Any invoice where it is asserted
the false alarm fee is incorrect may be appealed first to the Police Chief, then to the City
Manager.
The Police Chief may waive charges for any response made within 14 days after initial
installation of a security alarm, or when circumstances justify waiver or partial waiver of
fees.
II.
Any or all ordinances in conflict herewith are hereby rep ealed.
First Reading: July 27, 2021
Second Reading: August 10, 2021
Published: August 13, 2021
CITY OF BROOKINGS, SD
Oepke G. Niemeyer, Mayor
ATTEST:
Bonnie Foster, City Clerk
City of Brookings
Staff Report
Brookings City & County
Government Center, 520
Third Street
Brookings, SD 57006
(605) 692-6281 phone
(605) 692-6907 fax
File #:ORD 21-027,Version:2
Second Reading and Action on Ordinance 21-027, an Ordinance Establishing the Number of Medical
Cannabis Establishments in the City of Brookings, South Dakota.
Summary:
Ordinance establishing the number of medical cannabis dispensaries and medical cannabis
manufacturing, testing and cultivation facilities in the City of Brookings.
Recommendation:
Staff recommends approval.
Attachments:
Ordinance
SDCL 34-20G
Medical Cannabis Rules
City of Brookings Printed on 8/5/2021Page 1 of 1
powered by Legistar™
City Council Agenda Memo
From: Steve Britzman, City Attorney
Council Meeting: August 10, 2021
Subject: Authorized Number of Medical Cannabis Establishments
Ordinance/Second Reading
Person Responsible: Steve Britzman, City Attorney
Summary:
Request Second Reading of an ordinance establishing the number of medical cannabis
dispensaries and medical cannabis manufacturing, testing and cultivation facilities in the City of
Brookings.
Background:
This Agenda item for the City Council is a proposed Ordinance which provides the City Council
with the opportunity to limit the number of medical cannabis dispensaries and medical cannabis
product manufacturing facilities, medical cannabis testing facilities and medical cultivation
facilities in the City of Brookings.
Initiated Measure 26 (IM 26) is the name of the voter-initiated measure which authorized
medical cannabis in South Dakota. It was approved by the voters and is effective as of July 1st.
While there are 95 statutes which make up IM 26, there are probably 10 or fewer which relate to
the role of a city in the licensing of medical cannabis. These 10 statutes are important because
IM 26 provides that the Department of Health ultimately determines who receives a Registration
Certificate to operate medical cannabis dispensary and medical cannabis product manufacturing
facilities, medical cannabis testing facilities and medical cultivation facilities. These 4 types of
cannabis businesses are referred both in the law and in this memo as “establishments”.
Applicants for these establishments must submit to the Department of Health a lengthy
application covering a number of areas described later in this memo. One of the decision criteria
for the selection of the successful establishment is the input the Department of Health receives
from a city which has established a licensing procedure. Without a municipal licensing
procedure, the State will not have a mechanism to obtain the input from the city as to the city’s
preference for the successful establishment. Therefore, it is important to license establishments,
in part, so the city has the requisite information about the proposed medical cannabis
establishment so that appropriate input can be provided to the South Dakota Department of
Health. The purpose of this ordinance is to allow the City Council to determine the number of
both medical cannabis dispensaries, and to separately determine the number of other medical
cannabis establishments, which are identified in Section 3 of the proposed ordinance, and include
medical cannabis product manufacturing facilities, medical cannabis testing facilities and
medical cultivation facilities.
IM 26 only addresses medical cannabis, and this ordinance does not in any way address, license
or limit the number of recreational cannabis establishments. Also, IM 26 provides that “no local
government may prohibit a dispensary, either expressly or through the enactment of an ordinance
that makes the operation of the dispensary impracticable in the jurisdiction.” Therefore, at least
one dispensary would be required. My reading and the interpretation of several other City
Attorneys is that a city can prohibit medical cannabis product manufacturing facilities, medical
cannabis testing facilities and medical cultivation facilities, or can establish a limit of the number
of these establishments which may be registered to operate in Brookings. A city could allow one
or more of these establishments, or prohibit one or more and set a separate number for each of
the four (4) types of medical cannabis establishments.
Changes to Ordinance since First Reading:
This ordinance remains unchanged, and the Council certainly is not required to adopt this
ordinance since its only purpose is to establish limits of the number of cannabis
establishments in Brookings. Council discussion at the first reading indicated some
Council members may prefer limits while others may not prefer to establish limits on either
dispensaries or upon other types of cannabis establishments. Bill Efting, a former city
manager from Colorado who is providing consulting on the cannabis issues, will be
available at next week’s study session to answer questions based on his experience as a city
manager during the time medical and recreational cannabis laws were rolled out in
Colorado.
Discussion:
A medical cannabis dispensary is defined by IM 26 as “an entity registered with the department
[of Health] pursuant to [Chapter 34-20G] that acquires, possesses, stores, delivers, transfers,
transports, sells, supplies, or dispenses cannabis, cannabis products, paraphernalia, or related
supplies and educational materials to cardholders.” One might envision a medical cannabis
dispensary as a pharmacy-like facility, though in Colorado, most medical cannabis dispensaries
converted to recreational cannabis sales when recreational cannabis was legalized, based on
information provided by our consultant Bill Efting.
The ordinance also defines the other three types of cannabis establishments.
A Cannabis product manufacturing facility is an entity registered with the
department [of Health] that acquires, possesses, manufactures, delivers, transfers,
transports, supplies, or sells cannabis products to a medical cannabis dispensary.
A Cannabis testing facility or testing facility is an independent entity registered
with the department to analyze the safety and potency of cannabis.
A Cultivation facility is an entity registered with the department that acquires,
possesses, cultivates, delivers, transfers, transports, supplies or sells cannabis and
related supplies to a medical cannabis establishment.
Medical cannabis may only be sold to cardholders who have been issued valid registry
identification cards by the Department of Health. A cardholder may be a qualifying patient or a
designated caregiver of a qualifying patient. The Department of Health is required to issue valid
registry cards to qualifying patients by November 18, 2021, and issue rules pertaining to medical
cannabis by October 29, 2021. A rules hearing on these proposed rules is set for September 13,
2021 and I expect the results will be widely publicized. The draft rules were used to draft the
accompanying medical cannabis dispensary licensing ordinance. A copy of the draft rules
accompanies this Memo. The draft rules provide at Section 44:90:03:02 the operating
procedures for all of the following types of medical cannabis establishments:
1. Cannabis cultivation facilities;
2. Cannabis testing facilities;
3. Cannabis product manufacturing facilities;
4. Dispensaries.
The proposed medical cannabis dispensary licensing ordinance only addresses dispensaries, with
the other facilities to be the subject of a separate proposed licensing ordinance, which will be
introduced at a subsequent meeting, but will be very similar to the dispensary licensing
ordinance.
It is important to note that when the South Dakota Department of Health (the “Department”)
evaluates an application from a party who desires to operate a dispensary, as well as other types
of establishments in Brookings, the Administrative Rules will require of the Applicant, the
following:
1. A management plan identifying the individuals who will be in charge of day-to-day
operations;
2. A site plan which in part provides sufficient detail for the Department to determine
that the establishment is completely self-contained and does not have any access to
any other cannabis establishment or other business;
3. Operating Days and hours;
4. A workplace safety plan covering state and federal workplace safet y requirements;
5. Plans for compliance with all applicable safety standards contained in local
ordinance;
6. A security plan indicating all doors, windows, gates, exterior lights, alarm sensors,
cameras and how alarms and cameras will be monitored;
7. Any additional steps to ensure the safety of patrons and the community;
8. Plans for preventing the diversion of cannabis to non-cardholders;
9. Pre-employment screening procedures, including criminal background check; and
10. Processes for limiting access by unauthorized persons, including verification of
identity for all vendors and contractors, issuance of a visitor badge, and closely
monitoring all visitors.
Finally, IM 26 provides the following:
“If a local government has enacted a numerical limit on the number of medical cannabis
establishments in the locality and a greater number of applicants seek registration, the
department shall solicit and consider input from the local government as to its preference for
registration”. SDCL 34-20G-56. Accordingly, with a licensing ordinance in place in Brookings
and the number of dispensaries and other establishments limited to the number the City Council
sets by this ordinance, the City will have the data and information to respond to the Department
of Health should there be more Applicants for Medical Cannabis Dispensary and other
establishment licenses than the number the City Council establishes for the City of Brookings.
Financial Consideration:
IM 26 only permits fees which are reasonable. The State charges $5000 for a medical cannabis
Registration Certificate, and the Department of Health has a comprehensive document
submission process which likely justifies this fee. The City typically sets all fees by Resolution,
so there are not intended to be any fees set by this proposed Ordinance, and therefore I believe
licensing medical cannabis dispensaries and other establishments will have nominal financial
impacts. We do intend to propose reasonable fees be a separate resolution to cover the costs of
administering medical cannabis dispensaries, and fines for violations of the licensing ordinance.
Options and Recommendation:
The City Council has the following options:
1. Discuss, insert numerical limits and approve;
2. Table until a date following the Study Session;
3. Set the date for another reading to allow for more time to review.
Supporting Documentation:
1. The proposed Ordinance;
2. A copy of IM 26;
3. A copy of the draft Administrative Rules pertaining to Medical Cannabis.
Ordinance 21-027
An Ordinance Establishing the Number of
Medical Cannabis Establishments in the City of Brookings, South Dakota
Be It Ordained by the Governing Body of the City of Brookings, South Dakota, as
follows:
I.
Section 1. Definitions. The following words and phrases, when used in this ordinance,
shall have the meanings provided in this ordinance:
Medical cannabis establishment shall mean a cannabis cultivation facility, a
cannabis testing facility, a cannabis product manufacturing facility, or a cannabis
dispensary as those terms are defined in SDCL § 34-20G-1.
Medical cannabis dispensary or dispensary shall mean the entity registered
with the South Dakota Department of Health pursuant to SDCL Chapter 34 -20G
and licensed by the City pursuant to this ordinance that acquires, possesses,
stores, delivers, transfers, transports, sells, supplies, or dispenses cannabis,
cannabis products, paraphernalia, or related supplies and educational materials
to cardholders. Medical cannabis dispensary does not include a cultivation
facility, a cannabis testing facility, a cannabis product manufacturing facility, or a
recreational cannabis dispensary.
Cannabis product manufacturing facility shall mean an entity registered with
the department pursuant to this chapter that acquires, possesses, manufactures,
delivers, transfers, transports, supplies, or sells cannabis products to a medical
cannabis dispensary.
Cannabis testing facility or testing facility shall mean an independent entity
registered with the department pursuant to this chapter to analyze the safety and
potency of cannabis.
Cultivation facility shall mean an entity registered with the department pursuant
to this chapter that acquires, possesses, cultivates, delivers, transfers,
transports, supplies or sells cannabis and related supplies to a medical cannabis
establishment.
Section 2. Limitation of the number of medical cannabis dispensaries. Under the
authority granted by SDCL 34-20G-56, there shall be no more than _________ (____)
active medical cannabis dispensaries that may be registered by the State of South
Dakota to operate within the jurisdictional limits of the City of Brookings at any time. The
City of Brookings will provide the Department of Health with its preference for
registration based on applicants that have received a medical cannabis dispensary
license issued by the City of Brookings pursuant to this ordinance.
Section 3. Prohibition of medical cannabis product manufacturing facilities,
medical cannabis testing facilities and medical cultivation facilities. Under the
authority granted by SDCL 34-20G-56, there shall be no more than _________ (____)
active medical cannabis product manufacturing facilities, medical cannabis testing
facilities and medical cultivation facilities that may be registered by the State of South
Dakota to operate within the jurisdictional limits of the City of Brookings at any time. The
City of Brookings will provide the Department of Health with its preference for
registration based on applicants that have received medical cannabis product
manufacturing facilities license, medical cannabis testing facilities license and medical
cultivation facilities license issued by the City of Brookings pursuant to this ordinance
II.
Any or all ordinances in conflict herewith are hereby repealed.
First Reading: July 27, 2021
Second Reading: August 10, 2021
Published: August 13, 2021
CITY OF BROOKINGS, SD
Oepke G. Niemeyer, Mayor
ATTEST:
Bonnie Foster, City Clerk
CHAPTER 34-20G
MEDICAL CANNABIS
34-20G-1 Definitions.
34-20G-2 Cardholders not subject to arrest, prosecution, penalty, or discipline for certain conduct.
34-20G-3 Nonresident cardholders not subject to arrest, prosecution, penalty, or discipline for certain conduct.
34-20G-4 Presumption that qualifying patient or designated caregiver is engaged in the medical use of
cannabis--Presumption rebuttable.
34-20G-5 Practitioners not subject to arrest, prosecution, penalty, or discipline for certain conduct.
34-20G-6 Attorneys not subject to discipline for certain conduct.
34-20G-7 Persons not subject to arrest, prosecution, penalty, or discipline for certain conduct.
34-20G-8 Dispensaries and agents not subject to prosecution, search, seizure, penalty, or discipline for certain
conduct.
34-20G-9 Cultivation facilities and agents not subject to prosecution, search, seizure, penalty, or discipline for
certain conduct.
34-20G-10 Cannabis product manufacturing facilities and agents not subject to prosecution, search, seizure,
penalty, or discipline for certain conduct.
34-20G-11 Testing facilities and agents not subject to prosecution, search, seizure, penalty, or discipline for
certain conduct.
34-20G-12 Sale or donation of cannabis seeds to cultivation facility.
34-20G-13 Seizure or forfeiture of cannabis or related property.
34-20G-14 Possession of or application for registry identification card not grounds for search.
34-20G-15 Activity conducted in accordance with chapter lawful.
34-20G-16 Enforcement of federal law by state law enforcement officers.
34-20G-17 Contracts enforceable.
34-20G-18 Unauthorized conduct.
34-20G-19 Schools and landlords--Prohibited conduct.
34-20G-20 Qualifying patient not disqualified from medical care for cannabis use.
34-20G-21 Custody and visitation rights--Child neglect or endangerment.
34-20G-22 Employment and drug testing.
34-20G-23 Conflict with employer's obligations or benefits under federal law.
34-20G-24 Ingestion of cannabis at workplace--Working under the influence of cannabis.
34-20G-25 Schools, landlords, and employers not to be penalized.
34-20G-26 Petition to add serious medical condition or treatment to list of debilitating medical conditions--
Department consideration--Judicial review.
34-20G-27 Cost reimbursement, permission to smoke cannabis on property, and permission to cultivate on
rental property not required.
34-20G-28 Discipline for ingestion of cannabis at workplace and working under the influence of cannabis
permitted.
34-20G-29 Information required for issuance of registry identification cards--Fee.
34-20G-30 Submission of information by person responsible for medical decisions for qualifying patient.
34-20G-31 Department verification of information--Issuance of registry identification card--Verification
system.
34-20G-32 Background check of designated caregiver.
34-20G-33 Issuance of registry identification card to patient under age 18--Conditions.
34-20G-34 Grounds for denial or nonrenewal of qualifying patient registry identification card.
34-20G-35 Grounds for denial of application or nonrenewal of designated caregiver.
34-20G-36 Notice of reason for denial.
34-20G-37 Judicial review of application denial or nonrenewal.
34-20G-38 Temporary qualifying patient registry identification card.
34-20G-39 Temporary designated caregiver registry identification card.
34-20G-40 Availability of applications--Written certification as temporary registry identification card.
34-20G-41 Availability of applications--Temporary designated caregiver registry identification card.
34-20G-42 Contents of registry identification cards.
34-20G-43 Expiration of registry identification card.
34-20G-44 Confidential list of persons issued registry identification cards.
34-20G-45 Secure phone or web-based verification system.
34-20G-46 Required notifications to department.
34-20G-47 Notifications by designated caregiver.
34-20G-48 Issuance of new registry identification card following required notification to department.
34-20G-49 Card void upon notice to department that patient no longer qualifies--Disposal of cannabis.
34-20G-50 Theft or loss of cannabis--Notice to department.
34-20G-51 Medical purpose defense to prosecution involving cannabis.
34-20G-52 Proof of unavailability of defense to prosecution.
34-20G-53 Registry identification card not required to raise defense.
34-20G-54 Person using cannabis for medical purpose not subject to discipline or forfeiture.
34-20G-55 Application for medical cannabis establishment--Contents and conditions--Time for registration.
34-20G-56 Local government limitation on number of medical cannabis establishments.
34-20G-57 Renewal of medical cannabis establishment registration.
34-20G-58 Local government ordinances governing medical cannabis establishments.
34-20G-59 Local government prohibition of dispensaries not permitted.
34-20G-60 Local licensing of medical cannabis establishments--Fee.
34-20G-61 Criminal background check of medical cannabis establishment officers, employees, and volunteers.
34-20G-62 Employment restrictions on medical cannabis establishments.
34-20G-63 Medical cannabis establishment procedures for oversight and record keeping.
34-20G-64 Medical cannabis establishment security measures.
34-20G-65 Cultivation, harvesting, manufacturing, and packaging of cannabis.
34-20G-66 Production of cannabis products.
34-20G-67 Sharing office space and patient referrals to practitioners prohibited.
34-20G-68 Consumption of cannabis on medical cannabis establishment property prohibited.
34-20G-69 Inspection of medical cannabis establishments.
34-20G-70 Conditions for dispensing cannabis.
34-20G-71 Limitations on amount of cannabis dispensed.
34-20G-72 Promulgation of rules--Violation of required or prohibited action as misdemeanor.
34-20G-73 Civil penalty for failure to provide required notice.
34-20G-74 Intentional cannabis sale or transfer to unauthorized person by medical cannabis establishment or
agent as felony--Disqualification.
34-20G-75 Intentional cannabis sale or transfer by cardholder to unauthorized person as felony.
34-20G-76 False statement to law enforcement official about medical use of cannabis as misdemeanor.
34-20G-77 Knowing submission of false records or documents to certify medical cannabis establishment as
felony.
34-20G-78 Certain conduct of practitioner as misdemeanor.
34-20G-79 Breach of confidentiality of information as misdemeanor.
34-20G-80 Suspension or revocation of medical cannabis establishment registration certificate.
34-20G-81 Notice of suspension, revocation, or sanction--Notice of hearing--Duration of suspension.
34-20G-82 Permitted and prohibited conduct during suspension.
34-20G-83 Revocation of registry identification card for cannabis sale to unauthorized person--
Disqualification.
34-20G-84 Revocation of registry identification card for multiple or serious violations.
34-20G-85 Judicial review of revocation.
34-20G-86 Confidential data.
34-20G-87 Restrictions on data maintained by department.
34-20G-88 Permitted disclosure of data maintained by department.
34-20G-89 Restrictions on data maintained by medical cannabis establishments.
34-20G-90 Cardholder's request for department to confirm cardholder status to others.
34-20G-91 Destruction of unused media containing cardholder information.
34-20G-92 Oversight committee membership.
34-20G-93 Oversight committee duties.
34-20G-94 Annual report to the Legislature--Information excluded.
34-20G-95 Administration of medical cannabis to students.
34-20G-1.Definitions.
Terms used in this chapter mean:
(1) "Allowable amount of cannabis," means:
(a) Three ounces of cannabis or less;
(b) The quantity of cannabis products as established by rules promulgated by the department under
§ 34-20G-72;
(c) If the cardholder has a registry identification card allowing cultivation, three cannabis plants
minimum or as prescribed by physician; and
(d) If the cardholder has a registry identification card allowing cultivation, the amount of cannabis
and cannabis products that were produced from the cardholder's allowable plants, if the
cannabis and cannabis products are possessed at the same property where the plants were
cultivated;
(2) "Bona fide practitioner-patient relationship,":
(a) A practitioner and patient have a treatment or consulting relationship, during the course of
which the practitioner has completed an assessment of the patient's medical history and
current medical condition, including an appropriate in-person physical examination;
(b) The practitioner has consulted with the patient with respect to the patient's debilitating medical
condition; and
(c) The practitioner is available to or offers to provide follow-up care and treatment to the patient,
including patient examinations;
(3) "Cannabis products," any concentrated cannabis, cannabis extracts, and products that are infused with
cannabis or an extract thereof, and are intended for use or consumption by humans. The term
includes edible cannabis products, beverages, topical products, ointments, oils, and tinctures;
(4) "Cannabis product manufacturing facility," an entity registered with the department pursuant to this
chapter that acquires, possesses, manufactures, delivers, transfers, transports, supplies, or sells
cannabis products to a medical cannabis dispensary;
(5) "Cannabis testing facility" or "testing facility," an independent entity registered with the department
pursuant to this chapter to analyze the safety and potency of cannabis;
(6) "Cardholder," a qualifying patient or a designated caregiver who has been issued and possesses a valid
registry identification card;
(7) "Cultivation facility," an entity registered with the department pursuant to this chapter that acquires,
possesses, cultivates, delivers, transfers, transports, supplies, or sells cannabis and related supplies to
a medical cannabis establishment;
(8) "Debilitating medical condition,":
(a) A chronic or debilitating disease or medical condition or its treatment that produces one or more
of the following: cachexia or wasting syndrome; severe, debilitating pain; severe nausea;
seizures; or severe and persistent muscle spasms, including those characteristic of multiple
sclerosis; or
(b) Any other medical condition or its treatment added by the department, as provided for in § 34-
20G-26;
(9) "Department," means the Department of Health;
(10) "Designated caregiver," a person who:
(a) Is at least twenty-one years of age;
(b) Has agreed to assist with a qualifying patient's medical use of cannabis;
(c) Has not been convicted of a disqualifying felony offense; and
(d) Assists no more than five qualifying patients with the medical use of cannabis, unless the
designated caregiver's qualifying patients each reside in or are admitted to a health care
facility or residential care facility where the designated caregiver is employed;
(11) "Disqualifying felony offense," a violent crime that was classified as a felony in the jurisdiction where
the person was convicted;
(12) "Edible cannabis products," any product that:
(a) Contains or is infused with cannabis or an extract thereof;
(b) Is intended for human consumption by oral ingestion; and
(c) Is presented in the form of foodstuffs, beverages, extracts, oils, tinctures, or other similar
products;
(13) "Enclosed, locked facility," any closet, room, greenhouse, building, or other enclosed area that is
equipped with locks or other security devices that permit access only by a cardholder or a person
allowed to cultivate the plants. Two or more cardholders who reside in the same dwelling may share
one enclosed, locked facility for cultivation;
(14) "Medical cannabis" or "cannabis," marijuana as defined in § 22-42-1;
(15) "Medical cannabis dispensary" or "dispensary," an entity registered with the department pursuant to
this chapter that acquires, possesses, stores, delivers, transfers, transports, sells, supplies, or dispenses
cannabis, cannabis products, paraphernalia, or related supplies and educational materials to
cardholders;
(16) "Medical cannabis establishment," a cultivation facility, a cannabis testing facility, a cannabis product
manufacturing facility, or a dispensary;
(17) "Medical cannabis establishment agent," an owner, officer, board member, employee, or volunteer at a
medical cannabis establishment;
(18) "Medical use," includes the acquisition, administration, cultivation, manufacture, delivery, harvest,
possession, preparation, transfer, transportation, or use of cannabis or paraphernalia relating to the
administration of cannabis to treat or alleviate a registered qualifying patient's debilitating medical
condition or symptom associated with the patient's debilitating medical condition. The term does not
include:
(a) The cultivation of cannabis by a nonresident cardholder;
(b) The cultivation of cannabis by a cardholder who is not designated as being allowed to cultivate
on the cardholder's registry identification card; or
(c) The extraction of resin from cannabis by solvent extraction unless the extraction is done by a
cannabis product manufacturing facility;
(19) "Nonresident cardholder," a person who:
(a) Has been diagnosed with a debilitating medical condition, or is the parent, guardian,
conservator, or other person with authority to consent to the medical treatment of a person
who has been diagnosed with a debilitating medical condition;
(b) Is not a resident of this state or who has been a resident of this state for fewer than forty-five
days;
(c) Was issued a currently valid registry identification card or its equivalent by another state,
district, territory, commonwealth, insular possession of the United States, or country
recognized by the United States that allows the person to use cannabis for medical purposes in
the jurisdiction of issuance; and
(d) Has submitted any documentation required by the department, and has received confirmation of
registration;
(20) "Practitioner," a physician who is licensed with authority to prescribe drugs to humans. In relation to a
nonresident cardholder, the term means a person who is licensed with authority to prescribe drugs to
humans in the state of the patient's residence;
(21) "Qualifying patient," a person who has been diagnosed by a practitioner as having a debilitating
medical condition;
(22) "Registry identification card," a document issued by the department that identifies a person as a
registered qualifying patient or registered designated caregiver, or documentation that is deemed a
registry identification card pursuant to §§ 34-20G-29 to 34-20G-42, inclusive; and
(23) "Written certification," a document dated and signed by a practitioner, stating that in the practitioner's
professional opinion the patient is likely to receive therapeutic or palliative benefit from the medical
use of cannabis to treat or alleviate the patient's debilitating medical condition or symptom associated
with the debilitating medical condition. This document shall affirm that it is made in the course of a
bona fide practitioner-patient relationship and shall specify the qualifying patient's debilitating
medical condition.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-2.Cardholders not subject to arrest, prosecution, penalty, or discipline for certain conduct.
A cardholder is not subject to arrest, prosecution, or penalty of any kind, or denial of any right or
privilege, including any civil penalty or disciplinary action by a court or occupational or professional licensing
board or bureau, for:
(l) The medical use of cannabis in accordance with this chapter, if the cardholder does not possess more
than the allowable amount of cannabis, and if any cannabis plant is either cultivated in an enclosed,
locked facility or is being transported;
(2) Reimbursement by a registered qualifying patient to the patient's registered designated caregiver for
direct costs incurred by the registered designated caregiver for assisting with the registered qualifying
patient's medical use of cannabis;
(3) Transferring the cannabis to a testing facility;
(4) Compensating a dispensary or a testing facility for goods or services provided;
(5) Selling, transferring, or delivering cannabis seeds produced by the cardholder to a cultivation facility or
dispensary; or
(6) Offering or providing cannabis to a cardholder for a registered qualifying patient's medical use, to a
nonresident cardholder, or to a dispensary if nothing of value is transferred in return and the person
giving the cannabis does not knowingly cause the recipient to possess more than the allowable
amount of cannabis.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-3. Nonresident cardholders not subject to arrest, prosecution, penalty, or discipline for
certain conduct.
No nonresident cardholder is subject to arrest, prosecution, or penalty in any manner, or denied any right
or privilege, including civil penalty or disciplinary action by a business or occupational or professional licensing
board or entity, for transporting, purchasing, possessing, or using medical cannabis in accordance with this
chapter if the nonresident cardholder does not possess more than three ounces of cannabis and the quantity of
cannabis products established by rules promulgated by the department under § 34-20G-72.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-4. Presumption that qualifying patient or designated caregiver is engaged in the medical
use of cannabis--Presumption rebuttable.
There is a presumption that a qualifying patient or designated caregiver is engaged in the medical use of
cannabis in accordance with this chapter if the cardholder is in possession of a registry identification card and an
amount of cannabis that does not exceed the allowable amount of cannabis. The presumption may be rebutted by
evidence that conduct related to cannabis was not for the purpose of treating or alleviating a qualifying patient's
debilitating medical condition or symptom associated with the qualifying patient's debilitating medical condition
under this chapter.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-5. Practitioners not subject to arrest, prosecution, penalty, or discipline for certain
conduct.
No practitioner is subject to arrest, prosecution, or penalty of any kind, or denied any right or privilege,
including civil penalty or disciplinary action by the South Dakota Board of Medical and Osteopathic Examiners
or by any other occupational or professional licensing board or bureau, solely for providing written certifications
or for otherwise stating that, in the practitioner's professional opinion, a patient is likely to receive therapeutic or
palliative benefit from the medical use of cannabis to treat or alleviate the patient's serious or debilitating
medical condition or symptoms associated with the serious or debilitating medical condition, Nothing in this
chapter prevents a practitioner from being sanctioned for:
(1) Issuing a written certification to a patient with whom the practitioner does not have a bona fide
practitioner-patient relationship; or
(2) Failing to properly evaluate a patient's medical condition.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-6. Attorneys not subject to discipline for certain conduct.
No attorney is subject to disciplinary action by the State Bar of South Dakota or other professional
licensing association for providing legal assistance to a prospective or registered medical cannabis establishment
or other related to activity that is not subject to criminal penalties under law of this state.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-7. Persons not subject to arrest, prosecution, penalty, or discipline for certain conduct.
No person is subject to arrest, prosecution, or penalty of any kind, or may be denied any right or
privilege, including any civil penalty or disciplinary action by a court or occupational or professional licensing
board or bureau, for:
(1) Providing or selling cannabis paraphernalia to a cardholder, nonresident cardholder, or to a medical
cannabis establishment;
(2) Being in the presence or vicinity of the medical use of cannabis that is exempt from criminal or civil
penalty by this chapter;
(3) Allowing the person's property to be used for an activity that is exempt from criminal or civil penalty
by this chapter; or
(4) Assisting a registered qualifying patient with the act of using or administering cannabis.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-8. Dispensaries and agents not subject to prosecution, search, seizure, penalty, or discipline
for certain conduct.
No dispensary or a dispensary agent is subject to prosecution, search, or inspection, except by the
department pursuant to § 34-20G-69, seizure, or penalty in any manner; or may be denied any right or privilege,
including civil penalty or disciplinary action by a court or business licensing board or entity, for acting in
accordance with this chapter to:
(1) Possess, transport, or store cannabis or cannabis products;
(2) Deliver, transfer, or transport cannabis to a testing facility and compensate a testing facility for services
provided;
(3) Accept cannabis offered by a cardholder or nonresident cardholder if nothing of value is exchanged in
return;
(4) Purchase or otherwise acquire cannabis from a cultivation facility or dispensary, and cannabis products
from cannabis product manufacturing facility or dispensary; and
(5) Deliver, sell, supply, transfer, or transport cannabis, cannabis products, cannabis paraphernalia, or
related supplies or educational materials to a cardholder, nonresident cardholder, or dispensary.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-9. Cultivation facilities and agents not subject to prosecution, search, seizure, penalty, or
discipline for certain conduct.
No cultivation facility or a cultivation facility agent is subject to prosecution, search, or inspection,
except by the department pursuant to § 34-20G-69, seizure, or penalty of any kind, or may be denied any right or
privilege, including civil penalty or disciplinary action by a court or business licensing board or entity, for acting
in accordance with this chapter to:
(1) Possess, plant, propagate, cultivate, grow, harvest, produce, process, manufacture, compound, convert,
prepare, pack, repack, or store cannabis;
(2) Deliver, transfer, or transport cannabis to a testing facility and compensate a testing facility for services
provided;
(3) Accept cannabis offered by a cardholder or nonresident cardholder if nothing of value is exchanged in
return;
(4) Purchase or otherwise acquire cannabis from a cultivation facility;
(5) Purchase cannabis seeds from a cardholder, nonresident cardholder, or the equivalent of a medical
cannabis establishment that is registered in another jurisdiction; or
(6) Deliver, sell, supply, transfer, or transport cannabis, cannabis paraphernalia, or related supplies or
educational materials to a cultivation facility and dispensary.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-10. Cannabis product manufacturing facilities and agents not subject to prosecution,
search, seizure, penalty, or discipline for certain conduct.
No cannabis product manufacturing facility or a cannabis product manufacturing facility agent is subject
to prosecution, search, or inspection, except by the department pursuant to § 34-20G-69, seizure, or penalty of
any kind, or may be denied any right or privilege, including civil penalty or disciplinary action by a court or
business licensing board or entity, for acting in accordance with this chapter to:
(1) Purchase or otherwise acquire cannabis from cultivation facility, and cannabis products or cannabis
from a cannabis product manufacturing facility;
(2) Possess, produce, process, manufacture, compound, convert, prepare, pack, repack, and store cannabis
or cannabis products;
(3) Deliver, transfer, or transport cannabis, cannabis products, cannabis paraphernalia, or related supplies
or educational materials to a dispensary or cannabis product manufacturing facility;
(4) Deliver, transfer, or transport cannabis to testing facility and compensate testing facility for services
provided; or
(5) Deliver, sell, supply, transfer, or transport cannabis, cannabis products, cannabis paraphernalia, or
related supplies or educational materials to a cannabis product manufacturing facility or dispensary.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-11. Testing facilities and agents not subject to prosecution, search, seizure, penalty, or
discipline for certain conduct.
No testing facility or testing facility agent is subject to prosecution, search, or inspection, except by the
department pursuant to § 34-20G-69, seizure, or penalty in any manner, or may be denied any right or privilege,
including civil penalty or disciplinary action by a court or business licensing board or entity, for acting in
accordance with this chapter to:
(1) Acquire, possess, transport, and store cannabis or cannabis products obtained from a cardholder,
nonresident cardholder or medical cannabis establishment;
(2) Return the cannabis or cannabis products to a cardholder, nonresident cardholder, or medical cannabis
establishment from whom it was obtained;
(3) Test cannabis, including for potency, pesticides, mold, or contaminants; or
(4) Receive compensation for services under this section.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-12. Sale or donation of cannabis seeds to cultivation facility.
A cardholder, nonresident cardholder, or the equivalent of a medical cannabis establishment that is
registered in another jurisdiction may sell or donate cannabis seeds to a cultivation facility in this state.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-13. Seizure or forfeiture of cannabis or related property.
Any cannabis, cannabis product, cannabis paraphernalia, or other interest in or right to property that is
possessed, owned, or used in connection with the medical use of cannabis as allowed under this chapter, or acts
incidental to such use, may not be seized or forfeited. This chapter does not prevent the seizure or forfeiture of
cannabis exceeding the amount allowed under this chapter, or prevent seizure or forfeiture if the basis for the
action is unrelated to the cannabis that is possessed, manufactured, transferred, or used in accordance with this
chapter.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-14. Possession of or application for registry identification card not grounds for search.
Possession of, or application for, a registry identification card does not constitute probable cause or
reasonable suspicion, nor may it be used to support a search of the person or property of the person possessing or
applying for the registry identification card, or otherwise subject the person or property of the person to
inspection by any governmental agency.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-15. Activity conducted in accordance with chapter lawful.
For the purposes of state law, an activity related to medical cannabis is lawful as long as it is conducted
in accordance with this chapter.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-16. Enforcement of federal law by state law enforcement officers.
No law enforcement officer employed by an agency that receives state or local government funds may
expend any state or local resources, including the officer's time, to effect any arrest or seizure of cannabis, or
conduct any investigation, on the sole basis of activity the officer believes to constitute a violation of the federal
Controlled Substances Act, 21 U.S.C. § 801 et seq., if the officer has reason to believe that the activity is in
compliance with this chapter. No officer may expend any state or local resources, including the officer's time, to
provide any information or logistical support related to any activity to any federal law enforcement authority or
prosecuting entity.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-17. Contracts enforceable.
No contract entered into by a cardholder, a medical cannabis establishment, or medical cannabis
establishment agent, or by a person who allows property to be used for an activity that is exempt from state
criminal penalties by this chapter is unenforceable on the basis that activity related to cannabis is prohibited by
federal law.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-18. Unauthorized conduct.
This chapter does not authorize any person to engage in, and does not prevent the imposition of any civil,
criminal, or other penalty for engaging in, the following conduct:
(1) Undertaking any task under the influence of cannabis, when doing so would constitute negligence or
professional malpractice;
(2) Possessing cannabis or otherwise engaging in the medical use of cannabis in any correctional facility;
(3) Smoking cannabis:
(a) On any form of public transportation; or
(b) In any public place or any place that is open to the public;
(4) Operating, navigating, or being in actual physical control of any motor vehicle, aircraft, train, or
motorboat while under the influence of cannabis, except that a registered qualifying patient or
nonresident cardholder is not considered to be under the influence of cannabis solely because of the
presence of metabolites or components of cannabis that appear in insufficient concentration to cause
impairment.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-19. Schools and landlords--Prohibited conduct.
No school or landlord may refuse to enroll or lease to and may not otherwise penalize a person solely for
the person's status as a cardholder, unless failing to do so would violate federal law or regulations or cause the
school or landlord to lose a monetary or licensing-related benefit under federal law or regulation.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-20. Qualifying patient not disqualified from medical care for cannabis use.
For the purposes of medical care, including organ and tissue transplants, a registered qualifying patient's
use of cannabis in accordance with this chapter is considered the equivalent of the authorized use of any other
medication used at the discretion of a practitioner and does not constitute the use of an illicit substance or
otherwise disqualify a qualifying patient from needed medical care.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-21. Custody and visitation rights--Child neglect or endangerment.
No person may be denied custody of or visitation rights or parenting time with a minor solely for the
person's status as a cardholder, and there is no presumption of neglect or child endangerment for conduct
allowed under this chapter, unless the person's behavior creates an unreasonable danger to the safety of the
minor as established by clear and convincing evidence.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-22. Employment and drug testing.
Except as provided in this chapter, a registered qualifying patient who uses cannabis for a medical
purpose shall be afforded all the same rights under state and local law, as the person would be afforded if the
person were solely prescribed a pharmaceutical medication, as it pertains to:
(1) Any interaction with a person's employer;
(2) Drug testing by a person's employer; or
(3) Drug testing required by any state or local law, agency, or government official.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-23. Conflict with employer's obligations or benefits under federal law.
The rights provided by §§ 34-20G-19 to 34-20G-25, inclusive, do not apply to the extent that they
conflict with an employer's obligations under federal law or regulation or to the extent that they would disqualify
an employer from a monetary or licensing-related benefit under federal law or regulation.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-24. Ingestion of cannabis at workplace--Working under the influence of cannabis.
No employer is required to allow the ingestion of cannabis in any workplace or to allow any employee to
work while under the influence of cannabis. A registered qualifying patient may not be considered to be under
the influence of cannabis solely because of the presence of metabolites or components of cannabis that appear in
insufficient concentration to cause impairment.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-25. Schools, landlords, and employers not to be penalized.
No school, landlord, or employer may be penalized or denied any benefit under state law for enrolling,
leasing to, or employing a cardholder.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-26. Petition to add serious medical condition or treatment to list of debilitating medical
conditions--Department consideration--Judicial review.
Any resident of this state may petition the department to add a serious medical condition or treatment to
the list of debilitating medical conditions as defined by this chapter. The department shall consider a petition in
the manner required by rules promulgated by the department pursuant to this chapter, including public notice
and hearing. The department shall approve or deny a petition within one hundred eighty days of submission. The
approval or denial of any petition is a final decision of the department, subject to judicial review.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-27. Cost reimbursement, permission to smoke cannabis on property, and permission to
cultivate on rental property not required.
Nothing in this chapter requires:
(1) A government medical assistance program or private insurer to reimburse a person for costs associated
with the medical use of cannabis;
(2) Any person or establishment in lawful possession of property to allow a guest, client, customer, or other
visitor to smoke cannabis on or in that property; or
(3) A landlord to allow the cultivation of cannabis on the rental property.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-28. Discipline for ingestion of cannabis at workplace and working under the influence of
cannabis permitted.
Nothing in this chapter prohibits an employer from disciplining an employee for ingesting cannabis in
the workplace or for working while under the influence of cannabis.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-29. Information required for issuance of registry identification cards--Fee.
No later than November 18, 2021, the department shall issue registry identification cards to qualifying
patients who submit the following, in accordance with rules promulgated by the department:
(1) A written certification issued by a practitioner within ninety days immediately preceding the date of an
application;
(2) The application or renewal fee;
(3) The name, address, and date of birth of the qualifying patient, except that if the applicant is homeless,
no address is required;
(4) The name, address, and telephone number of the qualifying patient's practitioner;
(5) The name, address, and date of birth of the designated caregiver, or designated caregivers, chosen by
the qualifying patient;
(6) If more than one designated caregiver is designated at any given time, documentation demonstrating
that a greater number of designated caregivers are needed due to the patient's age or medical
condition;
(7) The name of no more than two dispensaries that the qualifying patient designates, if any; and
(8) If the qualifying patient designates a designated caregiver, a designation as to whether the qualifying
patient or designated caregiver will be allowed under state law to possess and cultivate cannabis
plants for the qualifying patient's medical use.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-30. Submission of information by person responsible for medical decisions for qualifying
patient.
If the qualifying patient is unable to submit the information required by § 34-20G-29 due to the person's
age or medical condition, the person responsible for making medical decisions for the qualifying patient may do
so on behalf of the qualifying patient.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-31. Department verification of information--Issuance of registry identification card--
Verification system.
Except as provided in § 34-20G-32, the department shall:
(1) Verify the information contained in an application or renewal submitted pursuant to this chapter and
approve or deny an application or renewal within fifteen days of receiving a completed application or
renewal application;
(2) Issue registry identification cards to a qualifying patient and to a qualifying patient's designated
caregivers, if any, within five days of approving the application or renewal. A designated caregiver
shall have a registry identification card for each of the qualifying patients; and
(3) Enter the registry identification number of any dispensary the patient designates into the verification
system.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-32. Background check of designated caregiver.
The department may conduct a background check of a designated caregiver in order to carry out the
provisions of § 34-20G-31.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-33. Issuance of registry identification card to patient under age 18--Conditions.
The department may not issue a registry identification card to a qualifying patient who is younger than
eighteen years of age unless:
(1) The qualifying patient's practitioner has explained the potential risks and benefits of the medical use of
cannabis to the custodial parent or legal guardian with responsibility for health care decisions for the
qualifying patient; and
(2) The custodial parent or legal guardian with responsibility for health care decisions for the qualifying
patient consents in writing to:
(a) Allow the qualifying patient's medical use of cannabis;
(b) Serve as the qualifying patient's designated caregiver; and
(c) Control the acquisition of the cannabis, the dosage, and the frequency of the medical use of
cannabis by the qualifying patient.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-34. Grounds for denial or nonrenewal of qualifying patient registry identification card.
The department may deny an application or renewal of a qualifying patient’s registry identification card
only if the applicant:
(1) Does not provide the required information, fee, or materials;
(2) Previously had a registry identification card revoked; or
(3) Provided false information.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-35. Grounds for denial of application or nonrenewal of designated caregiver.
The department may deny an application or renewal for a designated caregiver chosen by a qualifying
patient whose registry identification card was granted only if:
(l) The designated caregiver does not meet the requirements of a designated caregiver as defined in § 34-
20G-l;
(2) The applicant does not provide the information required;
(3) The designated caregiver previously had a registry identification card revoked; or
(4) The applicant or the designated caregiver provide false information.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-36. Notice of reason for denial.
The department shall give written notice to the qualifying patient of the reason for denying a registry
identification card to the qualifying patient or to the qualifying patient's designated caregiver.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-37. Judicial review of application denial or nonrenewal.
Denial of an application or renewal under § 34-20G-34 or 34-20G-35 is considered a final department
action, subject to judicial review.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-38. Temporary qualifying patient registry identification card.
Until a qualifying patient who has submitted an application and the required fee to the department
receives a registry identification card or a denial, a copy of the patient' s application, written certification, and
proof that the application was submitted to the department is deemed a registry identification card.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-39. Temporary designated caregiver registry identification card.
Until a designated caregiver whose qualifying patient has submitted an application and the required fee
receives a registry identification card or a denial, a copy of the qualifying patient's application, written
certification, and proof that the application was submitted to the department is deemed a registry identification
card.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-40. Availability of applications--Written certification as temporary registry identification
card.
Until twenty-five days after the department makes applications available, a valid, written certification
issued within the previous year shall be deemed a registry identification card for a qualifying patient.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-41. Availability of applications--Temporary designated caregiver registry identification
card.
Until twenty-five days after the department makes applications available, the following is considered a
designated caregiver registry identification card:
(1) A copy of a qualifying patient' s valid written certification issued within the previous year; and
(2) A signed affidavit attesting that the person has significant responsibility for managing the well-being of
the patient and that the person has been chosen to assist the qualifying patient.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-42. Contents of registry identification cards.
A registry identification card shall contain all of the following:
(1) The name of the cardholder;
(2) A designation of whether the cardholder is a qualifying patient or a designated caregiver;
(3) The date of issuance and expiration date of the registry identification card;
(4) A random ten-digit alphanumeric identification number, containing at least four numbers and at least
four letters, that is unique to the cardholder;
(5) If the cardholder is a designated caregiver, the random identification number of the qualifying patient
the designated caregiver will assist;
(6) A clear indication of whether the cardholder has been designated to cultivate cannabis plants for the
qualifying patient's medical use;
(7) A photograph of the cardholder; and
(8) The phone number or website address where the card can be verified.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-43. Expiration of registry identification card.
A registry identification card expires one year after the date of issue. Unless the practitioner states in the
written certification that the qualifying patient would benefit from cannabis until a specified earlier date, then the
registry identification card expires on that date.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-44. Confidential list of persons issued registry identification cards.
The department shall maintain a confidential list of any person to whom the department has issued a
registry identification card and the addresses, phone number, and registry identification number of each person.
The list may not be combined or linked in any manner with any other list or database, nor may it be used for any
purpose not provided for in this chapter.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-45. Secure phone or web-based verification system.
Within one hundred twenty days of July 1, 2021, the department shall establish a secure phone or web-
based verification system. The verification system shall allow law enforcement personnel and medical cannabis
establishments to enter a registry identification number and determine whether the number corresponds with a
current, valid registry identification card. The system may disclose only:
(1) Whether the identification card is valid;
(2) The name of the cardholder;
(3) Whether the cardholder is a qualifying patient or a designated caregiver;
(4) Whether the cardholder is permitted to cultivate cannabis plants;
(5) The registry identification number of any affiliated registered qualifying patient; and
(6) The registry identification of the qualifying patient's dispensary or dispensaries, if any.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-46. Required notifications to department.
The following notifications are required:
(1) A registered qualifying patient shall notify the department of any change in the applicant’s name or
address, or if the patient ceases to have a debilitating medical condition, within ten days of the
change;
(2) A registered designated caregiver shall notify the department of any change in the caregiver ’s name or
address, or if the caregiver becomes aware the qualifying patient passed away, within ten days of the
change;
(3) Before a registered qualifying patient changes a designated caregiver, the patient shall notify the
department;
(4) If a registered qualifying patient changes a preference as to who may cultivate cannabis for the patient,
the patient shall notify the department;
(5) If a cardholder loses a registry identification card, the cardholder shall notify the department within ten
days of becoming aware the card has been lost; and
(6) Before a registered qualifying patient changes a designated dispensary, the patient shall notify the
department.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-47. Notifications by designated caregiver.
Any notification that a registered qualifying patient is required to make under this chapter may be made
by the patient's designated caregiver if the qualifying patient is unable to make the notification due to age or
medical condition.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-48. Issuance of new registry identification card following required notification to
department.
If a cardholder notifies the department of any item listed in § 34-20G-46, but remains. eligible under this
chapter, the department shall issue the cardholder a new registry identification card with a new random ten-digit
alphanumeric identification number within ten days of receiving the updated information and a twenty dollar
fee. If the person notifying the department is a registered qualifying patient, the department shall also issue the
patient's registered designated caregiver, if any, a new registry identification card within ten days of receiving
the updated information.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-49. Card void upon notice to department that patient no longer qualifies--Disposal of
cannabis.
If the registered qualifying patient's certifying practitioner notifies the department in writing that the
registered qualifying patient has ceased to suffer from a debilitating medical condition or that the practitioner no
longer believes the patient would receive therapeutic or palliative benefit from the medical use of cannabis, the
card is void. However, the registered qualifying patient shall have fifteen days to dispose of or give away any
cannabis in the registered qualifying patient's possession.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-50. Theft or loss of cannabis--Notice to department.
A medical cannabis establishment shall notify the department within one business day of any theft or
significant loss of cannabis.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-51. Medical purpose defense to prosecution involving cannabis.
Except as provided in § 34-20G-18 and this section, a person may assert the medical purpose for using
cannabis as a defense to any prosecution involving cannabis, and such defense is presumed valid where the
evidence shows that:
(1) A practitioner has stated that, in the practitioner's professional opinion, after having completed a full
assessment of the person's medical history and current medical condition made in the course of a
bona fide practitioner-patient relationship, the patient has a debilitating medical condition and the
potential benefits of using cannabis for medical purposes would likely outweigh the health risks for
the person;
(2) The person was in possession of no more than three ounces of cannabis, the amount of cannabis
products allowed by department rules, six cannabis plants minimum or as prescribed by a physician,
and the cannabis produced by those plants;
(3) The person was engaged in the acquisition, possession, use, manufacture, cultivation, or transportation
of cannabis, paraphernalia, or both, relating to the administration of cannabis to treat or alleviate the
person's debilitating medical condition or symptoms associated with the person's debilitating medical
condition; and
(4) Any cultivation of cannabis and storage of more than three ounces of cannabis occurred in a secure
location that only the person asserting the defense could access.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-52. Proof of unavailability of defense to prosecution.
An affirmative defense and motion to dismiss shall fail if the prosecution proves that:
(1) The person had a registry identification card revoked for misconduct; or
(2) The purpose for the possession or cultivation of cannabis was not solely for palliative or therapeutic use
by the person with a debilitating medical condition who raised the defense.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-53. Registry identification card not required to raise defense.
A person is not required to possess a registry identification card to raise the affirmative defense set forth
in § 34-20G-51.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-54. Person using cannabis for medical purpose not subject to discipline or forfeiture.
If a person demonstrates the person's medical purpose for using cannabis pursuant to this chapter, except
as provided in § 34-20G-18, the person is not subject to the following for the person's use of cannabis for
medical purposes:
(1) Disciplinary action by an occupational or professional licensing board or bureau; or
(2) Forfeiture of any interest in or right to any property other than cannabis.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-55. Application for medical cannabis establishment--Contents and conditions--Time for
registration.
Not later than ninety days after receiving an application for a medical cannabis establishment, the
department shall register the prospective medical cannabis establishment and issue a registration certificate and a
random ten-digit alphanumeric identification number if all of the following conditions are satisfied:
(1) The prospective medical cannabis establishment has submitted all of the following:
(a) The application fee;
(b) An application, including:
(i) The legal name of the prospective medical cannabis establishment;
(ii) The physical address of the prospective medical cannabis establishment that is not
within one thousand feet of a public or private school existing before the date of the
medical cannabis establishment application;
(iii) The name and date of birth of each principal officer and board member of the proposed
medical cannabis establishment; and
(iv) Any additional information requested by the department;
(c) Operating procedures consistent with rules for oversight of the proposed medical cannabis
establishment, including procedures to ensure accurate record keeping and adequate security
measures;
(d) If the city or county where the proposed medical cannabis establishment would be located has
enacted zoning restrictions, a sworn statement certifying that the proposed medical cannabis
establishment does not violate the restrictions;
(e) If the city or county where the proposed medical cannabis establishment requires a local
registration, license, or permit, a copy of the registration, license, or permit;
(2) None of the principal officers or board members has served as a principal officer or board member for a
medical cannabis establishment that has had its registration certificate revoked;
(3) None of the principal officers or board members is under twenty-one years of age; and
(4) At least one principal officer is a resident of this state.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-56. Local government limitation on number of medical cannabis establishments.
If a local government has enacted a numerical limit on the number of medical cannabis establishments in
the locality and a greater number of applicants seek registration, the department shall solicit and consider input
from the local government as to its preference for registration.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-57. Renewal of medical cannabis establishment registration.
The department shall issue a renewal registration certificate within ten days of receipt of the prescribed
renewal application and renewal fee from a medical cannabis establishment if the establishment's registration
certificate is not under suspension and has not been revoked.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-58. Local government ordinances governing medical cannabis establishments.
A local government may enact an ordinance not in conflict with this chapter, governing the time, place,
manner, and number of medical cannabis establishments in the locality. A local government may establish civil
penalties for violation of an ordinance governing the time, place, and manner of a medical cannabis
establishment that may operate in the locality.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-59. Local government prohibition of dispensaries not permitted.
No local government may prohibit a dispensary, either expressly or through the enactment of an
ordinance that makes the operation of the dispensary impracticable in the jurisdiction.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-60. Local licensing of medical cannabis establishments--Fee.
A local government may require a medical cannabis establishment to obtain a local license, permit, or
registration to operate, and may charge a reasonable fee for the local license, permit, or registration.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-61. Criminal background check of medical cannabis establishment officers, employees, and
volunteers.
Each medical cannabis establishment shall conduct a background check into the criminal history of each
person seeking to become a principal officer, board member, agent, volunteer, or employee before the person
begins working at the medical cannabis establishment.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-62. Employment restrictions on medical cannabis establishments.
A medical cannabis establishment may not employ any person who:
(1) Was convicted of a disqualifying felony offense; or
(2) Is under twenty-one years of age.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-63. Medical cannabis establishment procedures for oversight and record keeping.
Each medical cannabis establishment shall have operating documents that include procedures for the
oversight of the medical cannabis establishment and procedures to ensure accurate record keeping.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-64. Medical cannabis establishment security measures.
A medical cannabis establishment shall implement appropriate security measures designed to deter and
prevent the theft of cannabis and unauthorized entrance into any area containing cannabis.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-65. Cultivation, harvesting, manufacturing, and packaging of cannabis.
All cultivation, harvesting, manufacturing and packaging of cannabis shall take place in a secure facility
at a physical address provided to the department during the registration process. The secure facility may only be
accessed by agents of the medical cannabis establishment, emergency personnel, and adults who are twenty-one
years of age and older and who are accompanied by a medical cannabis establishment agent.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-66. Production of cannabis products.
No medical cannabis establishment other than a cannabis product manufacturer may produce cannabis
concentrates, cannabis extractions, or other cannabis products.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-67. Sharing office space and patient referrals to practitioners prohibited.
A medical cannabis establishment may not share office space with or refer a patient to a practitioner.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-68. Consumption of cannabis on medical cannabis establishment property prohibited.
A medical cannabis establishment may not permit any person to consume cannabis on the property of a
medical cannabis establishment.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-69. Inspection of medical cannabis establishments.
A medical cannabis establishment is subject to inspection by the department during business hours.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-70. Conditions for dispensing cannabis.
Before cannabis may be dispensed to a cardholder or nonresident cardholder, a dispensary agent:
(1) Shall make a diligent effort to verify that the registry identification card or registration presented to the
dispensary is valid;
(2) Shall make a diligent effort to verify that the person presenting the documentation is the person
identified on the document presented to the dispensary agent;
(3) May not dispense an amount of cannabis to a person that would cause the person to possess more than
the allowable amount of cannabis; and
(4) Shall make a diligent effort to verify that the dispensary is the current dispensary that was designated
by the cardholder or nonresident cardholder.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-71. Limitations on amount of cannabis dispensed.
A dispensary may not dispense more than three ounces of cannabis to a nonresident cardholder or a
registered qualifying patient, directly or via a designated caregiver, in any fourteen-day period. A dispensary
shall ensure compliance with the limitation under this section by maintaining internal, confidential records that
include records specifying how much cannabis is dispensed to a nonresident cardholder or registered qualifying
patient and whether it is dispensed directly to a registered qualifying patient or to the designated caregiver.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-72. Promulgation of rules--Violation of required or prohibited action as misdemeanor.
Not later than October 29, 2021, the department shall promulgate rules pursuant to chapter 1-26:
(1) Governing the manner in which the department shall consider petitions from the public to add a
debilitating medical condition or treatment to the list of debilitating medical conditions as defined by
this chapter, including public notice of and an opportunity to comment in public hearings on the
petitions;
(2) Establishing the form and content of registration and renewal applications submitted under this chapter;
(3) Establishing a system to numerically score competing medical cannabis establishment applicants, in
cases where more applicants apply than are allowed by the local government, that includes analysis
of:
(a) The preference of the local government;
(b) In the case of dispensaries, the suitability of the proposed location and its accessibility for
patients;
(c) The character, veracity, background, qualifications, and relevant experience of principal officers
and board members; and
(d) The business plan proposed by the applicant, that in the case of a cultivation facility or
dispensary shall include the ability to maintain an adequate supply of cannabis, plans to
ensure safety and security of patrons and the community, procedures to be used to prevent
diversion, and any plan for making cannabis available to low-income registered qualifying
patients;
(4) Governing the manner in which the department shall consider applications for and renewals of registry
identification cards, that may include creating a standardized written certification form;
(5) Governing medical cannabis establishments to ensure the health and safety of qualifying patients and
prevent diversion and theft without imposing an undue burden or compromising the confidentiality of
a cardholder, including:
(a) Oversight requirements;
(b) Record-keeping requirements;
(c) Security requirements, including lighting, physical security, and alarm requirements;
(d) Health and safety regulations, including restrictions on the use of pesticides that are injurious to
human health;
(e) Standards for the manufacture of cannabis products and both the indoor and outdoor cultivation
of cannabis by a cultivation facility;
(f) Requirements for the transportation and storage of cannabis by a medical cannabis
establishment;
(g) Employment and training requirements, including requiring that each medical cannabis
establishment create an identification badge for each agent;
(h) Standards for the safe manufacture of cannabis products, including extracts and concentrates;
(i) Restrictions on the advertising, signage, and display of medical cannabis, provided that the
restrictions may not prevent appropriate signs on the property of a dispensary, listings in
business directories including phone books, listings in marijuana-related or medical
publications, or the sponsorship of health or not-for-profit charity or advocacy events;
(j) Requirements and procedures for the safe and accurate packaging and labeling of medical
cannabis; and
(k) Certification standards for testing facilities, including requirements for equipment and
qualifications for personnel;
(6) Establishing procedures for suspending or terminating the registration certificates or registry
identification cards of cardholders and medical cannabis establishments that commit multiple or
serious violations of this chapter;
(7) Establishing labeling requirements for cannabis and cannabis products, including requiring cannabis
product labels to include the following:
(a) The length of time it typically takes for a product to take effect;
(b) Disclosing ingredients and possible allergens;
(c) A nutritional fact panel; and
(d) Requiring that edible cannabis products be clearly identifiable, when practicable, with a
standard symbol indicating that it contains cannabis;
(8) Establishing procedures for the registration of nonresident cardholders and the cardholder's designation
of no more than two dispensaries, which shall require the submission of:
(a) A practitioner's statement confirming that the patient has a debilitating medical condition; and
(b) Documentation demonstrating that the nonresident cardholder is allowed to possess cannabis or
cannabis preparations in the jurisdiction where the nonresident cardholder resides;
(9) Establishing the amount of cannabis products, including the amount of concentrated cannabis, each
cardholder and nonresident cardholder may possess; and
(10) Establishing reasonable application and renewal fees for registry identification cards and registration
certificates, according to the following:
(a) Application fees for medical cannabis establishments may not exceed five thousand dollars,
with this upper limit adjusted annually for inflation;
(b) The total fees collected shall generate revenues sufficient to offset all expenses of implementing
and administering this chapter;
(c) A sliding scale of patient application and renewal fees based upon a qualifying patient's
household income;
(d) The fees charged to qualifying patients, nonresident cardholders, and caregivers shall be no
greater than the costs of processing the application and issuing a registry identification card or
registration; and
(e) The department may accept donations from private sources to reduce application and renewal
fees.
A violation of a required or prohibited action under any rule authorized by this section is a Class 2
misdemeanor.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-73. Civil penalty for failure to provide required notice.
A cardholder or medical cannabis establishment who fails to provide a notice required by this chapter is
subject to a civil penalty of no more than one hundred fifty dollars. Any civil penalty collected shall be
deposited in the state general fund.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-74. Intentional cannabis sale or transfer to unauthorized person by medical cannabis
establishment or agent as felony--Disqualification.
In addition to any other penalty under law, a medical cannabis establishment or an agent of a medical
cannabis establishment who intentionally sells or otherwise transfers cannabis in exchange for anything of value
to a person other than a cardholder, a nonresident cardholder, or to a medical cannabis establishment or its agent
is guilty of a Class 6 felony. A person convicted under this section may not continue to be affiliated with the
medical cannabis establishment and is disqualified from any future affiliation with any medical cannabis
establishment under this chapter.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-75. Intentional cannabis sale or transfer by cardholder to unauthorized person as felony.
In addition to any other penalty under law, a cardholder or nonresident cardholder who intentionally sells
or otherwise transfers cannabis in exchange for anything of value to a person other than a cardholder, a
nonresident cardholder, or to a medical cannabis establishment or its agent is guilty of a Class 6 felony.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-76. False statement to law enforcement official about medical use of cannabis as
misdemeanor.
A person who intentionally makes a false statement to a law enforcement official about any fact or
circumstance relating to the medical use of cannabis to avoid arrest or prosecution is guilty of a Class 2
misdemeanor. The penalty is in addition to any other penalty that may apply for making a false statement or for
the possession, cultivation, or sale of cannabis not protected by this chapter. If a person convicted of violating
this section is a cardholder, the person is disqualified from being a cardholder under this chapter.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-77. Knowing submission of false records or documents to certify medical cannabis
establishment as felony.
A person who knowingly submits false records or documentation required by the department to certify a
medical cannabis establishment under this chapter is guilty of Class 6 felony.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-78. Certain conduct of practitioner as misdemeanor.
A practitioner who knowingly refers patients to a medical cannabis establishment or to a designated
caregiver, who advertises in a medical cannabis establishment, or who issues written certifications while holding
a financial interest in a medical cannabis establishment is guilty of a Class 2 misdemeanor.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-79. Breach of confidentiality of information as misdemeanor.
It is a Class 2 misdemeanor for any person, including an employee or official of the department or
another state agency or local government, to breach the confidentiality of information obtained under this
chapter.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-80. Suspension or revocation of medical cannabis establishment registration certificate.
The department may on its own motion or on complaint, after investigation and opportunity for a public
hearing at which the medical cannabis establishment has been afforded an opportunity to be heard, suspend or
revoke a registration certificate for multiple negligent or knowing violations or for a serious and knowing
violation by the registrant or any of its agents of this chapter.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-81. Notice of suspension, revocation, or sanction--Notice of hearing--Duration of
suspension.
The department shall provide notice of suspension, revocation, fine, or other sanction, as well as the
required notice of the hearing, by mailing the same in writing to the medical cannabis establishment at the
address on the registration certificate. A suspension may not be for a longer period than six months.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-82. Permitted and prohibited conduct during suspension.
A medical cannabis establishment may continue to possess cannabis during a suspension, but it may not
dispense, transfer, or sell cannabis. A cultivation facility may continue to cultivate and possess cannabis plants
during a suspension, but it may not dispense, transfer, or sell cannabis.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-83. Revocation of registry identification card for cannabis sale to unauthorized person--
Disqualification.
The department shall immediately revoke the registry identification card of any cardholder who sells
cannabis to a person who is not allowed to possess cannabis for medical purposes under this chapter, and the
cardholder is disqualified from being a cardholder under this chapter.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-84. Revocation of registry identification card for multiple or serious violations.
The department may revoke the registry identification card of any cardholder who knowingly commits
multiple unintentional violations or a serious knowing violation of this chapter.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-85. Judicial review of revocation.
Revocation under § 34-20G-80 is a final decision of the department subject to judicial review.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-86. Confidential data.
Data in a registration application and supporting data submitted by a qualifying patient, designated
caregiver, nonresident cardholder or medical cannabis establishment, including data on designated caregiver or
practitioner, is private data that is confidential.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-87. Restrictions on data maintained by department.
Data kept or maintained by the department may not be used for any purpose not provided for in this
chapter and may not be combined or linked in any manner with any other list or database.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-88. Permitted disclosure of data maintained by department.
Data kept or maintained by the department may be disclosed solely for:
(1) The verification of a registration certificate or registry identification card pursuant to this chapter;
(2) Submission of the annual report required by this chapter;
(3) Notification of state or local law enforcement of an apparent criminal violation of this chapter;
(4) Notification of state and local law enforcement about falsified or fraudulent information submitted for
the purpose of obtaining or renewing a registry identification card; or
(5) Notification of the South Dakota Board of Medical and Osteopathic Examiners if there is reason to
believe that a practitioner provided a written certification and the department has reason to believe
the practitioner otherwise violated the standard of care for evaluating a medical condition.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-89. Restrictions on data maintained by medical cannabis establishments.
Any information kept or maintained by a medical cannabis establishment may only identify a cardholder
by registry identification number and may not contain names or other personal identifying information.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-90. Cardholder's request for department to confirm cardholder status to others.
At the cardholder's request, the department may confirm the cardholder's status as a registered qualifying
patient or a registered designated caregiver to a third party, such as a landlord, school, medical professional, or
court.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-91. Destruction of unused media containing cardholder information.
Any department hard drive or other data-recording media that is no longer in use and that contains
cardholder information shall be destroyed.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-92. Oversight committee membership.
The Executive Board of the Legislative Research Council shall appoint an oversight committee
comprised of: one member of the House of Representatives, one member of the Senate, one Department of
Criminal Investigation agent, one staff member from the Office of the Attorney General, two representatives of
law enforcement, one representative from the department, one practitioner with experience in medical cannabis
issues, one nurse, one board member or principal officer of a cannabis testing facility, one person with
experience in policy development or implementation in the field of medical cannabis, and three qualifying
patients.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-93. Oversight committee duties.
The oversight committee shall meet at least two times per year for the purpose of evaluating and making
recommendations to the Legislature and the department regarding:
(1) The ability of qualifying patients in all areas of the state to obtain timely access to high-quality medical
cannabis;
(2) The effectiveness of the dispensaries and cultivation facilities, individually and together, in serving the
needs of qualifying patients, including the provision of educational and support services by
dispensaries, the reasonableness of their prices, whether they are generating any complaints or
security problems, and the sufficiency of the number operating to serve the state's registered
qualifying patients;
(3) The effectiveness of the cannabis testing facilities, including whether a sufficient number are operating;
(4) The sufficiency of the regulatory and security safeguards contained in this chapter and adopted by the
department to ensure that access to and use of cannabis cultivated is provided only to cardholders;
(5) Any recommended additions or revisions to the department regulations or this chapter, including
relating to security, safe handling, labeling, and nomenclature; and
(6) Any research studies regarding health effects of medical cannabis for patients.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-94. Annual report to the Legislature--Information excluded.
The department shall report annually to the Legislature on the number of applications for registry
identification cards received, the number of qualifying patients and designated caregivers approved, the number
of registry identification cards revoked, the number of each type of medical cannabis establishment registered,
and the expenses incurred and revenues generated from the medical cannabis program. The department may not
include identifying information on a qualifying patient, designated caregiver, or practitioner in the report.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-95. Administration of medical cannabis to students.
The Department of Education and the department shall establish policy to allow students who are
medical cannabis cardholders to have their medicine administered in school in accordance with their physician's
recommendation. This policy shall be implemented the first day of the new school year following passage of this
chapter. The departments shall implement substantively identical provisions to Colorado Revised Statute 22-1-
119.3 as of January 1, 2019.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
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ARTICLE 44:90
MEDICAL CANNABIS
Chapter
44:90:01 Definitions.
44:90:02 Registry identification cards.
44:90:03 Registration certificates.
44:90:04 Establishments.
44:90:05 Cannabis cultivation facilities.
44:90:06 Cannabis testing facilities.
44:90:07 Cannabis product manufacturing facilities.
44:90:08 Cannabis dispensaries.
44:90:09 Sampling and testing.
44:90:10 Packaging, labeling, and advertising.
44:90:11 Recordkeeping.
44:90:12 Enforcement.
44:90:13 Petitions to recognize debilitating medical conditions.
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CHAPTER 44:90:01
DEFINITIONS
44:90:01:01. Definitions.
Terms defined in SDCL 34-20G-1 shall have the same meaning in this article. In addition, terms
used in this article mean:
(1) “Agent identification badge,” means a credential issued by the department to an
establishment for the use by an agent while performing work-related duties;
(2) “Allowable quantity of cannabis products,” means an amount of cannabis products that may
be possessed by a cardholder or nonresident cardholder pursuant to SDCL 34-20G-1(1)(b);
(3) “Analyte,” means a chemical, compound, element, bacteria, yeast, fungus, or toxin that is
identified or measured by testing;
(4) “Analytical test,” means the use of a single technology to detect the presence or
concentration of a single analyte on one or more matrices;
(5) “Batch identifier,” means a unique number or code assigned by an establishment to a
quantity of cannabis, cannabis extract, or cannabis products for testing;
(6) “Cannabis beverage,” means a liquid edible cannabis product with a concentration of less
than 1 mg of THC per ounce of liquid;
(7) “Cannabis extract,” means the resin extracted from any part of a cannabis plant;
(8) “Cannabis oil,” means an edible cannabis product using a food safe oil as the primary
ingredient;
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(9) “Cannabis waste,” means cannabis flower or trim, cannabis seeds, cannabis products,
byproducts containing cannabis, or cannabis plants, excluding stalks without trichomes and
root balls, that are unfit for retail transfer to another cannabis establishment;
(10) “Certificate of analysis,” means a written report of the results of analytical testing,
including whether the results indicate compliance with this article;
(11) “Chain of custody,” means documentation of the handling of cannabis and cannabis
products to ensure the accuracy of cannabis testing and preventing diversion;
(12) “Collective,” means two or more cardholders who physically assist each other in the act
of cultivation or processing of cannabis for medical use, except that the sharing of an
enclosed, locked facility for cultivation by two or more cardholders in their own dwelling
shall not be considered a collective;
(13) “Competitive application,” means a medical cannabis establishment application that is
scored numerically by the department, in cases where more applicants apply than are allowed
by the local government;
(14) “Concentrated cannabis,” means cannabis extract or a compound, manufacture, salt,
derivative, mixture, or preparation from such resin, including hashish;
(15) “Equivalent cannabis weight,” means the weight, in ounces, that a given quantity of
cannabis product counts against the total allowable amount of cannabis under 34-20G-1(1);
(16) “Exit packaging,” means a bag (single use or reusable), box, or other container for use in
transporting cannabis, cannabis extract, or cannabis products after purchase at a dispensary;
(17) “Extended plant count,” means the authorized cultivation of more than three plants
simultaneously for a single patient’s use;
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(18) “Flower,” means the pistillate reproductive organs of a mature cannabis plant, whether
processed or unprocessed, including the flowers and buds of the plant;
(19) “Immature plant,” means a cannabis plant that is larger than a seedling but has not yet
flowered;
(20) “Index factor,” means the annual percentage change in the consumer price index for
urban wage earners and clerical workers as computed by the Bureau of Labor Statistics of the
United States Department of Labor, for the year immediately preceding the year of
adjustment;
(21) “Inhaled cannabis product,” means cannabis concentrate or a cannabis product that is
intended to be consumed by inhalation, including pre-rolled cannabis cigarettes, vaporizer
cartridges, and vaporizer pens;
(22) “Inherently hazardous substance,” means any solvent or chemical, other than ethanol,
with a flash point at or lower than 100 degrees Fahrenheit;
(23) “Inventory record,” means a daily electronic record of all cannabis, including seeds,
seedlings, plants, extracts, or products;
(24) “Inventory tracking system,” means an electronic system specified by the department for
the purposes of identifying and preventing diversion and protecting patients from unsafe
cannabis, cannabis extracts, or cannabis products;
(25) “ISO/IEC 17025 accreditation,” means accreditation by the International Accreditation
Service (IAS), the American Association for Laboratory Accreditation (A2LA), the ANSI
National Accreditation Board (ANAB), or another laboratory accreditation board that the
testing facility meets General Requirements for the Competence of Testing and Calibration
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June 23, 2021
Laboratories developed by the International Organization for Standardization and the
International Electrotechnical Commission for a particular analyte and technology;
(26) “Low-income qualifying patient,” means a qualifying patient whose household has a
gross monthly income that is 130 percent or less of the federal poverty level;
(27) “Marketing layer,” means the outermost layer of a retail sale container, which is most
predominantly apparent and visible;
(28) “Matrix,” means a component or substrate that contains an analyte being tested for;
(29) “Mature plant,” means a cannabis plant that has flowered;
(30) “Method,” means a body of procedures and techniques for performing an activity,
including sampling, chemical analysis or quantification, systematically presented in the order
in which they are to be executed;
(31) “Nationally recognized testing laboratory,” means an independent laboratory recognized
by the Occupational Health and Safety Administration pursuant to 29 CFR section 1910.7
(2020);
(32) “Non usable,” means unfit for sale or transfer;
(33) “Sample identifier,” means a unique number or code assigned to a sample to be tested by
a testing facility, either by the establishment submitting the sample or an agent of the testing
facility;
(34) “Seedling,” means a nonflowering cannabis plant or rooted cutting that measures 24
inches or less from the base of the main plant stalk to the most distant point of the plant's leaf
stems or branches;
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(35) “Synthetic,” means formulated or manufactured by a chemical process or by a process
that chemically changes a substance extracted from naturally occurring plant, animal, or
mineral sources;
(36) “Technology,” means a specific arrangement of analytical instruments, detection systems
and/or preparation techniques;
(37) “Testing sample record,” means a daily electronic record maintained by an establishment
of batch identifiers, sample identifiers, and associated information;
(38) “THC,” means delta-9 tetrahydrocannabinol;
(39) “Tincture,” means a liquid edible cannabis product with a concentration of greater than 1
mg of THC per ounce of liquid in the form of ethanol, propylene glycol, glycerin, or food
safe oil;
(40) “Topical cannabis product,” means a non-edible cannabis product that is intended to be
applied topically, including salves, creams, lotions, transdermal patches, or balms;
(41) “Transaction record,” means a daily electronic record created and maintained by a
dispensary to track transactions with patients;
(42) “Transfer record,” means a daily electronic record of any acquisition of seeds, seedlings,
plants, cannabis, or cannabis products and any transfer of cannabis or cannabis products to
another medical cannabis establishment;
(43) “Trim,” means trichome-containing leaves of the cannabis plant that have been
intentionally removed during cultivation; and
(44) “Valid form of personal identification,” means an unexpired form of identification
acceptable for voter identification pursuant to SDCL section 12-18-6.1.
Source:
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General Authority:
Law Implemented:
Reference: International Organization for Standardization & International Electrotechnical
Commission. (2018). ISO/IEC 17025:2017: General Requirements for the Competence of
Testing and Calibration Laboratories. https://www.iso.org/standard/66912.html
CHAPTER 44:90:02
REGISTRY IDENTIFICATION CARDS
Section
44:90:02:01 Practitioner’s written certification – Debilitating Medical Condition –
Recommendation for medical use of cannabis.
44:90:02:02 Practitioner certification – Recommendation for cultivation of cannabis –
Extended plant count.
44:90:02:03 Patient registry identification card application requirements – Initial
application.
44:90:02:04 Patient designation of caregivers – Minor patients – Person responsible for
making medical decisions -- Designation by residents of health care
facility or residential care facility.
44:90:02:05. Application to cultivate cannabis -- Patient designation of caregivers to
cultivate cannabis.
44:90:02:06 Registry identification card renewal requirements.
44:90:02:07 Change of designation of caregivers – Change of designation to cultivate.
44:90:02:08 Nonresident registration – Required documentation.
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44:90:02:09 Nonresident registration – Identification number.
44:90:02:10 Allowable quantity of cannabis products.
44:90:02:11 Fees for registry identification cards.
44:90:02:01. Practitioner’s written certification – Debilitating medical condition –
Recommendation for medical use of cannabis.
1. Except in connection with nonresidents, the department shall reject a written certification not
issued by a physician currently licensed pursuant to SDCL chapter 36-4.
2. A practitioner’s written certification shall be on a form supplied by the Department and shall
include:
(A) The practitioner’s name and address;
(B) The practitioner’s South Dakota medical license and National Practitioner Identification
numbers;
(C) Certification that the practitioner has assessed the patient's medical history and current
medical condition, including an in-person physical examination;
(D) The date on which the physical examination was conducted;
(E) Certification that the patient has a debilitating medical condition, as defined by 34-20G-
1(8), specifying the International Classification of Diseases, Tenth Revision (ICD-10)
code;
(F) Certification that the practitioner and patient have discussed treatment options for the
patient’s debilitating medical condition, including the benefits and risks of the medical
use of cannabis;
(G) Certification that the practitioner is available for further consultation with the patient as
required;
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(H) The date, if applicable, on which the patient’s need for the medical use of cannabis is
expected to end; and
(I) The number of caregivers, if more than one, that the patient’s age or medical condition
necessitates.
Source: _
General Authority: SDCL 34-20G-72(4)
Law Implemented: SDCL 34-20G-29
Reference: National Center for Health Statistics. (2021). International Classification of Diseases,
10th Revision, Clinical Modification. https://icd10cmtool.cdc.gov/
44:90:02:02. Practitioner certification – Recommendation for cultivation of cannabis –
Extended plant count.
1. Except in connection with nonresidents, the department shall reject a recommendation for the
cultivation of cannabis not issued by a physician currently licensed pursuant to SDCL
chapter 36-4.
2. Unless the practitioner specifies otherwise, a recommendation to allow cultivation of
cannabis shall be for three plants and shall expire on the same date as the patient’s registry
identification card.
3. If the practitioner recommends the cultivation of more than three plants, the recommendation
shall specify the reasons for the extended plant count, including:
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June 23, 2021
(A) The research on which the practitioner relied in calculating the amount of cannabis
required by the patient and that the risks associated with using that amount of cannabis
are outweighed by the benefits;
(B) The difficulty the patient would experience in obtaining an adequate supply of cannabis
from dispensaries due to the patient’s place of residence or level of disability;
(C) The practitioner’s reasoning as to why the extended plant count does not create an undue
risk of diversion or abuse; and
(D) Any other factors justifying the recommendation.
4. A recommendation for the cultivation of more than three plants shall expire 90 days after the
date of the recommendation.
Source: _
General Authority: SDCL 34-20G-72(4)
Law Implemented: SDCL 34-20G-29
44:90:02:03. Patient registry identification card application requirements – Initial
application.
A person with a debilitating medical condition, or the person responsible for making medical
decisions for that person, must apply for a patient registry identification card by submitting:
1. A completed application on a form supplied by the Department, which shall contain all
information required by SDCL 34-20G-29 and 34-20G-33;
2. A completed practitioner certification on a form supplied by the Department;
3. A photocopy of a valid form of personal identification;
4. A photograph meeting all requirements for a United States passport;
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5. If a low-income patient, documentation of household income, including:
(A) If employed, wage stubs or earning statements for the past 30 days;
(B) If self-employed, most recent federal income tax return and self-employment ledgers;
(C) Proof of all other income (including Social Security, Supplemental Security Income,
workers’ compensation, unemployment benefits, Bureau of Indian Affairs general
assistance, child support, rental income, veterans’ benefits, pensions, and interest income)
for the previous 12 months; and
(D) Most recent financial statement from checking accounts, savings accounts, certificates of
deposit, credit union accounts, retirement accounts, stocks, bonds, or dividends; and
6. The required fee, pursuant to ARSD 44:90:02:11.
Source: _
General Authority: SDCL 34-20G-72(4)
Law Implemented: SDCL 34-20G-29 and 34-20G-33
44:90:02:04. Patient designation of caregivers – Minor patients – Person responsible for
making medical decisions -- Residents of health care facility or residential care facility.
1. A qualifying patient may designate an eligible individual as a caregiver by submitting:
(A) A completed designation on a form supplied by the Department;
(B) The caregiver’s sworn statement that the caregiver has not been convicted of a
disqualifying felony offense in the previous 10 years;
(C) Any additional fees.
2. A qualifying patient under 21 years of age must designate at least one caregiver.
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3. Each person designated as a caregiver to one or more qualifying patients shall submit to the
Division of Criminal Investigation once every 2 years:
(A) A photocopy of a valid form of personal identification;
(B) A Division of Criminal Investigation fingerprint card processed by a local law
enforcement agency;
(C) An authorization and release form releasing the results of a state-only background check
to the department, and payment of any fee charged by the Division of Criminal
Investigation.
4. A caregiver must submit a photograph meeting all requirements for a United States passport
once every 5 years.
5. A caregiver must acknowledge in writing the prohibition of remuneration other than direct
costs incurred for assisting with the registered qualifying patient's medical use of cannabis,
pursuant to SDCL 34-20G-2(2).
6. If a practitioner has recommended that a patient younger than 18 years of age have multiple
caregivers, the custodial parents or legal guardians may designate other caregivers as
advised.
7. The person responsible for making medical decisions for a qualifying patient 18 years of age
or older, if qualified to be a caregiver, shall be designated caregiver to the qualifying patient.
If the practitioner has recommended that the patient have multiple caregivers, the person
responsible for making medical decisions may designate other caregivers as advised.
8. The designation of a caregiver who is an employee of a health care facility or residential care
facility to act as a caregiver on the premises of the facility requires the signature of an officer
of the facility.
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9. The designation shall have the same expiration date as the expiration of the qualifying
patient’s registry identification card.
Source: __
General Authority: SDCL 34-20G-72(4)
Law Implemented: SDCL 34-20G-1(10), 34-20G-2(2), 34-20G-30, SDCL 34-20G-31, 34-20G-
33, 34-20G-35, and 34-20G-39
44:90:02:05. Application to cultivate cannabis -- Patient designation of caregivers to
cultivate cannabis.
1. A patient applying to cultivate cannabis or designate a caregiver to cultivate cannabis on the
patient’s behalf must submit:
(A) A practitioner’s recommendation for the cultivation of cannabis;
(B) A diagram and photographs of the enclosed, locked facility in which the cannabis will be
cultivated; and
(C) The fee required by ARSD 44:90:02:11.
2. A qualifying patient under 21 years of age may not cultivate cannabis but may designate a
caregiver to cultivate cannabis on the patient’s behalf.
3. Upon approval of the application, the Department will issue a two-part registry identification
card to the patient or caregiver designated to cultivate cannabis:
(A) One part of the registration card must be posted inside the enclosed, locked facility in
which the cannabis is cultivated; and
(B) The other part of the registration card must be carried by the patient or caregiver.
4. Only one person may cultivate cannabis on behalf of a patient, except that:
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(A) A qualifying patient may share the designation with a designated caregiver who resides in
the same dwelling; and
(B) Two custodial parents or legal guardians of a qualifying patient under 18 years of age
who reside in the same dwelling may share the designation.
5. The entirety of a patient’s cannabis must be cultivated in a single enclosed, locked facility.
6. No caregiver may simultaneously cultivate an extended plant count for more than one
qualifying patient.
7. Two or more caregivers may not form a collective.
8. Two or more caregivers may not cultivate cannabis in a single-unit building or in a unit of a
multi-unit building, unless expressly permitted by SDCL chapter 34-20G.
Source: __
General Authority: SDCL 34-20G-72(4)
Law Implemented: SDCL 34-20G-1(10), 34-20G-1(13), 34-20G-29, 34-20G-33, and 34-20G-
51
44:90:02:06. Registry identification card renewal requirements.
1. A qualifying patient shall submit a renewal application, with the required fee, up to 45 days
prior to the expiration of the patient’s registry identification card on a form supplied by the
department.
2. A qualifying patient may designate caregivers, including changing the designation, at the
time of renewal on a form supplied by the Department.
Source: __
General Authority: SDCL 34-20G-72(4)
Law Implemented: SDCL 34-20G-29 and 34-20G-32
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44:90:02:07. Change of designation of caregivers – Change of designation to cultivate.
1. A qualifying patient or the qualifying patient’s legal representative may change the
designation of caregivers at any time, including:
(A) Substituting a new caregiver for a previously designated caregiver;
(B) Adding an additional caregiver if recommended by a practitioner;
(C) Adding a caregiver while a resident of a health care or residential care facility; or
(D) If cannabis cultivation is authorized, designating a caregiver to cultivate cannabis for the
patient, or changing or ending such designation.
2. The process for designating a replacement caregiver or designating an additional caregiver
shall be the same as designation at the time of an initial or renewal application, with the
addition of any fee for issuing new registry identification cards to the patient and all
caregivers.
3. If the change results in the removal of one or more caregivers:
(A) The patient shall notify each such caregiver in writing and shall certify to the department
that notice has been given;
(B) The caregiver shall have 15 days to return the registry identification card associated with
that patient; and
4. If the application indicates that the patient no longer wishes a caregiver to cultivate cannabis
on the patient’s behalf or wishes a different caregiver to cultivate cannabis on the patient’s
behalf:
(A) The patient shall notify the current caregiver in writing and shall certify to the department
that notice has been given;
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(B) The caregiver shall have 15 days to return the registry identification card and dispose of
the cannabis plants and any cannabis and cannabis products that were produced from the
allowable plants; and
5. A caregiver shall provide written notice to the patient or the person legally responsible for
making medical decisions for the patient and shall notify the department on a form supplied
by the department if the caregiver no longer wishes to act as the patient’s caregiver. The
caregiver shall return the registry identification card associated with the patient immediately
upon submitting such notice and, if applicable, shall dispose of cannabis plants and any
cannabis and cannabis products that were produced from the allowable plants.
6. Upon giving notice of a patient’s death pursuant to SDCL 34-20G-46(2), a caregiver shall,
within 15 days, return the registry identification card associated with the patient and, if
applicable, shall dispose of cannabis plants and any cannabis and cannabis products that were
produced from the allowable plants.
Source: __
General Authority: SDCL 34-20G-72(4)
Law Implemented: SDCL 34-20G-46 and 34-20G-48
44:90:02:08. Nonresident registration – Required documentation.
1. The department shall accept any of the following as sufficient documentation of a
nonresident’s debilitating medical condition:
(A) Practitioner certification issued in the person’s jurisdiction of residence and listing a
debilitating medical condition consistent with SDCL 34-20G-1;
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(B) Practitioner certification issued in the person’s jurisdiction of residence, along with
additional medical records indicating a debilitating medical condition recognized by the
department pursuant to SDCL 34-20G-1; or
(C) Practitioner certification on a form supplied by the department.
2. The department shall accept, as a nonresident’s authorization to use medical cannabis,
registry identification cards or their equivalent from any state, district, territory,
commonwealth, insular possession of the United States, or country recognized by the United
States that enacts legislation allowing patients to purchase, at minimum, cannabis or cannabis
products containing 5,000 mg of THC per month, except jurisdictions that limit the medical
use of cannabis to hemp, as defined in SDCL 38-35-1, and its derivatives.
Source: __
General Authority: SDCL 34-20G-72(8)
Law Implemented: SDCL 34-20G-1(19)
44:90:02:09. Nonresident registration – Identification number.
1. The department shall issue to a nonresident cardholder who has met all registration
requirements a nonrenewable 10-digit identification number, which shall expire on the
earliest of:
(A) Six months from the date of issuance of the identification number;
(B) The expiration date of the nonresident’s proof of authorization issued by the jurisdiction
where the nonresident cardholder resides; or
(C) Any earlier expiration date specified by the practitioner’s statement.
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June 23, 2021
2. The registration number shall be valid at no more than two dispensaries, which shall be
designated by the nonresident cardholder at the time of registration.
Source: __
General Authority: SDCL 34-20G-72(8)
Law Implemented: SDCL 34-20G-1(19)
44:90:02:10. Allowable quantity of cannabis products.
1. Under SDCL 34-20G-1(1)(b), cardholders and nonresident cardholders may possess a
quantity of cannabis products with an equivalent cannabis weight totaling 3 ounces minus the
amount of cannabis flower and trim possessed pursuant to SDCL 34-20G-1(1)(a).
2. The equivalent cannabis weight of cannabis products shall be:
Type of cannabis Amount equivalent to one
ounce of cannabis
Concentrated cannabis 8,000 mg
Vaporizer pens or cartridges 8,000 mg
Edibles (including tinctures, oils, or beverages
tested by a certified testing facility)
80 servings providing 10 mg
of THC
Tinctures, oils, or beverages (untested) 30 milliliters/1 fluid ounce
Topical (ointment or cream) 12 fluid ounces
Transdermal patches (tested) 80 doses of 10 mg THC
Transdermal patches (untested) 12 patches
Source: __
General Authority: SDCL 34-20G-72(9)
Law Implemented: SDCL 34-20G-1(1)(b), 34-20G-2, and 34-20G-3
44:90:02:11. Fees for registry identification cards.
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1. The base fee for initial application and yearly renewal of a patient registry identification card
for a resident of South Dakota shall be:
(A) $20 for a low-income qualifying patient; and
(B) $100 for all other applicants.
2. Qualifying patients shall submit an additional $20 fee for the issuance of any caregiver
registry identification card, except no fee shall be charged for the designation of a caregiver
at the time of the initial or renewal application.
3. An additional $20 fee is required for the printing of a two-part registry identification card for
patients electing to cultivate cannabis or designate a caregiver to cultivate cannabis.
4. Nonresidents shall submit a $100 fee with a registration application.
5. All fees imposed under this section shall be nonrefundable.
Source: __
General Authority: SDCL 34-20G-72(10)
Law Implemented: SDCL 34-20G-29, 34-20G-31, 34-20G-3
CHAPTER 44:90:03
REGISTRATION CERTIFICATES
Section
44:90:03:01 Application for registration certificate – Components of complete
application.
44:90:03:02 Operating procedures – Required contents – All medical cannabis
establishments.
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44:90:03:03 Cannabis cultivation facility operating procedures – Additional
requirements.
44:90:03:04 Cannabis testing facility operating procedures – Additional requirements.
44:90:03:05 Cannabis product manufacturing facility operating procedures –
Additional requirements.
44:90:03:06 Cannabis dispensary operating procedures – Additional requirements.
44:90:03:07 Compliance with local zoning requirements – Form of certification.
44:90:03:08 Local registration, license, or permit – Department verification.
44:90:03:09 No registration certificate revocation – Department verification.
44:90:03:10 No disqualifying felonies – Form of certification.
44:90:03:11 Department review of competitive application – Scoring criteria.
44:90:03:12 Department notification of applicants – Tiebreaking procedures.
44:90:03:13 Fees for registration certificate – Application and renewal – Change in
location or ownership.
44:90:03:01. Application for registration certificate – Components of complete application.
1. An initial application for a registration certificate for any type of medical cannabis
establishment shall include:
(A) A completed application form;
(B) Operating procedures consistent with this article;
(C) Proof of property owner’s consent to cultivation or manufacturing;
(D) Certification of compliance from the local municipality or county ensuring applicant’s
proposed plans and location meet all local zoning and ordinance requirements;
(E) Copies of all required registrations, licenses, or permits;
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(F) Photocopies of a valid form of identification issued in South Dakota, or its equivalent
issued in another U.S. jurisdiction, for all principal officers and board members;
(G) Photocopies of organizing documents, operating agreements, management agreements,
bylaws, or other legal documents relating to the applicant’s business structure;
(H) Certification that background checks have been completed for all medical cannabis
establishment agents; and
(I) The applicable fee.
2. A renewal application for a registration certificate:
(A) Is required every 12 months or whenever 50 percent or more of the ownership interest in
the establishment has been transferred since the most recent renewal application; and
(B) Shall include all components of an initial application, except that a detailed description of
any changes to operating procedures, or a certification that no such changes exist, may be
substituted for a complete set of operating procedures.
3. An application for the transfer of a registration certificate to a different physical location
shall include:
(A) A completed change of location form;
(B) Diagrams of all locations in which cannabis will be cultivated, harvested, dried, stored,
manufactured, or destroyed;
(C) A detailed description of any changes to operating procedures, or a certification that no
such changes exist;
(D) Certification of compliance with all local zoning requirements;
(E) Copies of all required registration, licenses, or permits reflecting the establishment’s new
address; and
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(F) The applicable fee.
4. An application to transfer less than 50 percent of the ownership interest in a medical cannabis
establishment shall include:
(A) A completed transfer of ownership interest form;
(B) Photocopies of a valid form of identification issued in South Dakota, or its equivalent
issued in another U.S. jurisdiction, for any new principal officers and board members;
(C) Certification that background checks have been completed for any new medical cannabis
establishment agents; and
(D) The applicable fee.
Source: _
General Authority: SDCL 34-20G-72(2)
Law Implemented: SDCL 34-20G-55(1)
44:90:03:02. Operating procedures – Required contents – All medical cannabis
establishments.
The operating procedures of any medical cannabis establishment shall include:
1. A management plan identifying the individuals who will be in charge of day-to-day
operations of the establishment, including compliance with this article and SDCL chapter 34-
20G and their specific management roles;
2. A site plan, which shall:
(A) Identify any areas in which cannabis will be cultivated, harvested, dried, stored,
manufactured, tested, or destroyed;
(B) Indicate the types of activities that will take place in those areas;
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(C) Identify a means of legal ingress onto property from the closest maintained public right of
way; and
(D) Provide sufficient detail for the Department to determine that the establishment is
completely self-contained and does not have any access to any other cannabis
establishment or other business, except by public right of way.
3. Operating days and hours;
4. A workplace safety plan consistent with 29 CFR Part 1910 (2020), covering personal
protective equipment, hazard assessment, safe equipment operation, proper application of
agricultural chemicals, ladder use, hazard communication and other state and federal
workplace safety requirements;
5. Plans for compliance with all applicable safety standards contained in local ordinance, SDCL
chapter 11-10, ARSD article 61:15, and ARSD chapter 20:44:22;
6. A security plan indicating all doors, windows, gates, exterior lights, alarm sensors, cameras,
and how alarms and cameras will be monitored;
7. Any additional steps to ensure the safety of patrons and the community;
8. Plans for preventing the diversion of cannabis to non-cardholders;
9. A waste management plan for disposal of cannabis waste and, if applicable, wastewater that
conforms to federal, state, or local rules, regulations, and laws;
10. Pre-employment screening procedures, including criminal background check; and
11. Processes for limiting access by unauthorized persons, including verification of identity for
all vendors and contractors, issuance of a visitor badge, and closely monitoring all visitors.
Source: _
General Authority: SDCL 34-20G-72(2) and 34-20G-72(3)
Law Implemented: SDCL 34-20G-55(1)(c)
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44:90:03:03. Cannabis cultivation facility operating procedures – Additional requirements.
The operating procedures for a cultivation facility shall provide the Department with sufficient
detail to determine the establishment’s compliance with this article and SDCL chapter 34-20G,
including:
1. Plans to obtain an adequate supply of cannabis seeds or seedlings;
2. The number of mature cannabis plants, or size of plant canopy, to be cultivated;
3. The number of seedlings to be cultivated;
4. Plans for wastewater and waste disposal for the cultivation facility and the applicant’s
certification of compliance with all state and federal laws;
5. The lights, irrigation, greenhouses and other equipment to be used and the approval listing;
6. Plans for providing electricity, water and other utilities necessary for the normal operation of
the cultivation facility;
7. Plans for ventilation and filtration systems that reduce the potential for mold; and
8. A list of all pesticides, fungicides, insecticides, and fertilizers that will be present or used.
Source: _
General Authority: SDCL 34-20G-72(2)
Law Implemented: SDCL 34-20G-55(1)(c)
44:90:03:04. Cannabis testing facility operating procedures – Additional requirements.
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The written operating procedures for a testing facility shall provide the Department with
sufficient detail to determine the establishment’s compliance with this article and SDCL chapter
34-20G, including without limitation:
1. A policy that, as indicated by signature, ensures management and personnel are free from any
undue internal and external commercial, financial, or other influences that may adversely
affect the quality of their work or diminish confidence in its competence, impartiality,
judgement, or operational integrity;
2. A signed disclosure by the owner(s) stating that there is no financial conflict with, interest in,
investment in, landlord-tenant relationship with or loan to a cannabis cultivation facility,
cannabis product manufacturing facility, or cannabis dispensary;
3. A quality control and quality assurance manual;
4. A list of analytical tests, specifying the analyte and technology for each, the applicant intends
to offer and:
(A) Prior to July 1, 2024, proof that the applicant is working with an accreditation body to
ensure compliance with applicable rules and ensure progress towards achieving ISO/IEC
17025 accreditation including all proposed analytical tests within its scope of
accreditation; or
(B) On or after July 1, 2024, proof of ISO/IEC 17025 accreditation for each analytical test
proposed;
5. Standard operating procedures for all preanalytical, analytical, and post-analytical processes
performed by the laboratory;
6. Protocols for performing validation studies of all analytical tests to be performed;
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7. Protocols for biannual proficiency testing and documenting successful completion of above
80 percent;
8. A program to assess and document, at least annually, the competency of all technical and
scientific staff that perform preanalytical, analytical, and postanalytical processes;
9. Policies and procedures that ensure the protection of its clients’ confidential information and
proprietary rights, including procedures for protecting the electronic storage and transmission
of results;
10. Policies and procedures for collection and receipt of samples for mandatory or other testing;
11. Chain of custody protocols and a sample chain of custody form; and
12. Equipment to be used and its listing by a nationally recognized testing laboratory.
Source: _
General Authority: SDCL 34-20G-72(2)
Law Implemented: SDCL 34-20G-55(1)(c)
Reference: International Organization for Standardization & International Electrotechnical
Commission. (2018). ISO/IEC 17025:2017: General Requirements for the Competence of
Testing and Calibration Laboratories. https://www.iso.org/standard/66912.html
44:90:03:05. Cannabis product manufacturing facility operating procedures – Additional
requirements.
The operating procedures for a cannabis product manufacturing facility shall provide the
department with sufficient detail to determine the establishment’s compliance with this article
and SDCL chapter 34-20G, including:
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1. A description of the classes of products, such as extracts, inhaled products, edible products,
beverages, topical products, ointments, oils, and tinctures, that will be manufactured by the
establishment;
2. A detailed description of the manufacturing processes that will occur on the premises,
including:
(A) Mechanical extraction using potable water, ice, dry screening or sieving, cryonic
extraction, pressure, or temperature;
(B) Infusion into propylene glycol, glycerin, or food-grade fats;
(C) Extraction using food-grade ethanol; and
(D) Extraction using an inherently hazardous substance;
3. A diagram illustrating in which areas of the premises each manufacturing activity will occur;
4. A diagram illustrating the areas of the premises where any solvent, excluding water,
chemical or potentially hazardous substance will be stored;
5. Plans for ventilation and filtration systems that reduce the risk of fire or respiratory harm
within the facility;
6. Certification from a professional engineer licensed in this state of the safety of the equipment
used for cannabis extraction and the location of the equipment and the professional engineer's
approval of the standard operating procedures for the cannabis extraction;
7. Documentation from a professional engineer licensed in this State or a state or local official
authorized to certify compliance that the equipment used for cannabis extraction and the
location of the equipment comply with all applicable safety standards contained in local
ordinance, SDCL chapter 11-10, ARSD article 61:15, and ARSD chapter 20:44:22; and
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8. Documentation from the manufacturer of the cannabis extraction system or a professional
engineer licensed in this State showing that a professional grade, closed-loop extraction
system that recovers the solvents used to produce cannabis extract is used by the
establishment.
Source: _
General Authority: SDCL 34-20G-72(2)
Law Implemented: SDCL 34-20G-55(1)(c)
44:90:03:06. Cannabis dispensary operating procedures – Additional requirements.
The operating procedures for a dispensary shall provide the department with sufficient detail to
determine the establishment’s compliance with this article and SDCL chapter 34-20G, including:
1. Plans to obtain an adequate supply of cannabis, cannabis extracts, and cannabis products;
2. Types of products offered;
3. Verification of identification card and purchase limits;
4. Advertising plan, including onsite signs;
5. Training plan;
6. Point-of-sale software to be used, including documentation of its interoperability with the
inventory tracking system;
7. Parking;
8. Accessibility to individuals with disabilities; and
9. Suitability of location for maximizing access by cardholders.
Source: _
General Authority: SDCL 34-20G-72(2) and 34-20G-72(3)
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Law Implemented: SDCL 34-20G-55(1)(c)
44:90:03:07. Compliance with local zoning requirements – Form of certification.
Each initial or renewal application shall include the application’s certification, on a form
supplied by the department, of compliance with all applicable city and county zoning
requirements, including any city or county odor ordinances or regulations.
Source: _
General Authority: SDCL 34-20G-72(2)
Law Implemented: SDCL 34-20G-55(1)(d)
44:90:03:08. Local registration, license, or permit – Department verification.
1. Each initial or renewal application shall include either:
(A) A certification, on a form supplied by the department, that the applicant is not required to
obtain any city or county registration, license, or permit; or
(B) Copies of all required registrations, licenses, or permits.
2. The department may contact the city or county to verify the absence of registration, licensing,
or permitting requirements or to verify the form and content of such documents.
Source: _
General Authority: SDCL 34-20G-72(2)
Law Implemented: SDCL 34-20G-55(1)(e) and 34-20G-60
44:90:03:09. No registration certificate revocation – Department verification.
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Each initial or renewal application shall include a certification, on a form supplied by the
department, that none of the principal officers or board members has served as a principal officer
or board member for a medical cannabis establishment that has had its registration certificate
revoked.
Source: _
General Authority: SDCL 34-20G-72(2)
Law Implemented: SDCL 34-20G-55(2)
44:90:03:10. No disqualifying felonies – Form of certification.
With each initial or renewal application:
1. Each principal officer or board member shall aver that the individual has not been convicted
of any violent felony offense in the previous 10 years, whether in South Dakota or another
jurisdiction.
2. The signatory to the application shall aver that the applicant has conducted background
checks on all principal officers and board members within 90 days of the initial application
or within two years of a renewal application.
Source: _
General Authority: SDCL 34-20G-72(2)
Law Implemented: SDCL 34-20G-61 and 34-20G-62
44:90:03:11. Department review of competitive applications – Scoring criteria.
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June 23, 2021
In cases where more applicants apply than are allowed by the local government, the department
shall numerically score competitive applications according to the following criteria:
1. The city or county limiting the number of establishments, in response the department’s
inquiry, has endorsed the application as beneficial to the community (1 point).
2. The city or county limiting the number of establishments has not informed the department the
location specified in the application is unsuitable, due to zoning regulations or inaccessibility
to the public, for the proposed use (1 point).
3. All principal officers and board members have certified that they have not, in the previous 10
years, in any U.S. jurisdiction:
(A) Been convicted of a criminal offense involving fraud or false statements to a unit of
government (1 point); or
(B) Served as a principal officer or board member of any business that has had a license or
permit suspended or revoked for violations of laws or regulations relating to cannabis,
alcohol, tobacco, or gaming (1 point).
4. The applicant has submitted a floorplan with sufficient detail to enable the department to
determine where all activities listed in the operating procedures will take place (1 point).
5. The applicant has submitted a business plan outlining the details contained in SDCL 34-20G-
72(3)(d) (1 point).
Source: _
General Authority: SDCL 34-20G-72(3)
Law Implemented: SDCL 34-20G-56
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44:90:03:12. Department notification of applicants – Tiebreaking procedures.
1. The dispensary applicant with the highest score shall be awarded a registration certificate.
2. If the city or county has enacted an overall limit on the number of establishments, the
department shall award registration certificates, in order of final score, until the limit is
reached.
3. If the city or county has enacted a limit on establishments by establishment type, the
department shall award registration certificates, in order of final score, until the limit is
reached for each establishment type.
4. If applicants are tied for one or more openings in a locality, the affected applicants shall have
the opportunity to view, in person or via videoconference, a random drawing to determine the
successful applicants.
5. The notification of unsuccessful applicants shall identify the department’s decision as a final
department action subject to judicial review.
Source: _
General Authority: SDCL 34-20G-72(3)
Law Implemented: SDCL 34-20G-56 and 34-20G-59
44:90:03:13. Fees for registration certificates – Application and renewal – Change in
location or ownership.
1. Applicants shall submit a $5,000 fee with an initial or renewal application for a registration
certificate.
2. Establishments shall submit a $250 fee with an application to
(A) Operate at a different physical location.
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June 23, 2021
(B) Transfer an ownership interest to any person not listed on the establishment’s most recent
initial or renewal application.
3. Establishments shall submit a $50 fee with each request for an agent identification badge.
4. The fees imposed under this section shall increase annually based on the index factor.
5. The fees imposed under this section shall be nonrefundable.
Source: __
General Authority: SDCL 34-20G-72(10)
Law Implemented: SDCL 34-20G-55
CHAPTER 44:90:04
ESTABLISHMENTS
Section
44:90:04:01 Change in management – Duty to report.
44:90:04:02 Corrective and preventive action – Written procedures.
44:90:04:03 Duty to report criminal activity to department.
44:90:04:04 Duty to report criminal activity to law enforcement.
44:90:04:05 Lighting.
44:90:04:06 Doors and windows.
44:90:04:07 Placement of security cameras.
44:90:04:08 Recording by security cameras – Access by department.
44:90:04:09 Storage of camera footage.
44:90:04:10 Alarm system.
44:90:04:11 Notification to department.
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44:90:04:12 Agent identification badges to be obtained by establishments.
44:90:04:13 Agent identification badges to be displayed.
44:90:04:14 Controlled access – Verification of identity.
44:90:04:15 Visitor badges to be worn by contractors performing work at a medical
cannabis establishment.
44:90:04:16 Operation of agricultural, industrial, or other heavy equipment – Training
requirements.
44:90:04:17 Record-keeping -- Use of inventory tracking system– Training
requirements.
44:90:04:18 Security protocols– Training requirements.
44:90:04:19 Vehicle requirements – Establishments.
44:90:04:20 Transport manifests – Form and content.
44:90:04:21 Storage during transport.
44:90:04:22 Conduct during transport.
44:90:04:23 Transport incident notification.
44:90:04:24 Health and safety standards for storage.
44:90:04:25 Storage while awaiting test results.
44:90:04:01. Change in management – Duty to report.
An establishment shall remain under the direction of the individuals identified in its management
plan and shall provide the department an updated management plan within seven days after any
change in management personnel occurs.
Source: __
General Authority: SDCL 34-20G-72(5)(a)
Law Implemented: SDCL 34-20G-63
44:90:04:02. Corrective and preventive action – Written procedures.
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An establishment shall maintain and follow written procedures for implementing corrective
action and preventive action, including:
1. Analysis of processes, work operations, reports, records, service records, complaints,
returned product, and other sources of data to identify existing and potential root causes of
nonconformance or other quality problems;
2. Identifying any actions needed to correct and prevent recurrence of nonconformance and
other quality problems;
3. Verifying the corrective action or preventive action to ensure that such action is effective and
does not adversely affect finished products or processes;
4. Implementing and recording changes in methods and procedures needed to correct and
prevent identified quality problems;
5. Ensuring the information related to quality problems or nonconformance is disseminated to
those directly responsible for assuring the quality of products or the prevention of such
problems;
6. Submitting relevant information on identified quality problems and corrective action and
preventive action documentation, and confirming the result of the evaluation, for
management review; and
7. Ensuring that cannabis or cannabis products that do not meet safety standards are quickly
identified and destroyed or remediated to prevent harm to patients.
Source: __
General Authority: SDCL 34-20G-72(5)(a)
Law Implemented: SDCL 34-20G-63, 34-20G-71
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44:90:04:03. Duty to report criminal activity to department.
In addition to notice required by SDCL 34-20G-50, an establishment shall provide notice to the
department within one business day upon its discovery of any plan or other action of any person
to:
1. Steal cannabis plants, cannabis, cannabis products, cannabis paraphernalia, equipment, or
money;
2. Sell or otherwise provide cannabis plants, cannabis, cannabis products, or cannabis
paraphernalia to unauthorized persons;
3. Purchase or otherwise obtain cannabis plants, cannabis, cannabis products, or cannabis
paraphernalia by unauthorized persons;
4. Falsify inventory records or transport manifests; or
5. Commit any other crime relating to the operation of the establishment.
Source: __
General Authority: SDCL 34-20G-72(5)(a)
Law Implemented: SDCL 34-20G-50, 34-20G-63, and 34-20G-64
44:90:04:04. Duty to report criminal activity to law enforcement.
Any criminal activity reported to the department shall also be reported to a local law
enforcement agency.
Source: __
General Authority: SDCL 34-20G-72(5)(a)
Law Implemented: SDCL 34-20G-63 and 34-20G-88
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44:90:04:05. Lighting.
(1) Any gate or perimeter entry point of a medical cannabis establishment must have lighting
sufficient for observers to see, and cameras to record, any activity within ten feet of the gate or
entry.
(2) A motion detection lighting system may be employed to light required areas in low-light
conditions.
Source: __
General Authority: SDCL 34-20G-72(5)(c)
Law Implemented: SDCL 34-20G-64
44:90:04:06. Doors and windows.
Commercial grade locks, intended for facilities requiring high levels of physical security, are
required on all perimeter entry doors. All windows must be in good condition and lockable.
Source: __
General Authority: SDCL 34-20G-72(5)(c)
Law Implemented: SDCL 34-20G-64
44:90:04:07. Placement of security cameras.
All establishments must permanently fix security cameras:
1. At each exterior door and gate to allow identification of persons entering or exiting the
premises.
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2. At each door separating non-public areas of a dispensary from areas in which sales to
patients and caregivers are made, to allow identification of persons entering or exiting
non-public areas.
3. In sufficient number to allow the viewing, in its entirety, of any area where cannabis,
cannabis plants, cannabis products, or cannabis waste are cultivated, manufactured,
stored, destroyed, disposed, or prepared for transfer, sale, or testing.
Source: __
General Authority: SDCL 34-20G-72(5)(c)
Law Implemented: SDCL 34-20G-64
44:90:04:08. Recording by security cameras – Access by department.
1. Video surveillance shall meet the following minimum requirements:
(A) Minimum resolution of 720 pixels;
(B) Internet protocol (IP) compatibility supporting live viewing by the department over a
secure internet connection;
(C) Minimum of 15 frames per second; and
(D) Clear and accurate display of time and date.
2. The cameras shall be set to record 24 hours a day at all establishments, except cameras
placed at exterior doors used by patients to enter or exit the dispensary, which to ensure
patient privacy shall be set to record only outside of the dispensary’s operating hours.
3. Surveillance systems shall have a backup power source allowing for recording and
transmitting video for a minimum of two hours in the event of a power failure.
Source: __
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General Authority: SDCL 34-20G-72(5)(c)
Law Implemented: SDCL 34-20G-64
44:90:04:09. Storage of camera footage.
1. An establishment must maintain surveillance recordings for a minimum of 180 days, either:
(A) On a surveillance system storage device secured on the premises in a lockbox, cabinet, or
closet and alarmed with motion and seismic sensors to protect from employee tampering
or criminal theft; or
(B) Stored on a secure third-party server.
2. All video recordings are subject to inspection by any department employee or law
enforcement officer and must be copied and provided to the department or law enforcement
officer upon request.
3. Licensees must maintain a list of all persons with access to video surveillance recording and
written procedures for controlling access to recordings.
Source: __
General Authority: SDCL 34-20G-72(5)(c)
Law Implemented: SDCL 34-20G-64
44:90:04:10. Alarm system.
1. Monitored sensors are required on all exterior doors, windows, and gates.
2. Alarm systems must be monitored by a security company capable of contacting the
establishment and, if necessary, law enforcement.
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June 23, 2021
3. The system must include an audible alarm, which must be capable of being disabled remotely
by the security company.
4. Surveillance systems shall alert the security company in the event of a power failure and
shall operate for a minimum of four hours on backup power.
Source: __
General Authority: SDCL 34-20G-72(__)
Law Implemented: SDCL 34-20G-__
44:90:04:11. Notification to department.
An establishment must notify local law enforcement and the department within 24 hours upon
learning of any unauthorized entry or theft of cannabis, cannabis plants, or cannabis products.
Source: __
General Authority: SDCL 34-20G-72(5)(c)
Law Implemented: SDCL 34-20G-50
44:90:04:12. Agent identification badges to be obtained by establishments.
1. A medical cannabis establishment must obtain an agent identification badge for any agent
before that person is permitted to perform duties on the site of the establishment or transport
cannabis, cannabis extracts, or cannabis products.
2. The application for an agent identification badge shall be made on a form supplied by the
department, which shall include an attestation that the establishment has obtained a criminal
background check on the applicant in the previous two years, and which shall be
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accompanied by a photograph meeting the requirements for a United States passport and the
required fee.
3. The identification badge shall remain the property of the department.
4. An establishment must inform the department immediately if the individual ceases to be an
agent of the establishment. The badge shall become void and shall be returned to the
department.
Source: __
General Authority: SDCL 34-20G-72(5)(g)
Law Implemented: SDCL 34-20G-72(5)(g)
44:90:04:13. Agent identification badges to be displayed.
A medical cannabis establishment must provide a department-issued agent identification badge
to each agent, who must display this badge whenever on the premises of the establishment or
transporting cannabis, cannabis extract, or cannabis products.
Source: __
General Authority: SDCL 34-20G-72(5)(g)
Law Implemented: SDCL 34-20G-72(5)(g)
44:90:04:14. Controlled access – Verification of identity.
1. No medical cannabis establishment shall share premises with or permit access directly from
another medical cannabis establishment, business that sells alcohol or tobacco, or, if allowed
by law, other cannabis establishment.
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June 23, 2021
2. A medical cannabis establishment must verify the age and identity of anyone entering the
premises.
3. Unless permitted by ARSD 44:90:08:01, no person shall be allowed to enter the premises
other than agents of the establishment, cardholders, contractors 21 years of age or older hired
by the establishment, employees or agents of the department, law enforcement officers,
employees or agents of other local or state agencies with regulatory authority, including fire
marshals, electrical inspectors, pesticide control staff and environmental inspectors, for the
purpose of exercising such regulatory authority.
Source: __
General Authority: SDCL 34-20G-72(5)(g)
Law Implemented: SDCL 34-20G-65
44:90:04:15. Visitor badges to be worn by contractors performing work at a medical
cannabis establishment.
A medical cannabis establishment must issue a visitor badge to any temporary contractor of the
establishment whose scope of work will not involve the handling of cannabis, cannabis plants,
cannabis extracts, or cannabis products, including a carpenter, electrician, plumber, engineer, or
alarm technician. Such contractors shall work under the direct supervision of a medical cannabis
establishment agent whenever working in an area in which cannabis plants, cannabis, cannabis
extracts, or cannabis products are present.
Source: __
General Authority: SDCL 34-20G-72(5)(g)
Law Implemented: SDCL 34-20G-65
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44:90:04:16. Operation of agricultural, industrial, or other heavy equipment – Training
requirements.
1. Establishment agents shall receive thorough training in the safe operation of any heavy
agricultural equipment, industrial equipment such as extraction and packaging equipment,
and other heavy equipment such as forklifts, before operating such equipment.
2. Establishment agents shall complete OSHA-approved certification courses prior to using any
equipment if required under local ordinance or state law.
Source: __
General Authority: SDCL 34-20G-72(5)(g)
Law Implemented: SDCL 34-20G-72(5)(g)
44:90:04:17. Record-keeping – Use of inventory tracking system – Training requirements.
1. Prior to performing duties onsite or transporting cannabis, an establishment agent shall
receive at minimum two hours of training in record keeping, which shall be documented in
the establishment’s records.
2. Any establishment agent who will enter data into the inventory tracking system required by
the department shall additionally receive at minimum two hours of hands-on training; and
3. At least one establishment agent shall receive at minimum four hours of training to act as an
administrator of the inventory tracking system.
Source: __
General Authority: SDCL 34-20G-72(g)
Law Implemented: SDCL 34-20G-__
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June 23, 2021
44:90:04:18. Security protocols– Training requirements.
Each establishment agent shall receive training in all aspects of the establishment’s security
protocol, focusing on the agent’s role in deterring and preventing theft and preventing
unauthorized access to the premises.
Source: __
General Authority: SDCL 34-20G-72(5)(g)
Law Implemented: SDCL 34-20G-64
44:90:04:19. Vehicle requirements – Establishments.
Establishments must provide the following information to the department for each vehicle that
will be used to transport cannabis, cannabis concentrate, or cannabis products, including samples
for testing:
1. Make, model, and license plate number;
2. Proof of a valid insurance policy;
3. A description, with photos as necessary, of a locking compartment to be used to secure
cannabis, cannabis extracts, and cannabis products;
4. Verification that the vehicle has a functioning alarm system; and
5. A description of how the cannabis, cannabis extracts, or cannabis products will be
maintained in an appropriate temperature range.
Source: __
General Authority: SDCL 34-20G-72(5)(f)
Law Implemented: SDCL 34-20G-8, 34-20G-9, 34-20G-10, and 34-20G-11
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June 23, 2021
44:90:04:20. Transport manifests – Form and content.
1. A transport manifest is required for all authorized transfers of any amount of cannabis,
cannabis extracts, or cannabis products, except retail sales at a dispensary.
2. The transport manifest shall contain:
(A) The name, address, phone number, and license number of the establishment transporting
the cannabis, cannabis extracts, or cannabis products;
(B) The name, address, phone number, and license number of the establishment receiving the
items;
(C) The phone number and web address of the department’s secure verification system;
(D) Description and quantities, either by weight or unit, of all items, including samples,
contained in each transport;
(E) Date of transport and approximate time of departure and arrival;
(F) Vehicle make, model and license plate number;
(G) The name and signature of driver and any other agent accompanying the transport; and
(H) The name and signature of the person accepting the transport, upon delivery.
3. A separate transport manifest must be prepared for each medical cannabis establishment that
will receive cannabis, cannabis extracts, or cannabis products.
4. The vehicle must carry three copies of each transport manifest:
(A) One for the recipient;
(B) One to be returned to the originating establishment for the purposes of record keeping;
and
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(C) One to be provided at the request of law enforcement or an agent of the department, if the
vehicle is involved in a traffic stop or collision.
5. Any cannabis, cannabis products, or cannabis extracts, including samples, that are refused by
the intended recipient shall be noted on the transport manifest and noted in the establishments
inventory records after the items are returned.
6. A transport manifest shall not otherwise be altered after departing from the originating
premises.
7. The transport manifest does not take the place of a chain-of-custody form that may be
required of the establishment.
Source: __
General Authority: SDCL 34-20G-72(5)(f)
Law Implemented: SDCL 34-20G-8, 34-20G-9, 34-20G-10, and 34-20G-11
44:90:04:21. Storage during transport.
1. All cannabis or cannabis products being transported must be contained within an enclosed,
locked area in the transport vehicle and out of public view.
2. Samples of cannabis, cannabis extracts, and cannabis products for testing shall be transported
in appropriately labeled sample collection containers with tamper evident seals affixed.
3. All cannabis, cannabis extracts, or cannabis products being transported to another
establishment, other than samples for testing, shall be transported within sealed containers
identifying the recipient.
4. A cannabis product manufacturing facility or dispensary transporting any edible product
requiring refrigeration to another establishment must provide refrigerated transport.
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June 23, 2021
Source: __
General Authority: SDCL 34-20G-72(5)(f)
Law Implemented: SDCL 34-20G-8, 34-20G-9, 34-20G-10, and 34-20G-11
44:90:04:22. Conduct during transport.
1. Only agents of the establishment, wearing agent identification badges, and who are listed on
each transport manifest, may be in the vehicle.
2. Any vehicle transporting cannabis, cannabis extract, or cannabis products must travel directly
to the destinations listed on transport manifests, making stops only:
(A) For meals, when the transport lasts more than three hours round trip;
(B) For rest periods required by law;
(C) To refuel; or
(D) Under exigent circumstances, including collisions, traffic stops, mechanical breakdowns,
weather emergencies, or medical emergencies.
3. The agents may not remove the cannabis, cannabis extracts, or cannabis products from the
vehicle until arrival at the destination listed on the transport manifest, except under exigent
circumstances in consultation with the department.
4. An establishment agent must make a vehicle used for the transport of cannabis, cannabis
extract, or cannabis products immediately available for inspection upon request of the
department.
5. Upon law enforcement stop or other contact all persons in the vehicle shall identify
themselves with their agent identification badges and all transport manifests.
Source: __
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June 23, 2021
General Authority: SDCL 34-20G-72(5)(f)
Law Implemented: SDCL 34-20G-8, 34-20G-9, 34-20G-10, and 34-20G-11
44:90:04:23. Transport incident notification.
1. Any traffic stop, breakdown, or collision involving a vehicle being used by an establishment
to transport cannabis, cannabis extract, or cannabis products, or any unscheduled stop lasting
more than two hours shall be reported to the department within one business day.
2. Any theft or break-in involving a vehicle being used by an establishment to transport
cannabis, cannabis extract, or cannabis products shall be reported to local law enforcement
immediately and to the department within one business day.
3. If exigent circumstances require removal of cannabis from the vehicle prior to arrival at the
destination listed on the transport manifest, the establishment agents shall make a good faith
effort to contact the department for direction. If unable to contact the department, the
establishment agents shall make good faith efforts to protect the shipment from diversion.
Source: __
General Authority: SDCL 34-20G-72(5)(f)
Law Implemented: SDCL 34-20G-8, 34-20G-9, 34-20G-10, and 34-20G-11
44:90:04:24. Health and safety standards for storage.
A medical cannabis establishment shall store cannabis, and cannabis products, unless on display
for sale:
1. In secure, sealed containers that prevent against damage from light, water, insects, or rodents;
and
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June 23, 2021
2. Under environmental conditions, including refrigeration of any perishable edible product,
that will protect against physical, chemical, or microbial contamination and damage from
temperature or humidity.
Source: __
General Authority: SDCL 34-20G-72(5)(f)
Law Implemented: SDCL 34-20G-8, 34-20G-9, 34-20G-10, and 34-20G-11
44:90:04:25. Storage while awaiting test results.
A cultivation facility or cannabis product manufacturing facility awaiting testing results must:
1. Enter the identification number of the batch and the identification number of the samples
associated with the batch into the establishment’s inventory records;
2. Store the batch in one or more sealed containers enclosed on all sides; and
3. Affix to the container(s) a label including the following information:
(A) The establishment’s identification number;
(B) The batch number entered into inventory records;
(C) Name and identification number of the testing facility that will perform the tests;
(D) The sample’s unique identification number
(E) The date the samples were taken; and
(F) In bold, capital letters, no smaller than 12-point font, “PRODUCT NOT TESTED”
Source: __
General Authority: SDCL 34-20G-72(5)(f)
Law Implemented: SDCL 34-20G-8, 34-20G-9, 34-20G-10, and 34-20G-11
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June 23, 2021
CHAPTER 44:90:05
CANNABIS CULTIVATION FACILITIES
Section
44:90:05:01 Cultivation activities – Compliance with operating procedures.
44:90:05:02 Packaging and labeling cannabis for retail sale.
44:90:05:03 Cultivation equipment - Safety.
44:90:05:04 Cultivation area.
44:90:05:05 Hours of operation – Exigent circumstances.
44:90:05:06 Fences and greenhouses.
44:90:05:07 Safe application of pesticides and other chemicals used in cultivation–
Training requirements.
44:90:05:08 Application of pesticides.
44:90:05:09 List of approved active ingredients in pesticides.
44:90:05:10 Safety of cannabis -- Use or presence of prohibited pesticides –
Contaminants.
44:90:05:01. Cultivation activities – Compliance with operating procedures.
A cultivation facility must have onsite, whenever establishment agents are present, a principal
officer or other manager with responsibility for ensuring that all activities comply with the
establishment’s operating procedures, including:
1. Propagating and cultivating cannabis plants;
2. Trimming, drying, curing, and storing cannabis;
3. Packaging cannabis, including testing samples;
4. Transporting cannabis to another establishment, including testing samples; and
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5. Maintaining all required records.
Source: __
General Authority: SDCL 34-20G-72(5)(e)
Law Implemented: SDCL 34-20G-9
44:90:05:02. Packaging and labeling cannabis for retail sale.
A cultivation facility may package and label for retail sale in packages of three ounces or less:
1. Cannabis flower and trim; and
2. Pre-rolled cannabis cigarettes, containing only cannabis flower or trim and an unflavored
paper wrapper.
Source: __
General Authority: SDCL 34-20G-72(5)(e)
Law Implemented: SDCL 34-20G-9
44:90:05:03. Cultivation equipment - Safety.
All electrical equipment, including but not limited to growing lights, cultivation equipment and
packaging equipment, must be listed by a nationally recognized testing laboratory.
Source: __
General Authority: SDCL 34-20G-72(5)(e)
Law Implemented: SDCL 34-20G-9
44:90:05:04. Cultivation area.
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Any cultivation of seedlings, immature plants, or mature plants must take place in:
1. An indoor facility meeting all security requirements of this article;
2. One or more greenhouses meeting all security requirements of an indoor facility; or
3. Within a secured fenced in area meeting all security requirements, either outdoors or in
greenhouses not meeting security requirements.
Source: __
General Authority: SDCL 34-20G-72(5)(e)
Law Implemented: SDCL 34-20G-9
44:90:05:05. Hours of operation – Exigent circumstances.
Agents of a cultivation facility may not, outside of the hours of operation stated on the operating
plan of record, plant, feed, water, treat, move, harvest, dry, cure, package, destroy, or dispose
cannabis, except:
1. Under exigent circumstances in which prompt action is necessary to protect inventory from
destruction; and
2. With notice to the department within one business day regarding the character of the
emergent circumstances, the activities to be conducted and the hours during which such
activities will occur.
Source: __
General Authority: SDCL 34-20G-72(5)(e)
Law Implemented: SDCL 34-20G-9
44:90:05:06. Fences and greenhouses.
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1. Any cultivation facility cultivating, processing, or storing cannabis outdoors or in
greenhouses or other structures that do not meet all security requirements for buildings must
secure such cultivation areas with fencing and lighting.
2. Fencing and all gates must be secure, at least six feet high and obscure, or have a cover that
obscures, regulated activities from being readily viewed from outside of the fenced in area.
Source: __
General Authority: SDCL 34-20G-72(5)(c)
Law Implemented: SDCL 34-20G-64
44:90:05:07. Safe application of pesticides and other chemicals used in cultivation–
Training requirements.
1. Any establishment agent who applies a department-approved fungicide, insecticide, or
rodenticide shall hold a current pesticide applicator certification issued by the South Dakota
Department of Agriculture and Natural Resources pursuant to ARSD chapter 12:56:05.
2. Any establishment agent who applies or uses other agricultural chemicals shall have training
in their safe use, including mitigating any risks to humans, animals, or waterways.
Source: __
General Authority: SDCL 34-20G-72(5)(d)
Law Implemented: SDCL 34-20G-72(5)(d)
44:90:05:08. Application of pesticides.
1. The use of a pesticide in the cultivation of cannabis is prohibited unless it:
(A) Is listed in the cultivation facility’s operating procedures filed with the department; and
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(B) Contains only those active ingredients approved by the department pursuant to ARSD
section 44:90:05:11 of this article.
2. An approved pesticide shall be applied only by an establishment agent with a current
pesticide applicator license and only in a manner consistent with the label.
Source: __
General Authority: SDCL 34-20G-72(5)(d)
Law Implemented: SDCL 34-20G-9 and 34-20G-11
44:90:05:09. List of approved active ingredients in pesticides.
1. The following synthetic chemical agents are approved as active ingredients in pesticides
when used in a manner consistent with the label:
(A) Auxin;
(B) Azadirachtin;
(C) Capric acid;
(D) Caprylic acid;
(E) Citric acid;
(F) Copper octoanoate;
(G) Cytokinins;
(H) Diatomaceous earth;
(I) Gibberellic acid;
(J) Horticultural oils;
(K) Hydrogen peroxide;
(L) Indole-3-butyric acid;
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(M) Insecticidal soaps;
(N) Iron phosphate;
(O) Methoprene;
(P) Peroxyacetic acid;
(Q) Petroleum oils;
(R) Phosphorous acid, including salts thereof;
(S) Potassium bicarbonate;
(T) Potassium silicate;
(U) Potassium sorbate;
(V) Sodium bicarbonate;
(W) Sodium ferric EDTA;
(X) Sodium laurel sulfate; and
(Y) Sulfur.
2. The following bacterial or fungal agents are approved as active ingredients in pesticides
when used in a manner consistent with the label:
(A) Bacillus amyloliquefaciens strain D747;
(B) Bacillus subtilis QST;
(C) Bacillus thuringiensis;
(D) Beauveria bassianaa;
(E) Burkholderia spp. Strain A396;
(F) Gliocladium virens;
(G) Harpin alpha beta;
(H) Isaria fumosorosea;
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June 23, 2021
(I) Myrothecium verrucaria;
(J) Reynoutria sachalinensis;
(K) Trichoderma asperellum strain T34; and
(L) Trichoderma harzianum.
3. The following plant extracts are approved as active ingredients in pesticides when used in a
manner consistent with the product label:
(A) Capsaicin;
(B) Castor oil;
(C) Cinnamon oil;
(D) Clove oil;
(E) Corn oil;
(F) Cottonseed oil;
(G) Garlic oil;
(H) Geraniol;
(I) Geranium oil;
(J) Lemongrass oil;
(K) Linseed oil;
(L) Neem oil;
(M) Olive oil;
(N) Peppermint oil;
(O) Pyrethrins;
(P) Rosemary oil;
(Q) Sesame oil;
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(R) Soybean oil; and
(S) Thyme oil.
Source: __
General Authority: SDCL 34-20G-72(5)(d)
Law Implemented: SDCL 34-20G-9
44:90:05:10. Safety of cannabis -- Use or presence of prohibited pesticides – Contaminants.
1. The use or presence at a medical cannabis establishment of any pesticide listing an active
ingredient not on the approved list shall be considered a violation of this article and SDCL
chapter 34-20G.
2. The knowing use or presence at a medical cannabis establishment of any pesticide listing as
an active ingredient a synthetic chemical agent not on the approved list shall be considered a
serious violation of this article and SDCL chapter 34-20G.
3. The knowing use or presence at a medical cannabis establishment of any pesticide listing a
nonsynthetic substance prohibited in organic crop production under 7 CFR section 205.602
(2021) shall be considered a serious violation of this article and SDCL chapter 34-20G.
4. Cannabis shall be considered non usable if it contains detectable levels of any of the
following contaminants:
(A) Residual pesticides unless approved by the department;
(B) Residual solvents other than ethanol, glycerin, propylene glycol, or cooking fats;
(C) Mold, yeast, or mycotoxins;
(D) Coliform bacteria, enterobacteriaceae, e. coli, or salmonella; or
(E) Cadmium, lead, arsenic, or mercury.
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Source: __
General Authority: SDCL 34-20G-72(5)(d) and 34-20G-72(5)(e)
Law Implemented: SDCL 34-20G-9
CHAPTER 44:90:06
CANNABIS TESTING FACILITIES
Section
44:90:06:01 Required Accreditation and Registration – ISO/IEC 17025 – Drug
Enforcement Agency.
44:90:06:02 Adherence to standard operating procedures – Quality control and quality
assurance -- Sample collection.
44:90:06:03 Chain of custody protocols.
44:90:06:04 Mandatory testing for pesticides.
44:90:06:05 Testing of samples by State Public Health Laboratory or another
laboratory.
44:90:06:01. Required Accreditation and Registration – ISO/IEC 17025 – Drug
Enforcement Agency.
1. Prior to July 1, 2024, all cannabis testing facilities must work with an accreditation body to
ensure compliance with applicable rules and ensure progress towards achieving ISO/IEC
17025 accreditation, with a scope of accreditation that includes all analytical tests performed
by the facility.
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2. On or after July 1, 2024, a cannabis testing facility may not accept cannabis or cannabis
products for testing unless the facility is ISO/IEC accredited and the analytical tests to be
performed are within the facility’s scope of accreditation.
3. A cannabis testing facility shall be registered with the Drug Enforcement Agency pursuant to
21 CFR part 1301 (2019).
Source: __
General Authority: SDCL 34-20G-72(5)(k)
Law Implemented: SDCL 34-20G-11
Reference: International Organization for Standardization & International Electrotechnical
Commission. (2018). ISO/IEC 17025:2017: General Requirements for the Competence of
Testing and Calibration Laboratories. https://www.iso.org/standard/66912.html
44:90:06:02. Adherence to standard operating procedures – Quality control and quality
assurance -- Sample collection.
1. A cannabis testing facility shall adhere to its operating procedures, including:
(A) The written procedures for all preanalytical, analytical, and post-analytical processes
(B) Its quality control and quality assurance manual;
(C) Completion of validation studies of all analytical tests to be performed;
(D) Proficiency testing at an interval defined by the accrediting body;
(E) Achieves a passing score on each proficiency test, or in the event of a non-passing score,
completes remediation as defined by the accrediting body; and
(F) A program to assess and document, at least annually, the competency of all technical and
scientific staff that perform preanalytical, analytical, and postanalytical processes.
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2. Each cannabis testing facility shall adopt standard operating procedures for the collection of
samples for testing, which shall address:
(A) Minimum and maximum batch size for cannabis and cannabis products;
(B) Standards for the assignment of batch identifiers and sample identifiers;
(C) Minimum quantity of cannabis and cannabis products needed for each analytical test;
(D) Methodology for collecting material that is representative of the entire batch being tested;
(E) Cleaning, sanitizing, and other methods for preventing sample contamination;
(F) Containers to be used for sample collection, including methods for sealing; and
(G) Prevention of damage or degradation during storage and transport.
Source: __
General Authority: SDCL 34-20G-72(5)(k)
Law Implemented: SDCL 34-20G-11
44:90:06:03. Chain of custody protocols.
1. The chain of custody protocols developed by a cannabis testing facility shall be approved by
the department and must address:
(A) Recording the possession of samples from the time of sampling through destruction;
(B) Retaining for not less than 90 days any residual samples in the container in which the
sample was submitted;
(C) Handling procedures during collection, transport, and testing to avoid loss, damage,
diversion, contamination, or misidentification of samples; and
(D) The use of a chain of custody form that documents the collection, transport, receipt,
testing, and destruction of samples.
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June 23, 2021
2. The chain of custody form shall include the sample location, the number and types of
containers, the mode of collection, the authorized individual who collected the sample, the
date and time of collection, and requested analyses.
Source: __
General Authority: SDCL 34-20G-72(5)(k)
Law Implemented: SDCL 34-20G-11
44:90:06:04. Reporting of test results.
1. The results of any analytical test of cannabis or cannabis products shall be provided to the
cannabis cultivation facility or cannabis cultivation facility in the form of a certificate of
analysis.
2. The cannabis testing facility shall update the inventory tracking system to reflect whether the
analytical test has revealed the presence of any analyte that renders the cannabis or cannabis
products non usable.
Source: __
General Authority: SDCL 34-20G-72(5)(d), 34-20G-72(5)(e), 34-20G-72(5)(h), and 34-20G-
72(5)(k)
Law Implemented: SDCL 34-20G-9, SDCL 34-20G-10, and SDCL 34-20G-11
44:90:06:05. Analytical testing result verification.
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1. Prior to July 1, 2024, all medical Cannabis or Cannabis products tested by state-certified
laboratories shall be subject to routine confirmation testing by the department or department
designee.
(A) Upon request, the laboratory shall submit residual material from samples with complete
testing results to the department or department designee.
(B) The department or department designee will perform testing using an acceptable method
to verify initial results.
(C) Results of confirmation testing will be made available to the originating laboratory, and
(1) If initial testing results are found to be conforming, no additional action will be taken;
(2) If discordant results are encountered, the sample will be subjected to a third and final
round of testing; and
(3) If a third round of testing reveals discordant results, the cannabis testing facility shall
stop all testing of cannabis and cannabis products pending completion of a corrective
action plan approved by the department.
2. On or after July 1, 2024, the department shall not require routine confirmation testing for
analytical tests within the scope of certification for an ISO/IEC 17025 certified cannabis
testing facility, provided the cannabis testing facility:
(A) Participates in a proficiency testing program as defined by the ISO17025 accrediting
body;
(B) Performs proficiency testing at an interval defined by the accrediting body; and
(C) Achieves a passing score on each proficiency test, or in the event of a non-passing score,
completes remediation as defined by the accrediting body.
Source: __
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June 23, 2021
General Authority: SDCL 34-20G-72(5)(k)
Law Implemented: SDCL 34-20G-11 and 34-20G-69
CHAPTER 44:90:07
CANNABIS PRODUCT MANUFACTURING FACILITIES
Section
44:90:07:01 Manufacturing practices.
44:90:07:02 Prohibited manufacturing activities.
44:90:07:03 Extraction – Approved operating procedures.
44:90:07:04 Generally safe extraction methods.
44:90:07:05 Potentially hazardous extraction methods.
44:90:07:06 Extraction using inherently hazardous substances.
44:90:07:07 Edible cannabis products.
44:90:07:01. Manufacturing practices.
1. A cannabis product manufacturing facility must follow standard operating procedures to
ensure workplace, environmental, and product safety, including:
(A) Ensuring that all equipment and surfaces that come into contact with cannabis or other
ingredients are food grade and nonreactive;
(B) Maintaining all counters and surface areas in a manner that reduces the potential for
development of microbials, molds, mildew, fungi and other contaminants;
(C) Providing adequate refrigeration for ingredients and products during manufacture,
storage, or transport;
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(D) Ensuring that all electrical equipment is listed by a nationally recognized testing
laboratory or inspected annually by a professional engineer licensed in South Dakota; and
(E) Storing all chemicals in a safe manner.
2. As applicable, all agents of a cannabis product manufacturing facility must:
(A) Work in an environment with proper ventilation, controlling all sources of ignition where
a flammable atmosphere is or may be present;
(B) Use proper eye protection, respiratory protection and gloves;
(C) Use only water that is potable and ice that is made from potable water; and
(D) Undergo safety training on fire prevention and safe operation of equipment used for
manufacturing.
3. Any cannabis product shall be considered non usable if it contains detectable levels of any of
the following contaminants:
(A) Residual pesticides, unless approved by the department;
(B) Residual solvents other than ethanol, glycerin, propylene glycol, or cooking fats;
(C) Mold, yeast, or mycotoxins;
(D) Coliform bacteria, enterobacteriaceae, e. coli, or salmonella; or
(E) Cadmium, lead, arsenic, or mercury.
Source: __
General Authority: SDCL 34-20G-72(5)(d), 34-20G-72(5)(e) and 34-20G-72(5)(h)
Law Implemented: SDCL 34-20G-10
44:90:07:02. Prohibited manufacturing activities.
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A cannabis product manufacturing facility may not:
1. Manufacture a product in the distinct shape of human, animal, creature, vehicle, fruit, cartoon
character, toy, emoji, or other artwork likely or intended to appeal to anyone under 21 years
of age;
2. Manufacture a cannabis product by adding or infusing cannabis into a commercially
available non-cannabis end product;
3. Manufacture any edible cannabis product that has more than 10 milligrams of THC per
serving;
4. Package in a marketing layer an edible cannabis product with more than 100 milligrams of
total THC;
5. Manufacture a product using cannabis, concentrate, or extract that has not passed any test
declared mandatory by the department;
6. Manufacture cannabis products intended for non-human consumption;
7. Manufacture products that do not contain cannabis on the same premises as cannabis
products; or
8. Extract cannabis using pressurized canned flammable fuel, including butane or propane in
containers intended for camp stoves, handheld torch devices, refillable cigarette lighters, or
similar consumer products.
Source: __
General Authority: SDCL 34-20G-72(5)(g)
Law Implemented: SDCL 34-20G-10
44:90:07:03. Extraction – Approved operating procedures.
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1. A cannabis product manufacturing facility must conform with the standard operating
procedures for extraction methods described in its operating procedures and shall not extract
cannabis using any other methods without prior written approval by the department.
2. A cannabis product manufacturing facility performing extraction may be subject to
inspection by the state fire marshal, local fire department, building inspector or code
enforcement officer to confirm that no health or safety concerns are present, and that the
facility complies with all applicable safety standards contained in local ordinance, SDCL
chapter 11-10, ARSD article 61:15, and ARSD chapter 20:44:22.
Source: __
General Authority: SDCL 34-20G-72(5)(g)
Law Implemented: SDCL 34-20G-10
44:90:07:04. Generally safe extraction methods.
The following methods of extraction are permissible if listed in the establishment’s operating
procedures on file with the department:
1. Mechanical extraction using:
(A) Potable water and ice made from potable water;
(B) Dry screening or sieving;
(C) Cryogenic or subzero processing not involving a solvent; and
(D) Pressure and temperature.
2. Infusion of cannabis in food grade fats or synthetic food additives:
(A) Propylene glycol;
(B) Glycerin; and
(C) Butter, olive oil, or other typical cooking fats.
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Source: __
General Authority: SDCL 34-20G-72(5)(g)
Law Implemented: SDCL 34-20G-10
44:90:07:05. Potentially hazardous extraction methods.
The department will permit extraction using the following substances, if 99 percent or greater in
purity and if the department deems storage, preparation, electrical, gas monitoring, fire
suppression, and exhaust systems methods to be adequate:
1. Carbon dioxide;
2. Another liquid chemical, compressed gas, or commercial product that has a flashpoint above
100 degrees Fahrenheit; or
3. Ethanol, including solutions of ethanol and water;
Source: __
General Authority: SDCL 34-20G-72(5)(g)
Law Implemented: SDCL 34-20G-10
44:90:07:06. Extraction using inherently hazardous substances.
1. Extraction using an inherently hazardous substance requires prior physical inspection and
written approval by a professional engineer licensed in South Dakota that the establishment’s
storage, preparation, electrical, gas monitoring, fire suppression, and exhaust systems are
adequate.
2. Any extraction method using inherently hazardous substances must be listed in the operating
procedures on file with the department and use an agent of 99 percent or greater purity.
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3. The resulting extract shall not exceed residual limits for the solvent established by the
department as part of testing requirements.
4. The following solvents may be used in approved inherently hazardous extraction:
(A) Butane;
(B) Propane;
(C) Acetone;
(D) Heptane; or
(E) Pentane.
5. Any other inherently hazardous substance shall be approved only upon written application to
the Department explaining the safety and efficacy of the selected method.
6. All flammable gas must be odorized in compliance with state and federal regulations.
Source: __
General Authority: SDCL 34-20G-72(5)(g)
Law Implemented: SDCL 34-20G-10
44:90:07:07. Edible cannabis products.
A cannabis product manufacturing facility that has declared edible cannabis products as part of
their operating plan of record must:
1. Obtain a South Dakota food service establishment license, pursuant to SDCL chapter 34-18,
covering ongoing activities at the location identified in the operating plan;
2. Employ a Certified Food Service Manager meeting department specifications;
3. Comply with all applicable standards of ARSD 44:02:07, and the city or county in which the
establishment is located.
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Source: __
General Authority: SDCL 34-20G-72(5)(g)
Law Implemented: SDCL 34-20G-10
CHAPTER 44:90:08
CANNABIS DISPENSARIES
Section
44:90:08:01 Preventing unauthorized access – Age verification.
44:90:08:02 Preventing unauthorized sales – Training requirements.
44:90:08:01. Preventing unauthorized access – Age verification.
1. No dispensary shall allow entry into areas containing cannabis without first identifying an
individual as a cardholder or other person authorized pursuant to ARSD 44:90:04:14.
2. No dispensary shall allow entry to a patient who is under 21 years of age.
3. Acceptable methods of controlling access include:
(A) Verification at an external cashier window or ticket window, followed by unlocking an
exterior door to admit the individual into the building;
(B) Verification at a cashier window or ticket window located in an entryway with a locked
interior door that prevents access to any area containing cannabis, followed by unlocking
the interior door; and
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(C) Verification by an agent outside a locked exterior or interior door, followed by unlocking
the door.
4. Verification shall not take place in any area in which a person may access cannabis without
passing through a lockable door.
5. Any website or mobile application developed or hosted by an establishment shall:
(A) Include verification that the visitor is 21 years of age or older;
(B) Require the cardholder’s or nonresident cardholder’s registry identification number for
verification of any online purchases; and
(C) Limit online sales to cardholders and nonresident cardholders who previously have made
a purchase of cannabis or cannabis products at the dispensary.
Source: __
General Authority: SDCL 34-20G-72(5)(c)
Law Implemented: SDCL 34-20G-64
44:90:08:02. Preventing unauthorized sales – Training requirements.
Before interacting with any cardholder, all employees of a dispensary shall be trained to:
1. Determine the authenticity of registry identification cards, including temporary registry
identification cards and nonresident registration credentials;
2. Ensure that the person presenting a temporary or department-issued registry identification
card or nonresident registration credential is the authorized cardholder;
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3. Use the verification system, including all options for accessing the system by phone, point-
of-sale software, or mobile application;
4. Track the amount of cannabis dispensed for a patient’s use, including consolidating the
amounts in sales to the patient and the patient’s caregiver; and
5. Verify that the dispensary has been designated to make sales to the patient or the patient’s
designated caregiver.
Source: __
General Authority: SDCL 34-20G-72(5)(g)
Law Implemented: SDCL 34-20G-70 and 34-20G-71
CHAPTER 44:90:09
SAMPLING AND TESTING
44:90:09:01 Mandatory testing prior to transfer.
44:90:09:02 Creation of batches – Collection of samples.
44:90:09:03 Packaging of samples for testing.
44:90:09:01. Mandatory testing prior to transfer.
1. No cannabis or cannabis products shall be transferred by a cannabis cultivation facility or
cannabis product manufacturing facility to a cannabis product manufacturing facility or
cannabis dispensary unless:
(A) A cannabis testing facility has tested the cannabis or cannabis product and determined it
to be in compliance with this article; and
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(B) The cannabis or cannabis product is accompanied by a certificate of analysis issued by
the cannabis testing facility.
2. Except samples for testing, any cannabis or cannabis products transferred from a cannabis
cultivation facility or a cannabis product manufacturing facility without a certificate of
analysis shall be considered non usable.
3. A cannabis product manufacturing facility or cannabis dispensary shall maintain the
certificate of analysis for any cannabis or cannabis product for 180 days or until all of the
cannabis or cannabis product has been transferred or disposed of, whichever is later.
4. The licensee submitting the cannabis or cannabis product for testing shall pay all fees
associated with this testing.
Source: __
General Authority: SDCL 34-20G-72(5)(d) and 34-20G-72(5)(e)
Law Implemented: SDCL 34-20G-9, 34-20G-10, and 34-20G-11
44:90:09:02 Creation of batches -- Collection of samples.
1. A cannabis cultivation facility or cannabis product manufacturing facility must:
(A) Divide cannabis or cannabis products into batches as directed by a registered cannabis
testing facility; and
(B) Assign a unique batch identifier to the cannabis or cannabis product.
2. When cannabis is harvested or trimmed:
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(A) Cannabis flower shall be assigned to a batch containing a single strain from single harvest
date; and
(B) Cannabis trim may be assigned to a batch containing multiple strains and from multiple
trimming dates.
3. A cannabis cultivation facility or cannabis product manufacturing facility must submit for
laboratory testing at minimum one sample from of each batch of cannabis or cannabis
product or as directed by the cannabis testing facility based on batch size.
4. All collections of samples for testing to be performed by a cannabis testing facility shall be
performed by an agent of either the testing facility or the establishment submitting the
sample.
5. The collection of samples shall comply in all manner with the testing facility’s standard
operating procedures.
Source: __
General Authority: SDCL 34-20G-72(5)(k)
Law Implemented: SDCL 34-20G-11
44:90:10:03. Packaging of samples for testing.
All samples of cannabis, cannabis extracts, or cannabis products shall be transferred to a testing
facility in sealed, child-resistant, and tamper-evident containers that are supplied by a testing
facility or that meet criteria specified by a testing facility.
Source: __
General Authority: SDCL 34-20G-72(5)(k)
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Law Implemented: SDCL 34-20G-11
44:90:10:04. Receipt of results.
1. Upon receipt of a certificate of analysis indicating that cannabis or cannabis products comply
with SDCL chapter 34-20G and this article, the cannabis cultivation facility or cannabis
product manufacturing facility may transfer the cannabis or cannabis products to another
establishment, subject to this article.
2. Upon receipt of a certificate of analysis indicating that cannabis or cannabis products are non
usable, the cannabis or cannabis shall not be transferred and may be subject to destruction
according to this article.
CHAPTER 44:90:10
PACKAGING, LABELING, AND ADVERTISING
Section
44:90:10:01 Packaging for transfer or sale - General requirements.
44:90:10:02 Packaging for retail sale – General requirements.
44:90:10:03 Packaging of cannabis flower or trim or inhaled cannabis products for
retail sale.
44:90:10:04 Packaging of edible cannabis products for retail sale - Tinctures, oils, and
beverages excluded.
44:90:10:05 Packaging of cannabis tinctures and oils for retail sale.
44:90:10:06 Packaging of cannabis beverages for retail sale.
44:90:10:07 Packaging of topical cannabis products for retail sale.
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44:90:10:08 Labeling required.
44:90:10:09 Format of labeling – Font size – Multiple labels.
44:90:10:10 Labeling claims – Results of testing.
44:90:10:11 Expected effects – Time to take effect – Duration of effect.
44:90:10:12 Ingredients – Allergen warnings.
44:90:10:13 Contents – Net weight or volume -- Nutritional information.
44:90:10:14 Required warnings – Indication that edible product contains cannabis –
Side effects – Legal status of cannabis.
44:90:10:15 Identifying information – Establishment identification number – Batch --
Dates.
44:90:10:16 Labeling prohibitions.
44:90:10:17 Prohibited forms of advertising.
44:90:10:18 Target audience – Establishments and adult cardholders only – Prohibition
on advertising to practitioners.
44:90:10:19 Prohibited content – Advertisements.
44:90:10:20 Required information.
44:90:10:21 Nonconforming advertising.
44:90:10:01. Packaging for transfer or sale -- General requirements.
1. All cannabis or cannabis products must be packaged for transfer or sale in containers that:
(A) Are fully enclosable;
(B) Are resealable;
(C) Protect the packaged item from contamination; and
(D) Do not impart any toxic or deleterious substance to the packaged item.
2. A cultivation facility shall package all flower, trim, or pre-rolled cigarettes for retail sale
before transfer to a dispensary.
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3. A cannabis product manufacturing facility shall package all cannabis products for retail sale
before transfer to a dispensary.
Source: __
General Authority: SDCL 34-20G-72(5)(j)
Law Implemented: SDCL 34-20G-9 and 34-20G-10
44:90:10:02. Packaging for retail sale – General requirements.
1. A dispensary must transfer any cannabis, cannabis concentrate, or cannabis products to the
patient or caregiver in packaging that is:
(A) Child-resistant in compliance with compliant with 16 CFR part 1700 (2020);
(B) Tamper-evident, using a sealing method that provides clear, lasting evidence that the
packaged has previously been opened;
(C) Resealable, except for single-serving cannabis products; and
(D) Opaque.
2. Unless otherwise specified by this article, each packaging requirement may be met either by
the container provided by the cultivation facility or cannabis product manufacturing facility
or by exit packaging supplied by the dispensary at the time of sale.
Source: __
General Authority: SDCL 34-20G-72(5)(j)
Law Implemented: SDCL 34-20G-8, 34-20G-9, and 34-20G-10
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44:90:10:03. Packaging of cannabis flower or trim or inhaled cannabis products for retail
sale.
Cannabis flower or trim or an inhaled cannabis product shall be transferred by a dispensary only
in a container that is fully enclosed on all sides, as follows:
1. If the container is soft sided, it must be four mil or greater in thickness; or
2. If container has rigid sides, it must have a lid or enclosure that can be placed tightly and
securely on the container.
Source: __
General Authority: SDCL 34-20G-72(5)(j)
Law Implemented: SDCL 34-20G-9 and 34-20G-10
44:90:10:04. Packaging of edible cannabis products for retail sale -- Tinctures, oils, and
beverages excluded.
1. Single-serving edible cannabis products:
(A) Shall be placed into a child-resistant container that may or may not be resealable; and
(B) May be bundled into a larger marketing layer so long as the total amount of active THC
per marketing layer does not exceed 100 milligrams.
2. Multiple-serving edible cannabis products:
(A) Shall either be placed into either a resealable container or with individual servings heat-
sealed into packaging made of plastic four mil or greater in thickness with no easy-open
tab, dimple, corner or flap;
(B) Shall contain 100 milligrams or less of total THC per multiple-serving container; and
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(C) Shall clearly indicate the size of a serving if the edible product is not in a form that
indicates a serving.
Source: __
General Authority: SDCL 34-20G-72(5)(j)
Law Implemented: SDCL 34-20G-9 and 34-20G-10
44:90:10:05. Packaging of cannabis tinctures and oils for retail sale.
1. A cannabis tincture or oil shall be packaged in a glass or plastic vial, either:
(A) With a resealable child-resistant cap; or
(B) With a resealable cap and enclosed in a child-resistant soft-sided container made of
plastic four mil or greater in thickness and heat sealed.
2. The packaging shall include a measuring device such as a measuring cap or dropper. Hash
marks on the bottle or package do not qualify as a measuring device.
Source: __
General Authority: SDCL 34-20G-72(5)(j)
Law Implemented: SDCL 34-20G-9 and 34-20G-10
44:90:10:06. Packaging of cannabis beverages for retail sale.
1. Single-serving cannabis beverages that do not contain more than 10 milligrams of THC shall
be packaged in:
(A) A child-resistant container; or
(B) A metal can with a stay tab mechanism opening; or
(C) A glass bottle with a cork or metal crown style bottle cap.
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2. Multiple-serving cannabis beverages that contain more than 10 milligrams of THC but no
more than 100 milligrams of THC shall:
(A) Be packaged in a child-resistant container that has a resealing cap or closure; and
(B) Include a measuring device such as a measuring cap or dropper; hash marks on the bottle
or package do not qualify as a measuring device.
3. Cannabis beverages packaged according to this section may be bundled into a larger
marketing layer so long as the total amount of THC per marketing layer does not exceed 100
milligrams.
Source: __
General Authority: SDCL 34-20G-72(5)(j)
Law Implemented: SDCL 34-20G-9 and 34-20G-10
44:90:10:07. Packaging of topical cannabis products for retail sale.
1. Salves, creams, lotions and balms shall be packaged in a child-resistant container that has a
resealing cap or closure compliant with 16 CFR part 1700 (2020).
2. Transdermal patches shall be packaged in a plastic four mil or greater in thickness to prevent
unintended access to and ingestion by children or pets and be heat sealed with no easy-open
tab, dimple, corner or flap, as to make it difficult for a child to open.
Source: __
General Authority: SDCL 34-20G-72(5)(j)
Law Implemented: SDCL 34-20G-9 and 34-20G-10
44:90:10:08. Labeling required.
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1. All cannabis, cannabis extract, and cannabis products shall be labeled in accordance with this
chapter before sale or transfer to the patient or caregiver.
(A) Prior to transferring cannabis to a dispensary, a cultivation facility must label the
marketing layer of each container.
(B) Prior to transferring cannabis products to a dispensary, a cannabis product manufacturing
facility must label each the marketing layer of each container.
2. Unless otherwise specified, all required information may be printed directly on, or printed on
a sticker attached to the marketing layer of the cannabis, cannabis extract, or cannabis
product.
Source: __
General Authority: SDCL 34-20G-72(7)
Law Implemented: SDCL 34-20G-9 and 34-20G-10
44:90:10:09. Format of labeling – Font size – Multiple labels.
All required information shall be printed clearly in English in type no smaller than 6-point font
(1/12 inch). An establishment may affix an extendable, accordion-style, label, layered label, or
multiple labels to the marketing layer, provided none of the required information is obstructed
and the label can be easily identified by a patient or caregiver as containing important
information.
Source: __
General Authority: SDCL 34-20G-72(7)
Law Implemented: SDCL 34-20G-9 and 34-20G-10
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44:90:10:10. Labeling claims -- Results of testing.
1. The results of any testing mandated by the department shall be included on the label of any
cannabis or cannabis product.
2. No label shall contain claims regarding cannabinoid potency or the absence of microbials,
metals, solvents, or pesticides except to list the results of analytical tests performed by a
registered cannabis testing facility.
Source: __
General Authority: SDCL 34-20G-72(7)
Law Implemented: SDCL 34-20G-9 and 34-20G-10
44:90:10:11. Expected effects – Time to take effect – Duration of effect.
1. The label of any cannabis or cannabis product shall indicate:
(A) The length of time, in hours or minutes, that it may take the patient to feel effects; and
(B) The length of time the patient should expect the effects to last.
2. The estimated time to take effect and duration of effect shall be based on the best
estimate of the establishment printing the label.
3. All edible products, except ethanol-based tinctures, shall additionally contain the
following warning: “Effects of this product may not be felt for up to 4 hours.”
Source: __
General Authority: SDCL 34-20G-72(7)(a)
Law Implemented: SDCL 34-20G-9 and 34-20G-10
44:90:10:12. Ingredients – Allergen warnings.
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1. The label of any cannabis or cannabis product shall identify any pesticides used in
cultivation.
2. The label of any cannabis product shall list all ingredients and, if applicable, gases, solvents,
or other chemicals used in extraction.
3. The label of any edible cannabis product shall identify any major allergens contained in the
product in accordance with 21 USC section 343 (2021), including milk, eggs, fish, crustacean
shellfish, tree nuts, peanuts, wheat and soybeans.
Source: __
General Authority: SDCL 34-20G-72(7)(c)
Law Implemented: SDCL 34-20G-9 and 34-20G-10
44:90:10:13. Contents – Net weight or volume -- Nutritional information.
1. The label’s statement of net contents shall identify the net weight or volume of the cannabis,
cannabis extract, or cannabis product, expressed:
(A) If a solid, in both ounces and grams/milligrams; or
(B) If a liquid or colloid, in both fluid ounces and milliliters.
2. The label of any cannabis product shall state the equivalent cannabis weight, calculated
according to the equivalent cannabis weight table included in section 44:90:02:10 of this
article.
3. The label of any edible cannabis product shall identify the size, expressed in ounces and
grams/milligrams, fluid ounces or millimeters, or number of pieces, of a serving providing 10
mg of THC and the number of servings per marketing layer;
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4. The label of vaporizing cartridges, pens, and topical cannabis products shall be expressed in
the weight of concentrate used to manufacture the product within the marketing layer in
milligrams or grams and ounces.
5. Any edible cannabis product shall be labeled with a nutritional fact panel in accordance with
21 CFR part 101 (2018).
Source: __
General Authority: SDCL 34-20G-72(7)
Law Implemented: SDCL 34-20G-9 and 34-20G-10
44:90:10:14. Required warnings -- Indication that edible product contains cannabis – Side
effects – Legal status of cannabis.
1. The department shall design a standard symbol that indicates an item contains cannabis or
cannabis extract, which shall be used by all registered establishments.
2. This standard symbol shall appear on the front or most predominantly displayed area of the
marketing layer of an edible cannabis product, no smaller than 1/2 inch by 1/2 inch.
3. All cannabis and cannabis products shall carry the following warning statement in no smaller
than 6-point font: “For medical use by qualifying patients only. There may be health risks
associated with the use of this product. There may be additional health risks associated with
the use of this product for women who are pregnant, breastfeeding, or planning on becoming
pregnant. Do not drive a motor vehicle or operate heavy machinery while using this product.”
Source: __
General Authority: SDCL 34-20G-72(7)(d)
Law Implemented: SDCL 34-20G-9 and 34-20G-10
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44:90:10:15. Identifying information – Establishment identification number – Batch --
Dates.
The container or exit packaging for any cannabis or cannabis product sold by a dispensary shall
identify:
1. The registration number of any cultivation facility, cannabis product manufacturing facility,
or dispensary involved in the cultivation, processing, or sale of the item;
2. Batch numbers;
3. Cultivation date of cannabis flower or trim; and
4. Production date of cannabis products
Source: __
General Authority: SDCL 34-20G-72(7)(d)
Law Implemented: SDCL 34-20G-9 and 34-20G-10
44:90:10:16. Labeling prohibitions.
No label shall:
1. Include representations as to cannabinoid content or to the absence of pesticides, mold, or
other contaminants, other than to provide the results of analysis performed by a testing
laboratory certified in accordance with this article;
2. Make claims regarding health or physical benefits to the consumer;
3. Include any false or misleading statements;
4. Obscure identifying information or warning statements;
5. Use any trademark without authorization;
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6. Depict a human, animal, creature, vehicle, fruit, cartoon character, toy, emoji, or other
artwork likely or intended to appeal to anyone under 21 years of age;
7. Include the word “candy” or “candies”; or
8. Refer to any item typically marketed to persons under 21 years of age.
Source: __
General Authority: SDCL 34-20G-72(7)(d)
Law Implemented: SDCL 34-20G-9 and 34-20G-10
44:90:10:17. Prohibited forms of advertising.
No establishment shall advertise:
1. On a sign or billboard, except that a dispensary may advertise on signs on its own premises;
2. By distributing handbills in public areas or on publicly owned property;
3. Through direct mail, phone, text, or email without verifying the recipient is a cardholder or
medical cannabis establishment and offering a permanent opt-out feature;
4. On television or radio;
5. Through a practitioner or health care facility, including placement of advertising material
onsite or targeting their patients through direct mail, phone, text, or email.
Source: __
General Authority: SDCL 34-20G-72(5)(i)
Law Implemented: SDCL 34-20G-33 and 34-20G-78
44:90:10:18. Target audience – Establishments and adult cardholders only – Prohibition on
advertising to practitioners.
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1. Advertisements shall be targeted as directly as possible to:
(A) Other establishments;
(B) Cardholders who are 21 years of age or older; and
(C) Readers of medical publications.
2. Advertisements may not target:
(A) Non-cardholders, including:
(1) Suggesting a medical evaluation; or
(2) Interacting with the public at events sponsored by the establishment;
(B) Anyone under the age of 21, including:
(1) Depicting anyone under 21 years of age; or
(2) Using cartoons, toys, or other products or images commonly associated with or
marketed to individuals under 21 years of age; or
(C) Practitioners or health care facilities, other than advertising in medical publications.
3. Any advertising on websites, social media, or mobile applications shall include:
(A) A verification that the recipient is a cardholder 21 years of age or older; and
(B) A permanent opt-out feature.
Source: __
General Authority: SDCL 34-20G-72(5)(i)
Law Implemented: SDCL 34-20G-33, 34-20G-74 and 34-20G-78
44:90:10:19. Prohibited content – Advertisements.
No advertisement for a medical cannabis establishment shall:
1. Make deceptive, false or misleading statements;
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2. Make claims related to potency (beyond listing of cannabinoid content verified by a testing
facility);
3. Depict consumption of cannabis or cannabis products;
4. Depict pregnancy, breastfeeding, or operating a motorized vehicle, boat or machinery;
5. Depict or refer to candy or a specific type of candy;
6. Use a trademark associated with a non-cannabis product, including parody or other use that
has similarity to the original;
7. Encourage the transportation of cannabis across state lines or otherwise encourage illegal
activity;
8. Assert that cannabis is safe because it is regulated by the department, tested by a testing
facility, or otherwise endorsed by any government agency;
9. Make claims that cannabis has curative or therapeutic effects;
10. Claim any health or physical benefits; or
11. Encourage excessive or rapid consumption.
Source: __
General Authority: SDCL 34-20G-72(5)(i)
Law Implemented: SDCL 34-20G-7
44:90:10:20. Required information.
Any advertisement shall contain the following information:
1. A statement “For medical use by qualifying patients only”; and
2. The medical cannabis establishment identification number.
Source: __
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General Authority: SDCL 34-20G-72(5)(i)
Law Implemented: SDCL 34-20G-7
44:90:10:21. Nonconforming advertising.
1. Any nonconforming advertising shall be considered a violation of this article and SDCL
chapter 34-20G.
2. Upon notification by the department, the establishment shall cease the nonconforming
advertisements and remove any nonconforming advertising from websites, social media,
mobile applications, or signs.
3. Failure to cease or remove the advertising within 48 hours shall be considered a serious and
knowing violation of this article and SDCL chapter 34-20G.
Source: __
General Authority: SDCL 34-20G-72(5)(i)
Law Implemented: SDCL 34-20G-80
CHAPTER 44:90:11
RECORDKEEPING
Section
44:90:11:01 Inventory tracking system – Required use.
44:90:11:02 Retention of records – Electronic and paper – Amended records.
44:90:11:03 Daily inventory record.
44:90:11:04 Daily transfer record.
44:90:11:05 Daily testing sample record.
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44:90:11:06 Cultivation facility inventory records – Additional requirements.
44:90:11:07 Cannabis product manufacturing facility inventory records – Additional
requirements.
44:90:11:08 Testing facility inventory records – Additional requirements.
44:90:11:09 Dispensary inventory records – Additional requirements.
44:90:11:10 Daily transaction record.
44:90:11:11 Department access to and use of establishment records.
44:90:11:01. Inventory tracking system – Required use.
Establishments are required to use an electronic inventory tracking system prescribed by the
department to create all required inventory records, transfer records, testing sample records, and
transaction records.
Source: __
General Authority: SDCL 34-20G-72(5)(b)
Law Implemented: SDCL 34-20G-63
44:90:11:02. Retention of records -- Electronic and paper – Amended records.
1. A cannabis establishment must maintain, for a minimum of 18 months, records to enable the
department to identify and prevent diversion of cannabis and to protect patients from unsafe
cannabis and cannabis products, including:
(A) All point of sale records, whether in electronic or paper form;
(B) Transport manifests; and
(C) Daily inventory records, transfer records, testing sample records, and transaction records.
2. No inventory record, transfer record, testing sample record, or transaction record shall be
altered after the date on which it was created.
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3. If necessary, an amended inventory record, transfer record, testing sample record, or
transaction record may be created, but the original record shall be subject to record retention
requirements.
Source: __
General Authority: SDCL 34-20G-72(5)(b)
Law Implemented: SDCL 34-20G-63
44:90:11:03. Daily inventory record.
1. A cannabis establishment must maintain and update by midnight each day of operation, an
electronic record of the establishment’s inventory of cannabis, including seeds, seedlings,
plants, extracts, products, and waste.
2. The inventory record shall use the following units of measure:
(A) Seeds, seedlings, and plants shall be quantified in whole numbers;
(B) Quantities of cannabis flower, trim, extracts, or pre-rolled cannabis cigarettes shall be
expressed in grams and ounces;
(C) Quantities of edible cannabis products shall be expressed in whole numbers of servings,
each providing 10 mg of THC;
(D) Quantities of vaporizing cartridges, pens, and transdermal patches shall be expressed in
the number of marketing layers and the net weight of concentrate per marketing layer in
milligrams.
(E) Quantities of topical cannabis products other than transdermal patches shall be expressed
in the number of marketing layers and the net volume of the topical product in fluid
ounces.
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3. The inventory record shall reflect:
(A) The destruction of cannabis or disposal of cannabis waste;
(B) Theft or other loss; and
(C) Data from the transfer record.
4. The inventory record shall be maintained securely and shall not identify any cardholder other
than by the cardholder’s identification number.
Source: __
General Authority: SDCL 34-20G-72(5)(b)
Law Implemented: SDCL 34-20G-63
44:90:11:04. Daily transfer record.
1. A cannabis establishment must maintain and update by midnight, an electronic record of all
cannabis, including any seeds, plants, extracts, or products, obtained from a cardholder or
another establishment, and all cannabis transferred to another establishment.
2. The transfer record shall use the same units of measure as the inventory record.
3. The transfer record shall reflect all transport manifests.
4. The transfer record shall be maintained securely and shall not identify any cardholder except
by the cardholder’s identification number.
Source: __
General Authority: SDCL 34-20G-72(5)(b)
Law Implemented: SDCL 34-20G-63
44:90:11:05. Daily testing sample record.
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1. A cannabis establishment must maintain and update by midnight, an electronic testing
sample record, including:
(A) The batch identifier and quantity of each batch from which samples were drawn;
(B) The sample identifier of each sample created, its quantity, and the batch identifier
associated with the sample;
(C) The tests to be performed; and
(D) Test results, including a note of whether the testing facility has indicated the batch is safe
or unsafe for transfer to another establishment.
2. The quantity of each batch and each sample shall be expressed in the same units as the
inventory record.
Source: __
General Authority: SDCL 34-20G-72(5)(b)
Law Implemented: SDCL 34-20G-63
44:90:11:06. Cultivation facility inventory records – Additional requirements.
1. The inventory record of a cultivation facility shall include a unique identifier for each
seedling or plant greater than 12 inches in height, which shall also be printed on a tag or label
affixed to the growing container or a tag around the plant’s stalk.
2. The inventory record shall be updated each time:
(A) A seedling exceeds its size limit and is considered a plant;
(B) A plant flowers for the first time;
(C) A plant is trimmed or harvested;
(D) A testing batch is created; or
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(E) Cannabis is packaged for retail sale.
3. The record for a testing batch must indicate the unique identifier for each plant used to
produce the batch.
4. The record for cannabis packaged and labeled for transfer to a dispensary shall include the
number of marketing layers and the quantity of cannabis in each marketing layer, as
expressed according to the relevant labeling requirement.
Source: __
General Authority: SDCL 34-20G-72(5)(b)
Law Implemented: SDCL 34-20G-63 and 34-20G-88
44:90:11:07. Cannabis product manufacturing facility inventory records – Additional
requirements.
1. The inventory record of a cannabis product manufacturing facility shall include the batch
identification number of each testing batch of cannabis obtained from a cultivation facility.
2. The inventory record shall be updated each time:
(A) A quantity of extract or concentrated cannabis is made from cannabis flower or trim;
(B) A quantity of cannabis product is made from concentrated cannabis, cannabis extract,
flower, or trim; or
(C) A quantity of cannabis product is packaged for retail sale.
3. Any extract must be assigned to a testing batch, which shall:
(A) Consist only of extract produced on a single day using the same extraction method; and
(B) Be entered into the inventory record with the identifier of any testing batch of cannabis
from which it was produced.
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4. Any cannabis product must be assigned to a testing batch, which shall:
(A) Consist only of a single type of product produced on a single day; and
(B) Be entered into the inventory record with the identifier or any testing batch of cannabis or
cannabis extract from which it was produced.
5. The record for cannabis extracts or products packaged and labeled for transfer to a dispensary
shall include the testing batch identifier, the number of marketing layers, and the quantity of
cannabis in each marketing layer, as expressed according to the relevant labeling
requirement.
Source: __
General Authority: SDCL 34-20G-72(5)(b)
Law Implemented: SDCL 34-20G-63 and 34-20G-88
44:90:11:08. Testing facility inventory records – Additional requirements.
1. A testing facility shall maintain and update by midnight each day of operation, an inventory
record of:
(A) All samples in its possession, with unique identifiers and quantities expressed in units
specified in its operating procedures; and
(B) All other cannabis, cannabis extracts, and cannabis products acquired for training or
reference purposes;
2. The inventory record shall reflect:
(A) The quantity of each sample rendered unusable by testing;
(B) The quantity of each sample returned to the establishment;
(C) The quantity of each sample destroyed or disposed of; and
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(D) The quantity of any sample lost, stolen, or otherwise unaccounted for.
Source: __
General Authority: SDCL 34-20G-72(5)(b)
Law Implemented: SDCL 34-20G-63 and 34-20G-88
44:90:11:09. Dispensary inventory records – Additional requirements.
1. The inventory record of a dispensary shall include all cannabis, cannabis extracts, and
cannabis products, including the type of product, the testing batch identifier, the number of
marketing layers, and the quantity of cannabis in each marketing layer, as expressed
according to the relevant labeling requirement.
2. The inventory record shall be updated each day of operation to reflect:
(A) Any cannabis, cannabis extracts, or cannabis products received from another
establishment;
(B) Sales to qualifying cardholders, which shall include the cardholder’s identification
number;
(C) Returns of merchandise from cardholders, whether to be resold, returned to another
establishment, or destroyed;
(D) Transfers to another establishment, including returns; and
(E) Destruction of cannabis.
Source: __
General Authority: SDCL 34-20G-72(5)(b)
Law Implemented: SDCL 34-20G-63 and 34-20G-88
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44:90:11:10. Daily transaction record.
1. A dispensary shall maintain and shall update by midnight each day of operation, a transaction
record, which shall include:
(A) The type of product, the testing batch identifier, the number of marketing layers, and the
quantity of cannabis in each marketing layer, as expressed according to the relevant
labeling requirement, for each sale or return; and
(B) The cardholder identification number associated with each quantity.
2. The transaction record shall contain no other identifying information relating to a cardholder.
Source: __
General Authority: SDCL 34-20G-72(5)(b)
Law Implemented: SDCL 34-20G-63 and 34-20G-71
44:90:11:11. Department access to and use of establishment records.
1. The department’s agents:
(A) Shall have access to all records, including transport manifests during an inspection of an
establishment or vehicle, or in response to a written or telephone inquiry.
(B) May compare inventory onsite or in delivery vehicles to the establishment’s inventory
records.
(C) May compare transport manifests or observed deliveries to the establishment’s transfer
records.
2. Upon the discovery of any inconsistencies in the establishment’s record-keeping, the
department shall:
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(A) Make a determination of whether the inconsistences are knowing or negligent;
(B) Inform the establishment in writing of its findings;
(C) If applicable, initiate suspension or revocation proceedings; and
(D) If applicable, refer possible criminal violations to state and local law enforcement.
Source: __
General Authority: SDCL 34-20G-72(5)(b)
Law Implemented: SDCL 34-20G-63 and SDCL 34-20G-88
CHAPTER 44:90:12
ENFORCEMENT
Section
44:90:12:01 Department inspection of establishments – Corrective action plan.
44:90:12:02 Suspension or revocation of registration certificates for serious violations.
44:90:12:03 Suspension or revocation of a registration certificate for multiple
violations.
44:90:12:04 Voluntary surrender of registration certificate.
44:90:12:05 Revocation of registry identification card for unauthorized sale.
44:90:12:06 Revocation of registry identification card for serious or multiple
violations.
44:90:12:01. Department inspection of establishments – Corrective action plan.
1. Agents of the department may conduct routine, unannounced inspections and inspections in
response to complaints.
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2. Agents of the department:
(A) Must present identification before commencing an inspection of an establishment;
(B) Shall have complete and unrestricted access to establishments during business hours or
when establishment agents are present for the purposes of inspections, sample collection,
testing, interviews, or other investigations;
(C) May collect samples of cannabis and cannabis products and perform analytical tests on
those samples or submit them to a cannabis testing facility for testing;
(D) May inspect the contents of any vehicle used by an establishment to transport cannabis,
cannabis extracts, or cannabis products, examine the manifest; and
(E) Shall have access to inventory records and certificates of analysis maintained by the
establishment, including collecting paper or electronic copies for further review.
3. The department shall provide an establishment the results of any analytical tests performed
on samples taken from the establishment and shall inform the establishment whether the
cannabis or cannabis products from which the samples were taken are non usable;
4. Upon the discovery of suspected violations of this article or SDCL chapter 34-20G, agents of
the department may order the establishment to comply with a corrective action plan, which
may include:
(A) Modifying operating procedures to comply with this article and SDCL chapter 34-20G;
(B) Halting transfer of cannabis or cannabis products that are mislabeled or otherwise pose a
threat to public health; and
(C) Destroying or remediating cannabis or cannabis products that pose a threat to public
health.
Source: __
General Authority: SDCL 34-20G-72(6)
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Law Implemented: SDCL 34-20G-69
44:90:12:02. Suspension or revocation of registration certificates for serious violations.
1. The department may, pursuant to SDCL chapter 1-26 and SDCL 34-20G-81, suspend for up
to six months or revoke a registration certificate for any knowing violation of this article or
SDCL chapter 34-20G that involves dishonesty, diversion, or threat to public health or safety,
including knowingly:
(A) Selling or otherwise transferring cannabis in exchange for anything of value to a person
other than a cardholder, a nonresident cardholder, or to a medical cannabis establishment
or its agent;
(B) Making a false statement to a law enforcement official;
(C) Sharing confidential information about a cardholder for monetary gain or to cause harm
to the cardholder;
(D) Submitting false records or documentation required by the department to certify a
medical cannabis establishment;
(E) Failing to meet obligations or conditions agreed to in the application for a registration
certificate;
(F) Dispensing, transferring, or selling cannabis while a registration certificate is suspended;
(G) Obtaining cannabis seeds, cannabis seedlings, cannabis plants, cannabis, cannabis extract,
or cannabis products in violation of this article or SDCL chapter 34-20G;
(H) Failing to enter cannabis seedlings, cannabis plants, cannabis, cannabis extracts, or
cannabis products into the establishment’s inventory records;
(I) Applying pesticides to cannabis plants without following all requirements of this article;
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(J) Using solvents without authorization or in an unsafe manner;
(K) Misrepresenting the results of laboratory analysis
(L) Transferring non usable cannabis or cannabis products; or
(M) Committing any misdemeanor or felony offense in connection with the operation
of a medical cannabis establishment.
2. Upon the discovery of violations that pose an ongoing threat to public health, safety, or
welfare, the department may initiate emergency suspension proceedings pursuant to SDCL 1-
26-29.
Source: __
General Authority: SDCL 34-20G-72(6)
Law Implemented: SDCL 34-20G-80 and 34-20G-81
44:90:12:03. Suspension or revocation of a registration certificate for multiple violations.
1. The department may, pursuant to SDCL chapter 1-26 and SDCL 34-20G-81, suspend for up
to six months or revoke a registration certificate upon finding that the establishment has
committed multiple violations of this article or SDCL chapter 34-20G, including:
(A) Serious violations of this article or SDCL chapter 34-20G;
(B) Negligent violations of this article or SDCL chapter 34-20G;
(C) Deviation from operating procedures in a manner that poses a threat to public safety or
health, including the availability of cannabis, cannabis extract, or cannabis products to
qualifying patients, including low-income qualifying patients;
(D) Sharing a cardholder’s personal information;
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(E) Minor or technical violations of this article that did not result in diversion of cannabis or
harm to public health or safety;
(F) Violations of local ordinances governing the time, place, and manner of a medical
cannabis establishment that may operate in the locality;
(G) Failure to allow agents of the department or any law enforcement agency access to an
establishment during normal business hours; or
(H) Failure to provide a notice required by this article or SDCL chapter 34-20G.
(1) Upon the discovery of violations that pose an ongoing threat to public health, safety,
or welfare, the department may initiate emergency suspension proceedings pursuant
to SDCL 1-26-29.
Source: __
General Authority: SDCL 34-20G-72(6)
Law Implemented: SDCL 34-20G-80 and 34-20G-81
44:90:12:04. Voluntary surrender of registration certificate.
An establishment may offer to voluntarily surrender its registration certificate, cease operations,
and may not renew or transfer the registration certificate. In such cases, the department has the
discretion:
1. To reject voluntary surrender;
2. To accept the voluntary surrender without conditions; or
3. To negotiate conditions of a voluntary surrender, including the amount of time before which
the establishment or any principal officer or board member may apply for a registration
certificate.
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Source: __
General Authority: SDCL 34-20G-72(6)
Law Implemented: SDCL 34-20G-80 and 34-20G-81
44:90:12:05. Revocation of registry identification card for unauthorized sale.
Upon a finding that a cardholder has sold cannabis to any person who is not authorized to
possess cannabis for medical purposes, the department shall initiate emergency suspension
proceedings pursuant to SDCL 1-26-29 and notify the cardholder in writing of the revocation of
the registry identification card, along with notice of the right to appeal.
Source: __
General Authority: SDCL 34-20G-72(6)
Law Implemented: SDCL 34-20G-83
44:90:12:06. Revocation of registry identification card for serious or multiple violations.
The department may, pursuant to SDCL chapter 1-26 and SDCL 34-20G-84 revoke a registry
identification card upon finding that the cardholder has committed serious or multiple violations
of SDCL chapter 34-20G, including:
1. Transferring cannabis to any person who is not authorized to possess cannabis for medical
purposes;
2. Submitting false information to the department;
3. Making false statements to a law enforcement officer;
4. Allowing unauthorized use of a registry identification card;
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5. Accepting remuneration other than direct costs incurred for assisting with the registered
qualifying patient's medical use of cannabis, pursuant to SDCL 34-20G-2(2); or
6. Cultivating cannabis in violation of SDCL chapter 34-20G.
Source: __
General Authority: SDCL 34-20G-72(6)
Law Implemented: SDCL 34-20G-84
CHAPTER 44:90:13
PETITIONS TO RECOGNIZE DEBILITATING MEDICAL CONDIITIONS
Section
44:90:13:01 Petitions – Required forms.
44:90:13:02 Department’s decision.
44:90:13:01. Petitions – Required forms.
A petition to the secretary to add a medical condition to the list of debilitating medical conditions
for which a practitioner may recommend the medical use of cannabis must be submitted on
forms provided by the department. The petition must include:
1. The name and address of the South Dakota resident filing the petition;
2. A clear description of the specific medical condition, defined as narrowly as possible,
including any International Classification of Diseases, Tenth Revision (ICD-10) code
applicable to the condition;
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3. The diagnostic criteria for determining whether cannabis is appropriate for a patient with the
medical condition; and
4. A detailed summary, with citations, of peer-reviewed research that treatment with cannabis
produces superior treatment outcomes or fewer side effects, compared to currently available
medications or other interventions;
5. Letters of support from two physicians currently licensed pursuant to SDCL chapter 36-4;
and
6. Complete copies of any research cited in the petition.
Source: _
General Authority: SDCL 34-20G-72(1)
Law Implemented: SDCL 1-26-13 and 34-20G-26
Reference: National Center for Health Statistics. (2021). International Classification of
Diseases, 10th Revision, Clinical Modification. https://icd10cmtool.cdc.gov/
44:90:13:02. Department’s decision.
The secretary’s written decision to approve or deny a petition shall be issued within 180 days of
submission and shall include the factors supporting the decision, including whether the written
petition, public testimony, written comments, peer-reviewed research, and consultation with
practitioners support the following conclusions:
1. The proposed medical condition is recognized by the medical profession as a serious and
chronic medical condition;
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2. Treatments currently available for the proposed condition are either ineffective or produce
harmful side effects; and
3. Medical use of cannabis will provide therapeutic or palliative benefits that outweigh the risks
of cannabis use.
Source: _
General Authority: SDCL 34-20G-72(1)
Law Implemented: SDCL 34-20G-26
City of Brookings
Staff Report
Brookings City & County
Government Center, 520
Third Street
Brookings, SD 57006
(605) 692-6281 phone
(605) 692-6907 fax
File #:ORD 21-028,Version:2
Second Reading and Action on Ordinance 21-028, an Ordinance Establishing Procedures for the
Licensing of Medical Cannabis Dispensaries in the City of Brookings.
Summary:
Ordinance Establishing Procedures for the Licensing of Medical Cannabis Dispensaries in the City of
Brookings.
Recommendation:
Staff recommends approval.
Attachments:
Memo
Ordinance
SDCL 34-20G
Medical Cannabis Rules
City of Brookings Printed on 8/5/2021Page 1 of 1
powered by Legistar™
City Council Agenda Memo
From:Steve Britzman, City Attorney
Council Meeting:August 10, 2021
Subject:Medical Cannabis Dispensary Licensing Ordinance/First
Reading
Person Responsible:Steve Britzman, City Attorney
Summary:
Second Reading of an Ordinance Establishing Procedures for the Licensing of
Medical Cannabis Dispensaries in the City of Brookings.
Background:
This Agenda item for the City Council is a proposed Ordinance which establishes the
licensing procedures for medical cannabis dispensaries in the City of Brookings.
Initiated Measure 26 (IM 26) is the name of the voter-initiated measure which
authorized medical cannabis in South Dakota. It was approved by the voters and is
effective as of July 1st. While there are 95 statutes which make up IM 26, there are
probably 10 or fewer which relate to the role of a city in the licensing of medical
cannabis. These 10 statutes are important because IM 26 provides that the
Department of Health ultimately determines who receives a Registration
Certificate to operate a medical cannabis dispensary following a lengthy submission
by the applicant, and one of the decision criteria for the selection of the successful
dispensary is the input the Department of Health receives from a city which has
established a licensing procedure. Without a municipal licensing procedure, the State
will not have a mechanism to obtain the input from the city as to the city’s preference for
the successful dispensary. Therefore, it is important to license dispensaries, in part, so
the city has the requisite information about the proposed medical cannabis dispensary
so that appropriate input can be provided to the South Dakota Department ofHealth.
IM 26 only addresses medical cannabis, and this ordinance does not in any way
address or license recreational cannabis. Also, IM 26 provides that “no local
government may prohibit a dispensary, either expressly or through the enactment of an
ordinance that makes the operation of the dispensary impracticable in the jurisdiction.”
Therefore, at least one dispensary would be required.
Discussion:
A medical cannabis dispensary is defined by IM 26 as “an entity registered with the
department [of Health] pursuant to [Chapter 34-20G] that acquires, possesses, stores,
delivers, transfers, transports, sells, supplies, or dispenses cannabis, cannabis
products, paraphernalia, or related supplies and educational materials to cardholders.”
One might envision a medical cannabis dispensary as a pharmacy-like facility, though in
Colorado, most medical cannabis dispensaries converted to recreational cannabis sales
when recreational cannabis was legalized, based on information provided by our
consultant Bill Efting.
Medical cannabis may only be sold to cardholders who have been issued valid registry
identification cards by the Department of Health. A cardholder may be a qualifying
patient or a designated caregiver of a qualifying patient. The Department of Health is
required to issue valid registry cards to qualifying patients by November 18, 2021, and
issue rules pertaining to medical cannabis by October 29, 2021. Draft rules have been
published and were used to draft the accompanying medical cannabis dispensary
licensing ordinance. A copy of the draft rules accompanies this Memo. The draft rules
provide at Section 44:90:03:02 the operating procedures for all medical cannabis
establishments. Medical cannabis establishments include 4 types:
1.Cannabis cultivation facilities;
2.Cannabis testing facilities;
3.Cannabis product manufacturing facilities;
4.Dispensaries.
The proposed medical cannabis dispensary licensing ordinance only addresses
dispensaries, with the other facilities to be the subject of a separate proposed licensing
ordinance.
It is important to note that when the South Dakota Department of Health (the
“Department”) evaluates an application from a party who desires to operate a
dispensary in Brookings, the Administrative Rules will require of the Applicant, the
following:
1.A management plan identifying the individuals who will be in charge of day-to-
day operations;
2.A site plan which in part provides sufficient detail for the Department to
determine that the establishment is completely self-contained and does not
have any access to any other cannabis establishment or otherbusiness;
3.Operating Days and hours;
4.A workplace safety plan covering state and federal workplace safety
requirements;
5.Plans for compliance with all applicable safety standards contained in local
ordinance;
6.A security plan indicating all doors, windows, gates, exterior lights, alarm
sensors, cameras and how alarms and cameras will be monitored;
7.Any additional steps to ensure the safety of patrons and the community;
8.Plans for preventing the diversion of cannabis to non-cardholders;
9.Pre-employment screening procedures, including criminal background check;
and
10.Processes for limiting access by unauthorized persons, includingverification
of identity for all vendors and contractors, issuance of a visitor badge, and
closely monitoring all visitors.
Finally, IM 26 provides the following:
“If a local government has enacted a numerical limit on the number of medical
cannabis establishments in the locality and a greater number of applicants seek
registration, the department shall solicit and consider input from the local government as
to its preference for registration”. SDCL 34-20G-56 Accordingly, with a licensing
ordinance in place in Brookings and the number of dispensaries limited to the number
the City Council sets by separate ordinance, the City will have the data and information
to respond to the Department of Health should there be more Medical Cannabis
Dispensary Applicants than the number the City Council establishes for the City of
Brookings.
Financial Consideration:
IM 26 only permits fees which are reasonable. The State charges $5000 for a medical
cannabis Registration Certificate, and the Department of Health has a comprehensive
document submission process which likely justifies this fee. The City typically sets all
fees by Resolution, so there are not intended to be any fees set by this proposed
Ordinance, and therefore I believe licensing medical cannabis dispensaries will have
nominal financial impacts. We do intend to propose reasonable fees be a separate
resolution to cover the costs of administering medical cannabis dispensaries, and fines
for violations of the licensing ordinance.
Options and Recommendation:
The City Council has the following options:
1.Approve as presented;
2.Amend;
3.Deny;
4.Move the item to a study session;
5.Do nothing.
Supporting Documentation:
Memo
Ordinance
SDCL 34-20G
Medical Cannabis Rules
1
ORDINANCE 21-028
AN ORDINANCE ESTABLISHING PROCEDURES FOR THE LICENSING OF
MEDICAL CANNABIS DISPENSARIES IN THE CITY OF BROOKINGS, SD
BE IT ORDAINED BY THE GOVERNING BODY OF THE CITY OF BROOKINGS,
SOUTH DAKOTA, AS FOLLOWS:
MEDICAL CANNABIS DISPENSARIES ORDINANCE
TABLE OF CONTENTS
Page
Section 1. Purpose and intent. 3
Section 2. Definitions. 3
a. Advertise, advertising or advertisement 3
b. Applicant 4
c. Cannabis products 4
d. Cardholder 4
e. Disqualifying felony offense 4
f. Initial application 4
g. License 4
h. Licensed premises 4
i. Licensee 4
j. Local licensing authority 4
k. Medical cannabis or cannabis 5
l. Medical cannabis code 5
m. Medical cannabis dispensary or dispensary 5
n. Medical cannabis establishment 5
o. Registry identification card 5
Section 3. Other laws/administrative rules. 5
Section 4. Authority. 6
Section 5. Medical cannabis license required. 6
Section 6. Term of license; renewal. 7
Section 7. License transfers 7
Section 8. License application. 7
Section 9. Application fee. 8
2
MEDICAL CANNABIS DISPENSARIES ORDINANCE
TABLE OF CONTENTS (Cont.)
Page
Section 10. Annual license fee. 8
Section 11. Additional permits and licenses. 8
Section 12. Application review process. 8
Section 13. Inspections. 9
Section 14. Effect of City’s issuance of a medical cannabis dispensary 10
license.
Section 15. Annual license fee non-refundable. 10
Section 16. Requirements of medical cannabis licensees. 10
Section 17. Facility standards for medical cannabis dispensaries. 11
Section 18. Medical cannabis dispensary rules of operation. 12
Section 19. License revocation and penalties. 13
Section 20. No City liability; indemnification; no defense. 13
Section 21. Signage and advertising. 14
Section 22. Compliance with other applicable laws and rules. 14
Section 23. Suspension or revocation of license; imposition of fines. 14
Section 24. License renewals; expiration of license. 15
Section 25. Change of location. 16
Section 26. Penalties. 17
3
I.
Section 1. Purpose and intent. The purpose of this ordinance is to implement medical
cannabis licensing requirements in a manner consistent with SDCL Chapter 34-20G
and Article 44:90 of the South Dakota Administrative Rules, to protect the health, safety
and welfare of the public and qualifying patients by prescribing the manner in which
medical cannabis dispensaries can be conducted within the City. Further, the purpose
and intent of this ordinance is to:
a. Protect public health and safety through reasonable regulation of medical
cannabis dispensaries as they relate to neighborhoods, patient safety,
security for medical cannabis dispensaries and their personnel, and other
health and safety concerns.
b. Impose fees to cover the direct and indirect costs to the City of licensing and
regulating medical cannabis dispensaries.
Nothing in this ordinance is intended to promote or condone the sale, distribution,
possession or use of marijuana in violation of any applicable law.
Section 2. Definitions. The following words and phrases, when used in this ordinance,
shall have the meanings provided in this ordinance. In addition to the definitions
contained in this ordinance, other terms used in this ordinance shall have the meanings
provided in South Dakota Codified Law Title 34, Chapter 20G, Section 1, SDCL § 22-
42-1 (Controlled Substances and Marijuana, Definitions), and Article 44:90 of the South
Dakota Administrative Rules, and such definitions are hereby incorporated into this
ordinance by reference.
Advertise, advertising or advertisement means the act of drawing the
public's attention, whether through print, signs, telephonic, electronic,
wireless or digital means, to a medical cannabis dispensary in order to
promote the sale of medical cannabis by the dispensary.
Applicant shall mean any person or entity who has submitted an
application for a license or renewal of a license issued pursuant to this
ordinance. If the applicant is an entity and not a natural person, applicant
shall include all persons who are the members, managers, officers,
directors and shareholders of such entity.
Cannabis products shall mean any concentrated cannabis, cannabis
extracts, and products that are infused with cannabis or an extract thereof,
and are intended for use or consumption by humans. The term includes
edible cannabis products, beverages, topical products, ointments, oils, and
tinctures.
Cardholder shall mean any person who has been issued and possesses a
valid registry identification card pursuant SDCL Chapter 34 -20G.
Disqualifying felony offense shall mean a crime that was classified as a
felony in the jurisdiction where the person was convicted.
Initial application shall mean the first application filed for a dispensary.
License shall mean to grant a license pursuant to this ordinance.
Licensed premises shall mean the premises specified in an application for
a license pursuant to this ordinance that is owned by or in possession of
4
the licensee and within which the licensee is authorized to distribute or sell
Medical Cannabis in accordance with the provisions of South Dakota
Codified Law Chapter 34-20G.
Licensee shall mean any person or business entity that has been issued
and holds a valid, current license pursuant to this ordinance. If the licensee
is an entity and not a natural person, licensee shall include all persons who
are the members, managers, officers, directors and shareholders of such
entity.
Local licensing authority shall mean the City of Brookings.
Medical cannabis or cannabis shall mean cannabis as defined in Article
44:90 of the Administrative Rules of South Dakota and as used in SDCL
Chapter 34-20G.
Medical cannabis code shall mean SDCL Chapter 34-20G, as the same
may be hereafter amended, and any other rules or regulations promulgated
thereunder, including Article 44:90 of the Administrative Rules of South
Dakota and as used in SDCL Chapter 34-20G.
Medical cannabis dispensary or dispensary shall mean the entity
registered with the South Dakota Department of Health pursuant to SDCL
Chapter 34-20G and licensed by the City pursuant to this ordinance that
acquires, possesses, stores, delivers, transfers, transports, sells, supplies,
or dispenses cannabis, cannabis products, paraphernalia, or related
supplies and educational materials to cardholders. Medical cannabis
dispensary does not include a cultivation facility, a cannabis testing facility,
a cannabis product manufacturing facility, or a recreational cannabis
dispensary.
Medical cannabis establishment shall mean a cannabis cultivation
facility, a cannabis testing facility, a cannabis product manufacturing
facility, or a cannabis dispensary as those terms are defined in SDCL§ 34-
20G-1.
Registry identification card shall mean a document issued by South
Dakota Department of Health that identifies a person as a registered
qualifying patient or registered designated caregiver, or documentation that
is deemed a registry identification card pursuant to §§ 34-20G-29 to 34-
20G-42, inclusive.
Section 3. Other laws/administrative rules. If the State of South Dakota adopts any
stricter regulation governing a medical cannabis dispensary than that set forth in this
ordinance, the stricter regulation shall control the establishment or operation of any
medical cannabis dispensary in the City. The Administrative Rules of South Dakota set
forth in Article 44:90 and pertaining to medical cannabis are incorporated by reference
and are made a part hereof. A licensee shall be required to demonstrate, upon demand
by the City, or by law enforcement officers, that the source and quantity of any cannabis
located upon the licensed premises are in full compliance with the applicable laws of the
State and City. If the State prohibits the sale or other distribution of medical cannabis in
any respect, any license issued under this Section shall be deemed immediately
revoked by operation of law. The issuance of any license pursuant to this ordinance
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shall not be deemed to create an exception, defense or immunity to any person in
regard to any potential criminal liability the person may have for the cultivation,
possession, sale, distribution, or use of marijuana.
Section 4. Authority. The City Council shall have the authority pursuant to the SDCL
Chapter 34-20G and this ordinance to grant or deny licenses. Authorized
representatives of the City of Brookings shall have the authority to inspect the premises
of a medical cannabis dispensary to confirm compliance with all licensing requirements.
Section 5. Medical cannabis license required. It shall be unlawful for any person to
operate a medical cannabis dispensary within the jurisdictional limits of the City without
first having obtained a medical cannabis dispensary license to operate pursuant to the
provisions of this ordinance, having a validly issued medical cannabis dispensary
registration certificate in good standing from the State, and having paid all applicable
fees. Such license and registration certificate shall be kept current at all times, and
failure by a licensee to maintain a current medical cannabis dispensary license shall
constitute a violation of this ordinance.
Section 6. Term of license; renewal. Each medical cannabis dispensary license
issued by the City shall be effective upon issuance, however a Certificate of
Registration issued by the State of South Dakota shall be required before a licensee
may conduct business as a medical cannabis dispensary in the City. Each medical
cannabis license shall terminate on the last day of December of the year issued.
Renewal applications shall be filed at least 30 days prior to the expiration date of the
existing license.
Section 7. License transfers. An application for the transfer of a medical cannabis
license to a different physical location or to another person or business entity shall
include all information required by the South Dakota Administrative Rules under
Administrative Rule 44:90:03:01.
Section 8. License application. An application for a medical cannabis dispensary
license or to renew a license previously issued under this ordinance shall be submitted
to the City on forms provided by the City Clerk for such purposes:
a. The name, address, and date of birth of each owner, shareholder, LLC
member, partner and manager, principal officer, and board members of the
proposed medical cannabis dispensary;
b. Documentation reflecting the applicant’s right to possess the proposed
licensed premises for the proposed use;
c. A site plan reflecting the boundaries of the proposed licensed premises;
d. A description of safety and security measures reflecting compliance with the
City and State’s operating requirements as required by the Administrative
Rule 44:90:03:02; and
e. Any other additional information requested by the City Council deemed
necessary for the City to evaluate the application.
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The City will not issue a medical cannabis dispensary license until all information
required of the applicant has been submitted, and the applicant:
a. Has submitted a complete application;
b. Is prepared to operate the dispensary with the owners and managers as set
forth in the application, all in compliance with this ordinance and any other
applicable law, rule or regulation; and
c. Has paid all fees.
Section 9. Application fee. At the time an applicant files an application for a medical
cannabis dispensary license, the applicant shall pay a non -refundable application fee to
the City in an amount established by resolution of the City to defray the costs incurred
by the City for processing the application.
Section 10. Annual license fee. Within thirty (30) days of receiving a medical cannabis
dispensary registration certificate from the State of South Dakota pursuant to SDCL
Chap. 34-20G, the licensee shall pay to the City an annual license fee in an amount
established by resolution of the City. The annual license fee is in addition to the initial
application fee required pursuant to Section 9. The annual license fee shall be paid on
the basis of a calendar year regardless of the date of license issuance, and no proration
or discount shall be given.
Section 11. Additional permits and licenses. A license issued pursuant to this
ordinance is in addition to and does not eliminate the need for the licensee to obtain any
zoning-related permits or building permits required by the Brookings Code of
Ordinances.
Section 12. Application review process.
a. Upon receipt of a complete application, the City Manager or their
representative shall review the application to determine whether the
application is in compliance with the City’s ordinances. No license will be
approved until the City Manager or their representative has conducted an
inspection of the proposed premises to determine compliance of the proposed
medical cannabis dispensary with all applicable requirements of this
ordinance, and with the plans and application submittals. The City Manager or
their representative shall reject any application that does not meet the
requirements of this ordinance or that contains any false, misleadin g or
incomplete information.
b. Within thirty (30) days after the completion of the review of the application, the
City Council shall approve or deny the license application provided the City
Manager or their representative has determined that all requirements for a
medical cannabis dispensary license have been satisfied . The City Clerk or
their representative shall provide the reason(s) for denial of the license by first
class mail to the applicant at the address provided in the application.
c. If approved, the City Clerk or their representative shall issue to the applicant a
cannabis license, which shall include the date of issuance, the term of the
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license, the name of the licensee and the physical address of the licensed
premises.
Section 13. Inspections. During the review of the medical cannabis dispensary license
application, and at all reasonable times after a medical cannabis dispensary license is
issued, the City Manager or their representative may make any reasonable inquiries
and inspections at reasonable times of the medical cannabis dispensary to determine if
the premises meets or continues to meet the requirements of City ordinances and State
statutes. It shall be a violation of this ordinance and grounds for revocation of any
license issued hereunder for a licensee to fail to provide supplemental information or
refuse inspections by the City Manager or their representative.
Section 14. Effect of City’s issuance of a medical cannabis dispensary license. If
approved, the City’s issuance of a license shall be subject to automatic termination if:
a. The licensee does not receive or fails to qualify for the State registration
certificate required under SDCL Chapter 34-20G; or
b. The licensee fails to pay the annual license fee to the City within thirty (30)
days of the issuance of the State registration certificate in accordance with
this ordinance.
No licensee may engage in the sale of cannabis products unless the licensee holds a
current State registration certificate and a City of Brookings medical cannabis
dispensary license.
Section 15. Annual license fee non-refundable. If a license is revoked pursuant to
the provisions of this ordinance, the annual license fee shall not be refunded.
Section 16. Requirements of medical cannabis licensees. A medical cannabis
dispensary licensee is subject to the following requirements:
a. A licensee shall be prohibited from employing any employee under twenty-one
(21) years of age;
b. In accordance with SDCL § 34-20G-67, a medical cannabis dispensary shall not
share office space with or refer a patient to a practitioner;
c. In accordance with SDCL § 34-20G-68, a medical cannabis dispensary shall not
permit any person to consume cannabis upon the property of the licensed
premises;
d. A licensed premises may only be located within a zoning district which permits a
medical cannabis dispensary as a permitted use;
e. The licensed premises shall be located no less than one thousand feet (1,000') of
a public or private school existing before the date of the medical cannabis
dispensary application and no less than three hundred feet (300') from the
nearest property line of any religious institution, detention facility, or any other
facility identified in this ordinance or in State law that requires a distance
separation from a licensed medical cannabis dispensary. No cannabis
dispensary shall operate within three hundred feet (300') of another cannabis
dispensary. Distances shall be measured from the closest point of the property
lines including public rights of way;
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f. The licensed premises shall not be located within any building containing a
dwelling unit, a pediatrician’s office, hotel, motel or lodging facility;
Section 17. Facility standards for medical cannabis dispensaries. The medical
cannabis dispensary shall be maintained in accordance with the following facility
standards:
a. It shall be unlawful to operate a medical cannabis dispensary outside of an
enclosed building which is capable of being locked. All medical cannabis
dispensary licenses shall be issued for a specific fixed location within an
enclosed building.
b. The facility shall have locked display cases only accessible to staff during
business hours. The facility shall have a locked vault or storage cage in which all
cannabis and cannabis products shall be stored du ring hours the dispensary is
closed.
c. The facility shall conform to the prevailing building and fire codes adopted by the
City of Brookings.
d. All exterior entrances and exits and all parking areas shall be lighted at all times
after dark.
e. Security cameras which comply with the South Dakota Administrative Rules for
Medical Cannabis Dispensaries are required. The camera system shall securely
store camera footage for no less than thirty (30) days.
f. The facility shall have a functional commercial alarm system triggered by the
press of a button, by the breaking of glass, and by forcing open a locked door.
Section 18. Medical cannabis dispensary rules of operation. Each dispensary shall
be operated only in accordance with the following rules:
a. The medical cannabis dispensary shall be operated and maintained in
accordance with Administrative Rule 44:90:03:02, which provides the operating
procedures for all medical cannabis establishment a pplication submittals filed
with the South Dakota Department of Health.
b. Each dispensary shall be operated and maintained in accordance with the
dispensary requirements and facility standards set forth in this ordinance and all
other applicable City ordinances, State laws and State administrative rules
concerning medical cannabis.
c. No person shall be allowed entry into the dispensary without showing a valid
picture identification.
d. A medical cannabis dispensary shall be ventilated so that the odor of cannabis or
cannabis products cannot be detected by a person with a normal sense of smell
outside the medical cannabis dispensary or on any adjoining property.
e. All sales of medical cannabis shall be made in person, directly to the purchaser,
within the medical cannabis dispensary. Sales shall occur only in person to the
purchaser at the time of purchase within the medical cannabis dispensary. No
drive up windows or other similar delivery process shall be allowed.
f. No medical cannabis dispensary shall distribute or allow the distribution of any
medical cannabis without charge within a medical cannabis dispensary or at any
other place for purposes of promotion, advertising or any other purpose.
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Section 19. License revocation and penalties.
a. Any medical cannabis dispensary license may be revoked or suspended in
accordance with this ordinance.
b. Any person operating a dispensary without a license is subject to a civil fine of up
to two hundred dollars ($200.00). Each day a dispensary is operated without a
license shall constitute a separate offense.
c. Operating a dispensary without a license shall be deemed a public nuisance and
subject to abatement as a public nuisance. Such nuisance may be abated in any
manner permitted by ordinance or other applicable law, including, but not limited
to an action for injunctive relief.
d. A medical cannabis dispensary license is subject to suspension if a licensee or
any of its employees or agents has been convicted of selling a cannabis product
to any person under the age of twenty-one (21).
Section 20. No City liability; indemnification; no defense.
a. By accepting a license issued pursuant to this ordinance, the licensee waives
any claim concerning, and releases the City, its officers, elected officials,
employees, attorneys and agents from any liability for injuries or damages of any
kind that result from any arrest or prosecution of business owners, operators,
employees, clients or customers of the licensee for a violation of State or federal
laws, rules or regulations.
b. By accepting a license issued pursuant to this ordinance, all licensees, jointly and
severally if more than one, agree to indemnify, defend and hold harmless the
City, its officers, elected officials, employees, attorneys, agents, insurers and
self-insurance pool against all liability, claims and demands on account of any
injury, loss or damage, including without limitation claims arising from bodily
injury, personal injury, sickness, disease, death, property loss or damage, or any
other loss of any kind whatsoever arising out of or in any manner connected with
the operation of the medical cannabis dispensary that is the subject of the
license. All owners of a medical cannabis dispensary shall sign the license
application forms and indemnification and waiver and release forms.
c. The issuance of a license pursuant to this section shall not be deemed to create
an exception, defense or immunity for any person in regard to any potential
criminal liability the person may have under State or federal law for the
cultivation, possession, sale, distribution or use of marijuana.
Section 21. Signage and advertising. All exterior signage associated with a medical
cannabis dispensary must comply with the zoning ordinances of the City and the
Administrative Rules of South Dakota.
Section 22. Compliance with other applicable laws and rules. Except as may be
otherwise provided in this ordinance, any law or regulation adopted by the State
governing the cultivation, production, possession, or distribution of medical cannabis
use shall also apply to medical cannabis dispensaries licensed within the City.
Accordingly, the South Dakota Administrative Rules set forth in Article 44:90 are
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incorporated in this ordinance by reference.
Section 23. Suspension or revocation of license; imposition of fines. The grounds
for suspension or revocation of a medical cannabis dispensary license and the
procedures for such suspension or revocation shall be as provided in State law. In
addition thereto, a violation of any of the provisions of this ordinance or any State law or
regulation related to licensing or operation of a medical cannabis dispensary shall be
grounds for suspension or revocation of a City medical cannabis dispensary license,
subject to notice and hearing.
Section 24. License renewals; expiration of license.
a. Renewal of License. The licensee shall apply for renewal of the medical
cannabis dispensary license at least 30 days prior to the expiration of the
license (December 31st of each year). If the Applicant files for renewal less
than 30 days prior to the expiration date, then the City may process the
renewal application if the Applicant submits a late filing fee in an amount
established by resolution of the City at the time of submission of the renewal
application.
(1) The renewal license fee, and late fee, if applicable, shall accompany
the renewal application. Such fees are nonrefundable.
(2) In the event there have been any changes in the location of the
premises submitted, the renewal application shall identify the proposed
changes in the location.
(3) In the event any person who has an interest as described in the initial
medical cannabis dispensary application made to the City pursuant to
this ordinance, or any dispensary owner or agent, as defined herein,
has been charged with or accused of violations of any law since such
disclosure, the renewal application shall include the name of the
violator, the date of the violation, the court and case number where the
violation was filed and the disposition of such violation.
(4) In the event the medical cannabis dispensary license has been
suspended or revoked, or a licensee has received any notice of
violation of any law, the renewal application shall include a copy of the
notice, suspension or revocation.
(5) The renewal application shall include verification that the medical
cannabis dispensary has a valid State certificate of registration.
(6) In the event there have been allegations of violations of this ordinance
by any of the licensees or the dispensary submitting a renewal
application, the City Manager or their representative may hold a
hearing prior to approving the renewal application. The hearing shall
be for purposes of determining whether the application, proposed
licensee and past operation of the dispensary has been in compliance
with this ordinance. If the application or the licensee does not meet the
requirements of this ordinance, or the dispensary has been operated
in the past in violation of this ordinance, the renewal application may
be denied by the City Council or their representative, or issued with
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conditions.
Section 25. Change of location. A medical cannabis dispensary licensee may apply
to the City for a change in location of the licensed premises. The inquiry by the City
into the request for a change of location of the licensed premises may include any item
that may be reviewed for a new medical cannabis dispensary license, provided that
the qualifications of the licensee to hold a license for a medical cannabis dispensary
shall not be subject to review so long as the licensee meets all requirements of this
ordinance and any provisions of State law at the time the license was originally issued
and remains in compliance with this ordinance subsequent to the issuance of said
license.
Section 26. Penalties. In addition to the possible denial, suspension, revocation or
non-renewal of a license or any other penalty provided for under the provisions of this
ordinance or by State law, any person, including but not limited to, any licensee, owner,
manager or employee of a medical cannabis dispensary or any customer of a medical
cannabis dispensary who violates any provisions of this ordinance may be cited for such
violation and shall be subject to the penalties for violation of City ordinance.
II.
Any or all ordinances in conflict herewith are hereby repealed.
FIRST READING: July 27, 2021
SECOND READING: August 10, 2021
PUBLISHED: August 13, 2021
CITY OF BROOKINGS, SOUTH DAKOTA
ATTEST: Oepke G. Niemeyer, Mayor
Bonnie Foster, City Clerk
CHAPTER 34-20G
MEDICAL CANNABIS
34-20G-1 Definitions.
34-20G-2 Cardholders not subject to arrest, prosecution, penalty, or discipline for certain conduct.
34-20G-3 Nonresident cardholders not subject to arrest, prosecution, penalty, or discipline for certain conduct.
34-20G-4 Presumption that qualifying patient or designated caregiver is engaged in the medical use of
cannabis--Presumption rebuttable.
34-20G-5 Practitioners not subject to arrest, prosecution, penalty, or discipline for certain conduct.
34-20G-6 Attorneys not subject to discipline for certain conduct.
34-20G-7 Persons not subject to arrest, prosecution, penalty, or discipline for certain conduct.
34-20G-8 Dispensaries and agents not subject to prosecution, search, seizure, penalty, or discipline for certain
conduct.
34-20G-9 Cultivation facilities and agents not subject to prosecution, search, seizure, penalty, or discipline for
certain conduct.
34-20G-10 Cannabis product manufacturing facilities and agents not subject to prosecution, search, seizure,
penalty, or discipline for certain conduct.
34-20G-11 Testing facilities and agents not subject to prosecution, search, seizure, penalty, or discipline for
certain conduct.
34-20G-12 Sale or donation of cannabis seeds to cultivation facility.
34-20G-13 Seizure or forfeiture of cannabis or related property.
34-20G-14 Possession of or application for registry identification card not grounds for search.
34-20G-15 Activity conducted in accordance with chapter lawful.
34-20G-16 Enforcement of federal law by state law enforcement officers.
34-20G-17 Contracts enforceable.
34-20G-18 Unauthorized conduct.
34-20G-19 Schools and landlords--Prohibited conduct.
34-20G-20 Qualifying patient not disqualified from medical care for cannabis use.
34-20G-21 Custody and visitation rights--Child neglect or endangerment.
34-20G-22 Employment and drug testing.
34-20G-23 Conflict with employer's obligations or benefits under federal law.
34-20G-24 Ingestion of cannabis at workplace--Working under the influence of cannabis.
34-20G-25 Schools, landlords, and employers not to be penalized.
34-20G-26 Petition to add serious medical condition or treatment to list of debilitating medical conditions--
Department consideration--Judicial review.
34-20G-27 Cost reimbursement, permission to smoke cannabis on property, and permission to cultivate on
rental property not required.
34-20G-28 Discipline for ingestion of cannabis at workplace and working under the influence of cannabis
permitted.
34-20G-29 Information required for issuance of registry identification cards--Fee.
34-20G-30 Submission of information by person responsible for medical decisions for qualifying patient.
34-20G-31 Department verification of information--Issuance of registry identification card--Verification
system.
34-20G-32 Background check of designated caregiver.
34-20G-33 Issuance of registry identification card to patient under age 18--Conditions.
34-20G-34 Grounds for denial or nonrenewal of qualifying patient registry identification card.
34-20G-35 Grounds for denial of application or nonrenewal of designated caregiver.
34-20G-36 Notice of reason for denial.
34-20G-37 Judicial review of application denial or nonrenewal.
34-20G-38 Temporary qualifying patient registry identification card.
34-20G-39 Temporary designated caregiver registry identification card.
34-20G-40 Availability of applications--Written certification as temporary registry identification card.
34-20G-41 Availability of applications--Temporary designated caregiver registry identification card.
34-20G-42 Contents of registry identification cards.
34-20G-43 Expiration of registry identification card.
34-20G-44 Confidential list of persons issued registry identification cards.
34-20G-45 Secure phone or web-based verification system.
34-20G-46 Required notifications to department.
34-20G-47 Notifications by designated caregiver.
34-20G-48 Issuance of new registry identification card following required notification to department.
34-20G-49 Card void upon notice to department that patient no longer qualifies--Disposal of cannabis.
34-20G-50 Theft or loss of cannabis--Notice to department.
34-20G-51 Medical purpose defense to prosecution involving cannabis.
34-20G-52 Proof of unavailability of defense to prosecution.
34-20G-53 Registry identification card not required to raise defense.
34-20G-54 Person using cannabis for medical purpose not subject to discipline or forfeiture.
34-20G-55 Application for medical cannabis establishment--Contents and conditions--Time for registration.
34-20G-56 Local government limitation on number of medical cannabis establishments.
34-20G-57 Renewal of medical cannabis establishment registration.
34-20G-58 Local government ordinances governing medical cannabis establishments.
34-20G-59 Local government prohibition of dispensaries not permitted.
34-20G-60 Local licensing of medical cannabis establishments--Fee.
34-20G-61 Criminal background check of medical cannabis establishment officers, employees, and volunteers.
34-20G-62 Employment restrictions on medical cannabis establishments.
34-20G-63 Medical cannabis establishment procedures for oversight and record keeping.
34-20G-64 Medical cannabis establishment security measures.
34-20G-65 Cultivation, harvesting, manufacturing, and packaging of cannabis.
34-20G-66 Production of cannabis products.
34-20G-67 Sharing office space and patient referrals to practitioners prohibited.
34-20G-68 Consumption of cannabis on medical cannabis establishment property prohibited.
34-20G-69 Inspection of medical cannabis establishments.
34-20G-70 Conditions for dispensing cannabis.
34-20G-71 Limitations on amount of cannabis dispensed.
34-20G-72 Promulgation of rules--Violation of required or prohibited action as misdemeanor.
34-20G-73 Civil penalty for failure to provide required notice.
34-20G-74 Intentional cannabis sale or transfer to unauthorized person by medical cannabis establishment or
agent as felony--Disqualification.
34-20G-75 Intentional cannabis sale or transfer by cardholder to unauthorized person as felony.
34-20G-76 False statement to law enforcement official about medical use of cannabis as misdemeanor.
34-20G-77 Knowing submission of false records or documents to certify medical cannabis establishment as
felony.
34-20G-78 Certain conduct of practitioner as misdemeanor.
34-20G-79 Breach of confidentiality of information as misdemeanor.
34-20G-80 Suspension or revocation of medical cannabis establishment registration certificate.
34-20G-81 Notice of suspension, revocation, or sanction--Notice of hearing--Duration of suspension.
34-20G-82 Permitted and prohibited conduct during suspension.
34-20G-83 Revocation of registry identification card for cannabis sale to unauthorized person--
Disqualification.
34-20G-84 Revocation of registry identification card for multiple or serious violations.
34-20G-85 Judicial review of revocation.
34-20G-86 Confidential data.
34-20G-87 Restrictions on data maintained by department.
34-20G-88 Permitted disclosure of data maintained by department.
34-20G-89 Restrictions on data maintained by medical cannabis establishments.
34-20G-90 Cardholder's request for department to confirm cardholder status to others.
34-20G-91 Destruction of unused media containing cardholder information.
34-20G-92 Oversight committee membership.
34-20G-93 Oversight committee duties.
34-20G-94 Annual report to the Legislature--Information excluded.
34-20G-95 Administration of medical cannabis to students.
34-20G-1.Definitions.
Terms used in this chapter mean:
(1) "Allowable amount of cannabis," means:
(a) Three ounces of cannabis or less;
(b) The quantity of cannabis products as established by rules promulgated by the department under
§ 34-20G-72;
(c) If the cardholder has a registry identification card allowing cultivation, three cannabis plants
minimum or as prescribed by physician; and
(d) If the cardholder has a registry identification card allowing cultivation, the amount of cannabis
and cannabis products that were produced from the cardholder's allowable plants, if the
cannabis and cannabis products are possessed at the same property where the plants were
cultivated;
(2) "Bona fide practitioner-patient relationship,":
(a) A practitioner and patient have a treatment or consulting relationship, during the course of
which the practitioner has completed an assessment of the patient's medical history and
current medical condition, including an appropriate in-person physical examination;
(b) The practitioner has consulted with the patient with respect to the patient's debilitating medical
condition; and
(c) The practitioner is available to or offers to provide follow-up care and treatment to the patient,
including patient examinations;
(3) "Cannabis products," any concentrated cannabis, cannabis extracts, and products that are infused with
cannabis or an extract thereof, and are intended for use or consumption by humans. The term
includes edible cannabis products, beverages, topical products, ointments, oils, and tinctures;
(4) "Cannabis product manufacturing facility," an entity registered with the department pursuant to this
chapter that acquires, possesses, manufactures, delivers, transfers, transports, supplies, or sells
cannabis products to a medical cannabis dispensary;
(5) "Cannabis testing facility" or "testing facility," an independent entity registered with the department
pursuant to this chapter to analyze the safety and potency of cannabis;
(6) "Cardholder," a qualifying patient or a designated caregiver who has been issued and possesses a valid
registry identification card;
(7) "Cultivation facility," an entity registered with the department pursuant to this chapter that acquires,
possesses, cultivates, delivers, transfers, transports, supplies, or sells cannabis and related supplies to
a medical cannabis establishment;
(8) "Debilitating medical condition,":
(a) A chronic or debilitating disease or medical condition or its treatment that produces one or more
of the following: cachexia or wasting syndrome; severe, debilitating pain; severe nausea;
seizures; or severe and persistent muscle spasms, including those characteristic of multiple
sclerosis; or
(b) Any other medical condition or its treatment added by the department, as provided for in § 34-
20G-26;
(9) "Department," means the Department of Health;
(10) "Designated caregiver," a person who:
(a) Is at least twenty-one years of age;
(b) Has agreed to assist with a qualifying patient's medical use of cannabis;
(c) Has not been convicted of a disqualifying felony offense; and
(d) Assists no more than five qualifying patients with the medical use of cannabis, unless the
designated caregiver's qualifying patients each reside in or are admitted to a health care
facility or residential care facility where the designated caregiver is employed;
(11) "Disqualifying felony offense," a violent crime that was classified as a felony in the jurisdiction where
the person was convicted;
(12) "Edible cannabis products," any product that:
(a) Contains or is infused with cannabis or an extract thereof;
(b) Is intended for human consumption by oral ingestion; and
(c) Is presented in the form of foodstuffs, beverages, extracts, oils, tinctures, or other similar
products;
(13) "Enclosed, locked facility," any closet, room, greenhouse, building, or other enclosed area that is
equipped with locks or other security devices that permit access only by a cardholder or a person
allowed to cultivate the plants. Two or more cardholders who reside in the same dwelling may share
one enclosed, locked facility for cultivation;
(14) "Medical cannabis" or "cannabis," marijuana as defined in § 22-42-1;
(15) "Medical cannabis dispensary" or "dispensary," an entity registered with the department pursuant to
this chapter that acquires, possesses, stores, delivers, transfers, transports, sells, supplies, or dispenses
cannabis, cannabis products, paraphernalia, or related supplies and educational materials to
cardholders;
(16) "Medical cannabis establishment," a cultivation facility, a cannabis testing facility, a cannabis product
manufacturing facility, or a dispensary;
(17) "Medical cannabis establishment agent," an owner, officer, board member, employee, or volunteer at a
medical cannabis establishment;
(18) "Medical use," includes the acquisition, administration, cultivation, manufacture, delivery, harvest,
possession, preparation, transfer, transportation, or use of cannabis or paraphernalia relating to the
administration of cannabis to treat or alleviate a registered qualifying patient's debilitating medical
condition or symptom associated with the patient's debilitating medical condition. The term does not
include:
(a) The cultivation of cannabis by a nonresident cardholder;
(b) The cultivation of cannabis by a cardholder who is not designated as being allowed to cultivate
on the cardholder's registry identification card; or
(c) The extraction of resin from cannabis by solvent extraction unless the extraction is done by a
cannabis product manufacturing facility;
(19) "Nonresident cardholder," a person who:
(a) Has been diagnosed with a debilitating medical condition, or is the parent, guardian,
conservator, or other person with authority to consent to the medical treatment of a person
who has been diagnosed with a debilitating medical condition;
(b) Is not a resident of this state or who has been a resident of this state for fewer than forty-five
days;
(c) Was issued a currently valid registry identification card or its equivalent by another state,
district, territory, commonwealth, insular possession of the United States, or country
recognized by the United States that allows the person to use cannabis for medical purposes in
the jurisdiction of issuance; and
(d) Has submitted any documentation required by the department, and has received confirmation of
registration;
(20) "Practitioner," a physician who is licensed with authority to prescribe drugs to humans. In relation to a
nonresident cardholder, the term means a person who is licensed with authority to prescribe drugs to
humans in the state of the patient's residence;
(21) "Qualifying patient," a person who has been diagnosed by a practitioner as having a debilitating
medical condition;
(22) "Registry identification card," a document issued by the department that identifies a person as a
registered qualifying patient or registered designated caregiver, or documentation that is deemed a
registry identification card pursuant to §§ 34-20G-29 to 34-20G-42, inclusive; and
(23) "Written certification," a document dated and signed by a practitioner, stating that in the practitioner's
professional opinion the patient is likely to receive therapeutic or palliative benefit from the medical
use of cannabis to treat or alleviate the patient's debilitating medical condition or symptom associated
with the debilitating medical condition. This document shall affirm that it is made in the course of a
bona fide practitioner-patient relationship and shall specify the qualifying patient's debilitating
medical condition.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-2.Cardholders not subject to arrest, prosecution, penalty, or discipline for certain conduct.
A cardholder is not subject to arrest, prosecution, or penalty of any kind, or denial of any right or
privilege, including any civil penalty or disciplinary action by a court or occupational or professional licensing
board or bureau, for:
(l) The medical use of cannabis in accordance with this chapter, if the cardholder does not possess more
than the allowable amount of cannabis, and if any cannabis plant is either cultivated in an enclosed,
locked facility or is being transported;
(2) Reimbursement by a registered qualifying patient to the patient's registered designated caregiver for
direct costs incurred by the registered designated caregiver for assisting with the registered qualifying
patient's medical use of cannabis;
(3) Transferring the cannabis to a testing facility;
(4) Compensating a dispensary or a testing facility for goods or services provided;
(5) Selling, transferring, or delivering cannabis seeds produced by the cardholder to a cultivation facility or
dispensary; or
(6) Offering or providing cannabis to a cardholder for a registered qualifying patient's medical use, to a
nonresident cardholder, or to a dispensary if nothing of value is transferred in return and the person
giving the cannabis does not knowingly cause the recipient to possess more than the allowable
amount of cannabis.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-3. Nonresident cardholders not subject to arrest, prosecution, penalty, or discipline for
certain conduct.
No nonresident cardholder is subject to arrest, prosecution, or penalty in any manner, or denied any right
or privilege, including civil penalty or disciplinary action by a business or occupational or professional licensing
board or entity, for transporting, purchasing, possessing, or using medical cannabis in accordance with this
chapter if the nonresident cardholder does not possess more than three ounces of cannabis and the quantity of
cannabis products established by rules promulgated by the department under § 34-20G-72.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-4. Presumption that qualifying patient or designated caregiver is engaged in the medical
use of cannabis--Presumption rebuttable.
There is a presumption that a qualifying patient or designated caregiver is engaged in the medical use of
cannabis in accordance with this chapter if the cardholder is in possession of a registry identification card and an
amount of cannabis that does not exceed the allowable amount of cannabis. The presumption may be rebutted by
evidence that conduct related to cannabis was not for the purpose of treating or alleviating a qualifying patient's
debilitating medical condition or symptom associated with the qualifying patient's debilitating medical condition
under this chapter.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-5. Practitioners not subject to arrest, prosecution, penalty, or discipline for certain
conduct.
No practitioner is subject to arrest, prosecution, or penalty of any kind, or denied any right or privilege,
including civil penalty or disciplinary action by the South Dakota Board of Medical and Osteopathic Examiners
or by any other occupational or professional licensing board or bureau, solely for providing written certifications
or for otherwise stating that, in the practitioner's professional opinion, a patient is likely to receive therapeutic or
palliative benefit from the medical use of cannabis to treat or alleviate the patient's serious or debilitating
medical condition or symptoms associated with the serious or debilitating medical condition, Nothing in this
chapter prevents a practitioner from being sanctioned for:
(1) Issuing a written certification to a patient with whom the practitioner does not have a bona fide
practitioner-patient relationship; or
(2) Failing to properly evaluate a patient's medical condition.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-6. Attorneys not subject to discipline for certain conduct.
No attorney is subject to disciplinary action by the State Bar of South Dakota or other professional
licensing association for providing legal assistance to a prospective or registered medical cannabis establishment
or other related to activity that is not subject to criminal penalties under law of this state.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-7. Persons not subject to arrest, prosecution, penalty, or discipline for certain conduct.
No person is subject to arrest, prosecution, or penalty of any kind, or may be denied any right or
privilege, including any civil penalty or disciplinary action by a court or occupational or professional licensing
board or bureau, for:
(1) Providing or selling cannabis paraphernalia to a cardholder, nonresident cardholder, or to a medical
cannabis establishment;
(2) Being in the presence or vicinity of the medical use of cannabis that is exempt from criminal or civil
penalty by this chapter;
(3) Allowing the person's property to be used for an activity that is exempt from criminal or civil penalty
by this chapter; or
(4) Assisting a registered qualifying patient with the act of using or administering cannabis.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-8. Dispensaries and agents not subject to prosecution, search, seizure, penalty, or discipline
for certain conduct.
No dispensary or a dispensary agent is subject to prosecution, search, or inspection, except by the
department pursuant to § 34-20G-69, seizure, or penalty in any manner; or may be denied any right or privilege,
including civil penalty or disciplinary action by a court or business licensing board or entity, for acting in
accordance with this chapter to:
(1) Possess, transport, or store cannabis or cannabis products;
(2) Deliver, transfer, or transport cannabis to a testing facility and compensate a testing facility for services
provided;
(3) Accept cannabis offered by a cardholder or nonresident cardholder if nothing of value is exchanged in
return;
(4) Purchase or otherwise acquire cannabis from a cultivation facility or dispensary, and cannabis products
from cannabis product manufacturing facility or dispensary; and
(5) Deliver, sell, supply, transfer, or transport cannabis, cannabis products, cannabis paraphernalia, or
related supplies or educational materials to a cardholder, nonresident cardholder, or dispensary.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-9. Cultivation facilities and agents not subject to prosecution, search, seizure, penalty, or
discipline for certain conduct.
No cultivation facility or a cultivation facility agent is subject to prosecution, search, or inspection,
except by the department pursuant to § 34-20G-69, seizure, or penalty of any kind, or may be denied any right or
privilege, including civil penalty or disciplinary action by a court or business licensing board or entity, for acting
in accordance with this chapter to:
(1) Possess, plant, propagate, cultivate, grow, harvest, produce, process, manufacture, compound, convert,
prepare, pack, repack, or store cannabis;
(2) Deliver, transfer, or transport cannabis to a testing facility and compensate a testing facility for services
provided;
(3) Accept cannabis offered by a cardholder or nonresident cardholder if nothing of value is exchanged in
return;
(4) Purchase or otherwise acquire cannabis from a cultivation facility;
(5) Purchase cannabis seeds from a cardholder, nonresident cardholder, or the equivalent of a medical
cannabis establishment that is registered in another jurisdiction; or
(6) Deliver, sell, supply, transfer, or transport cannabis, cannabis paraphernalia, or related supplies or
educational materials to a cultivation facility and dispensary.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-10. Cannabis product manufacturing facilities and agents not subject to prosecution,
search, seizure, penalty, or discipline for certain conduct.
No cannabis product manufacturing facility or a cannabis product manufacturing facility agent is subject
to prosecution, search, or inspection, except by the department pursuant to § 34-20G-69, seizure, or penalty of
any kind, or may be denied any right or privilege, including civil penalty or disciplinary action by a court or
business licensing board or entity, for acting in accordance with this chapter to:
(1) Purchase or otherwise acquire cannabis from cultivation facility, and cannabis products or cannabis
from a cannabis product manufacturing facility;
(2) Possess, produce, process, manufacture, compound, convert, prepare, pack, repack, and store cannabis
or cannabis products;
(3) Deliver, transfer, or transport cannabis, cannabis products, cannabis paraphernalia, or related supplies
or educational materials to a dispensary or cannabis product manufacturing facility;
(4) Deliver, transfer, or transport cannabis to testing facility and compensate testing facility for services
provided; or
(5) Deliver, sell, supply, transfer, or transport cannabis, cannabis products, cannabis paraphernalia, or
related supplies or educational materials to a cannabis product manufacturing facility or dispensary.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-11. Testing facilities and agents not subject to prosecution, search, seizure, penalty, or
discipline for certain conduct.
No testing facility or testing facility agent is subject to prosecution, search, or inspection, except by the
department pursuant to § 34-20G-69, seizure, or penalty in any manner, or may be denied any right or privilege,
including civil penalty or disciplinary action by a court or business licensing board or entity, for acting in
accordance with this chapter to:
(1) Acquire, possess, transport, and store cannabis or cannabis products obtained from a cardholder,
nonresident cardholder or medical cannabis establishment;
(2) Return the cannabis or cannabis products to a cardholder, nonresident cardholder, or medical cannabis
establishment from whom it was obtained;
(3) Test cannabis, including for potency, pesticides, mold, or contaminants; or
(4) Receive compensation for services under this section.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-12. Sale or donation of cannabis seeds to cultivation facility.
A cardholder, nonresident cardholder, or the equivalent of a medical cannabis establishment that is
registered in another jurisdiction may sell or donate cannabis seeds to a cultivation facility in this state.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-13. Seizure or forfeiture of cannabis or related property.
Any cannabis, cannabis product, cannabis paraphernalia, or other interest in or right to property that is
possessed, owned, or used in connection with the medical use of cannabis as allowed under this chapter, or acts
incidental to such use, may not be seized or forfeited. This chapter does not prevent the seizure or forfeiture of
cannabis exceeding the amount allowed under this chapter, or prevent seizure or forfeiture if the basis for the
action is unrelated to the cannabis that is possessed, manufactured, transferred, or used in accordance with this
chapter.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-14. Possession of or application for registry identification card not grounds for search.
Possession of, or application for, a registry identification card does not constitute probable cause or
reasonable suspicion, nor may it be used to support a search of the person or property of the person possessing or
applying for the registry identification card, or otherwise subject the person or property of the person to
inspection by any governmental agency.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-15. Activity conducted in accordance with chapter lawful.
For the purposes of state law, an activity related to medical cannabis is lawful as long as it is conducted
in accordance with this chapter.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-16. Enforcement of federal law by state law enforcement officers.
No law enforcement officer employed by an agency that receives state or local government funds may
expend any state or local resources, including the officer's time, to effect any arrest or seizure of cannabis, or
conduct any investigation, on the sole basis of activity the officer believes to constitute a violation of the federal
Controlled Substances Act, 21 U.S.C. § 801 et seq., if the officer has reason to believe that the activity is in
compliance with this chapter. No officer may expend any state or local resources, including the officer's time, to
provide any information or logistical support related to any activity to any federal law enforcement authority or
prosecuting entity.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-17. Contracts enforceable.
No contract entered into by a cardholder, a medical cannabis establishment, or medical cannabis
establishment agent, or by a person who allows property to be used for an activity that is exempt from state
criminal penalties by this chapter is unenforceable on the basis that activity related to cannabis is prohibited by
federal law.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-18. Unauthorized conduct.
This chapter does not authorize any person to engage in, and does not prevent the imposition of any civil,
criminal, or other penalty for engaging in, the following conduct:
(1) Undertaking any task under the influence of cannabis, when doing so would constitute negligence or
professional malpractice;
(2) Possessing cannabis or otherwise engaging in the medical use of cannabis in any correctional facility;
(3) Smoking cannabis:
(a) On any form of public transportation; or
(b) In any public place or any place that is open to the public;
(4) Operating, navigating, or being in actual physical control of any motor vehicle, aircraft, train, or
motorboat while under the influence of cannabis, except that a registered qualifying patient or
nonresident cardholder is not considered to be under the influence of cannabis solely because of the
presence of metabolites or components of cannabis that appear in insufficient concentration to cause
impairment.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-19. Schools and landlords--Prohibited conduct.
No school or landlord may refuse to enroll or lease to and may not otherwise penalize a person solely for
the person's status as a cardholder, unless failing to do so would violate federal law or regulations or cause the
school or landlord to lose a monetary or licensing-related benefit under federal law or regulation.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-20. Qualifying patient not disqualified from medical care for cannabis use.
For the purposes of medical care, including organ and tissue transplants, a registered qualifying patient's
use of cannabis in accordance with this chapter is considered the equivalent of the authorized use of any other
medication used at the discretion of a practitioner and does not constitute the use of an illicit substance or
otherwise disqualify a qualifying patient from needed medical care.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-21. Custody and visitation rights--Child neglect or endangerment.
No person may be denied custody of or visitation rights or parenting time with a minor solely for the
person's status as a cardholder, and there is no presumption of neglect or child endangerment for conduct
allowed under this chapter, unless the person's behavior creates an unreasonable danger to the safety of the
minor as established by clear and convincing evidence.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-22. Employment and drug testing.
Except as provided in this chapter, a registered qualifying patient who uses cannabis for a medical
purpose shall be afforded all the same rights under state and local law, as the person would be afforded if the
person were solely prescribed a pharmaceutical medication, as it pertains to:
(1) Any interaction with a person's employer;
(2) Drug testing by a person's employer; or
(3) Drug testing required by any state or local law, agency, or government official.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-23. Conflict with employer's obligations or benefits under federal law.
The rights provided by §§ 34-20G-19 to 34-20G-25, inclusive, do not apply to the extent that they
conflict with an employer's obligations under federal law or regulation or to the extent that they would disqualify
an employer from a monetary or licensing-related benefit under federal law or regulation.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-24. Ingestion of cannabis at workplace--Working under the influence of cannabis.
No employer is required to allow the ingestion of cannabis in any workplace or to allow any employee to
work while under the influence of cannabis. A registered qualifying patient may not be considered to be under
the influence of cannabis solely because of the presence of metabolites or components of cannabis that appear in
insufficient concentration to cause impairment.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-25. Schools, landlords, and employers not to be penalized.
No school, landlord, or employer may be penalized or denied any benefit under state law for enrolling,
leasing to, or employing a cardholder.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-26. Petition to add serious medical condition or treatment to list of debilitating medical
conditions--Department consideration--Judicial review.
Any resident of this state may petition the department to add a serious medical condition or treatment to
the list of debilitating medical conditions as defined by this chapter. The department shall consider a petition in
the manner required by rules promulgated by the department pursuant to this chapter, including public notice
and hearing. The department shall approve or deny a petition within one hundred eighty days of submission. The
approval or denial of any petition is a final decision of the department, subject to judicial review.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-27. Cost reimbursement, permission to smoke cannabis on property, and permission to
cultivate on rental property not required.
Nothing in this chapter requires:
(1) A government medical assistance program or private insurer to reimburse a person for costs associated
with the medical use of cannabis;
(2) Any person or establishment in lawful possession of property to allow a guest, client, customer, or other
visitor to smoke cannabis on or in that property; or
(3) A landlord to allow the cultivation of cannabis on the rental property.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-28. Discipline for ingestion of cannabis at workplace and working under the influence of
cannabis permitted.
Nothing in this chapter prohibits an employer from disciplining an employee for ingesting cannabis in
the workplace or for working while under the influence of cannabis.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-29. Information required for issuance of registry identification cards--Fee.
No later than November 18, 2021, the department shall issue registry identification cards to qualifying
patients who submit the following, in accordance with rules promulgated by the department:
(1) A written certification issued by a practitioner within ninety days immediately preceding the date of an
application;
(2) The application or renewal fee;
(3) The name, address, and date of birth of the qualifying patient, except that if the applicant is homeless,
no address is required;
(4) The name, address, and telephone number of the qualifying patient's practitioner;
(5) The name, address, and date of birth of the designated caregiver, or designated caregivers, chosen by
the qualifying patient;
(6) If more than one designated caregiver is designated at any given time, documentation demonstrating
that a greater number of designated caregivers are needed due to the patient's age or medical
condition;
(7) The name of no more than two dispensaries that the qualifying patient designates, if any; and
(8) If the qualifying patient designates a designated caregiver, a designation as to whether the qualifying
patient or designated caregiver will be allowed under state law to possess and cultivate cannabis
plants for the qualifying patient's medical use.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-30. Submission of information by person responsible for medical decisions for qualifying
patient.
If the qualifying patient is unable to submit the information required by § 34-20G-29 due to the person's
age or medical condition, the person responsible for making medical decisions for the qualifying patient may do
so on behalf of the qualifying patient.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-31. Department verification of information--Issuance of registry identification card--
Verification system.
Except as provided in § 34-20G-32, the department shall:
(1) Verify the information contained in an application or renewal submitted pursuant to this chapter and
approve or deny an application or renewal within fifteen days of receiving a completed application or
renewal application;
(2) Issue registry identification cards to a qualifying patient and to a qualifying patient's designated
caregivers, if any, within five days of approving the application or renewal. A designated caregiver
shall have a registry identification card for each of the qualifying patients; and
(3) Enter the registry identification number of any dispensary the patient designates into the verification
system.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-32. Background check of designated caregiver.
The department may conduct a background check of a designated caregiver in order to carry out the
provisions of § 34-20G-31.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-33. Issuance of registry identification card to patient under age 18--Conditions.
The department may not issue a registry identification card to a qualifying patient who is younger than
eighteen years of age unless:
(1) The qualifying patient's practitioner has explained the potential risks and benefits of the medical use of
cannabis to the custodial parent or legal guardian with responsibility for health care decisions for the
qualifying patient; and
(2) The custodial parent or legal guardian with responsibility for health care decisions for the qualifying
patient consents in writing to:
(a) Allow the qualifying patient's medical use of cannabis;
(b) Serve as the qualifying patient's designated caregiver; and
(c) Control the acquisition of the cannabis, the dosage, and the frequency of the medical use of
cannabis by the qualifying patient.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-34. Grounds for denial or nonrenewal of qualifying patient registry identification card.
The department may deny an application or renewal of a qualifying patient’s registry identification card
only if the applicant:
(1) Does not provide the required information, fee, or materials;
(2) Previously had a registry identification card revoked; or
(3) Provided false information.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-35. Grounds for denial of application or nonrenewal of designated caregiver.
The department may deny an application or renewal for a designated caregiver chosen by a qualifying
patient whose registry identification card was granted only if:
(l) The designated caregiver does not meet the requirements of a designated caregiver as defined in § 34-
20G-l;
(2) The applicant does not provide the information required;
(3) The designated caregiver previously had a registry identification card revoked; or
(4) The applicant or the designated caregiver provide false information.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-36. Notice of reason for denial.
The department shall give written notice to the qualifying patient of the reason for denying a registry
identification card to the qualifying patient or to the qualifying patient's designated caregiver.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-37. Judicial review of application denial or nonrenewal.
Denial of an application or renewal under § 34-20G-34 or 34-20G-35 is considered a final department
action, subject to judicial review.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-38. Temporary qualifying patient registry identification card.
Until a qualifying patient who has submitted an application and the required fee to the department
receives a registry identification card or a denial, a copy of the patient' s application, written certification, and
proof that the application was submitted to the department is deemed a registry identification card.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-39. Temporary designated caregiver registry identification card.
Until a designated caregiver whose qualifying patient has submitted an application and the required fee
receives a registry identification card or a denial, a copy of the qualifying patient's application, written
certification, and proof that the application was submitted to the department is deemed a registry identification
card.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-40. Availability of applications--Written certification as temporary registry identification
card.
Until twenty-five days after the department makes applications available, a valid, written certification
issued within the previous year shall be deemed a registry identification card for a qualifying patient.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-41. Availability of applications--Temporary designated caregiver registry identification
card.
Until twenty-five days after the department makes applications available, the following is considered a
designated caregiver registry identification card:
(1) A copy of a qualifying patient' s valid written certification issued within the previous year; and
(2) A signed affidavit attesting that the person has significant responsibility for managing the well-being of
the patient and that the person has been chosen to assist the qualifying patient.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-42. Contents of registry identification cards.
A registry identification card shall contain all of the following:
(1) The name of the cardholder;
(2) A designation of whether the cardholder is a qualifying patient or a designated caregiver;
(3) The date of issuance and expiration date of the registry identification card;
(4) A random ten-digit alphanumeric identification number, containing at least four numbers and at least
four letters, that is unique to the cardholder;
(5) If the cardholder is a designated caregiver, the random identification number of the qualifying patient
the designated caregiver will assist;
(6) A clear indication of whether the cardholder has been designated to cultivate cannabis plants for the
qualifying patient's medical use;
(7) A photograph of the cardholder; and
(8) The phone number or website address where the card can be verified.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-43. Expiration of registry identification card.
A registry identification card expires one year after the date of issue. Unless the practitioner states in the
written certification that the qualifying patient would benefit from cannabis until a specified earlier date, then the
registry identification card expires on that date.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-44. Confidential list of persons issued registry identification cards.
The department shall maintain a confidential list of any person to whom the department has issued a
registry identification card and the addresses, phone number, and registry identification number of each person.
The list may not be combined or linked in any manner with any other list or database, nor may it be used for any
purpose not provided for in this chapter.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-45. Secure phone or web-based verification system.
Within one hundred twenty days of July 1, 2021, the department shall establish a secure phone or web-
based verification system. The verification system shall allow law enforcement personnel and medical cannabis
establishments to enter a registry identification number and determine whether the number corresponds with a
current, valid registry identification card. The system may disclose only:
(1) Whether the identification card is valid;
(2) The name of the cardholder;
(3) Whether the cardholder is a qualifying patient or a designated caregiver;
(4) Whether the cardholder is permitted to cultivate cannabis plants;
(5) The registry identification number of any affiliated registered qualifying patient; and
(6) The registry identification of the qualifying patient's dispensary or dispensaries, if any.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-46. Required notifications to department.
The following notifications are required:
(1) A registered qualifying patient shall notify the department of any change in the applicant’s name or
address, or if the patient ceases to have a debilitating medical condition, within ten days of the
change;
(2) A registered designated caregiver shall notify the department of any change in the caregiver ’s name or
address, or if the caregiver becomes aware the qualifying patient passed away, within ten days of the
change;
(3) Before a registered qualifying patient changes a designated caregiver, the patient shall notify the
department;
(4) If a registered qualifying patient changes a preference as to who may cultivate cannabis for the patient,
the patient shall notify the department;
(5) If a cardholder loses a registry identification card, the cardholder shall notify the department within ten
days of becoming aware the card has been lost; and
(6) Before a registered qualifying patient changes a designated dispensary, the patient shall notify the
department.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-47. Notifications by designated caregiver.
Any notification that a registered qualifying patient is required to make under this chapter may be made
by the patient's designated caregiver if the qualifying patient is unable to make the notification due to age or
medical condition.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-48. Issuance of new registry identification card following required notification to
department.
If a cardholder notifies the department of any item listed in § 34-20G-46, but remains. eligible under this
chapter, the department shall issue the cardholder a new registry identification card with a new random ten-digit
alphanumeric identification number within ten days of receiving the updated information and a twenty dollar
fee. If the person notifying the department is a registered qualifying patient, the department shall also issue the
patient's registered designated caregiver, if any, a new registry identification card within ten days of receiving
the updated information.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-49. Card void upon notice to department that patient no longer qualifies--Disposal of
cannabis.
If the registered qualifying patient's certifying practitioner notifies the department in writing that the
registered qualifying patient has ceased to suffer from a debilitating medical condition or that the practitioner no
longer believes the patient would receive therapeutic or palliative benefit from the medical use of cannabis, the
card is void. However, the registered qualifying patient shall have fifteen days to dispose of or give away any
cannabis in the registered qualifying patient's possession.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-50. Theft or loss of cannabis--Notice to department.
A medical cannabis establishment shall notify the department within one business day of any theft or
significant loss of cannabis.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-51. Medical purpose defense to prosecution involving cannabis.
Except as provided in § 34-20G-18 and this section, a person may assert the medical purpose for using
cannabis as a defense to any prosecution involving cannabis, and such defense is presumed valid where the
evidence shows that:
(1) A practitioner has stated that, in the practitioner's professional opinion, after having completed a full
assessment of the person's medical history and current medical condition made in the course of a
bona fide practitioner-patient relationship, the patient has a debilitating medical condition and the
potential benefits of using cannabis for medical purposes would likely outweigh the health risks for
the person;
(2) The person was in possession of no more than three ounces of cannabis, the amount of cannabis
products allowed by department rules, six cannabis plants minimum or as prescribed by a physician,
and the cannabis produced by those plants;
(3) The person was engaged in the acquisition, possession, use, manufacture, cultivation, or transportation
of cannabis, paraphernalia, or both, relating to the administration of cannabis to treat or alleviate the
person's debilitating medical condition or symptoms associated with the person's debilitating medical
condition; and
(4) Any cultivation of cannabis and storage of more than three ounces of cannabis occurred in a secure
location that only the person asserting the defense could access.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-52. Proof of unavailability of defense to prosecution.
An affirmative defense and motion to dismiss shall fail if the prosecution proves that:
(1) The person had a registry identification card revoked for misconduct; or
(2) The purpose for the possession or cultivation of cannabis was not solely for palliative or therapeutic use
by the person with a debilitating medical condition who raised the defense.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-53. Registry identification card not required to raise defense.
A person is not required to possess a registry identification card to raise the affirmative defense set forth
in § 34-20G-51.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-54. Person using cannabis for medical purpose not subject to discipline or forfeiture.
If a person demonstrates the person's medical purpose for using cannabis pursuant to this chapter, except
as provided in § 34-20G-18, the person is not subject to the following for the person's use of cannabis for
medical purposes:
(1) Disciplinary action by an occupational or professional licensing board or bureau; or
(2) Forfeiture of any interest in or right to any property other than cannabis.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-55. Application for medical cannabis establishment--Contents and conditions--Time for
registration.
Not later than ninety days after receiving an application for a medical cannabis establishment, the
department shall register the prospective medical cannabis establishment and issue a registration certificate and a
random ten-digit alphanumeric identification number if all of the following conditions are satisfied:
(1) The prospective medical cannabis establishment has submitted all of the following:
(a) The application fee;
(b) An application, including:
(i) The legal name of the prospective medical cannabis establishment;
(ii) The physical address of the prospective medical cannabis establishment that is not
within one thousand feet of a public or private school existing before the date of the
medical cannabis establishment application;
(iii) The name and date of birth of each principal officer and board member of the proposed
medical cannabis establishment; and
(iv) Any additional information requested by the department;
(c) Operating procedures consistent with rules for oversight of the proposed medical cannabis
establishment, including procedures to ensure accurate record keeping and adequate security
measures;
(d) If the city or county where the proposed medical cannabis establishment would be located has
enacted zoning restrictions, a sworn statement certifying that the proposed medical cannabis
establishment does not violate the restrictions;
(e) If the city or county where the proposed medical cannabis establishment requires a local
registration, license, or permit, a copy of the registration, license, or permit;
(2) None of the principal officers or board members has served as a principal officer or board member for a
medical cannabis establishment that has had its registration certificate revoked;
(3) None of the principal officers or board members is under twenty-one years of age; and
(4) At least one principal officer is a resident of this state.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-56. Local government limitation on number of medical cannabis establishments.
If a local government has enacted a numerical limit on the number of medical cannabis establishments in
the locality and a greater number of applicants seek registration, the department shall solicit and consider input
from the local government as to its preference for registration.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-57. Renewal of medical cannabis establishment registration.
The department shall issue a renewal registration certificate within ten days of receipt of the prescribed
renewal application and renewal fee from a medical cannabis establishment if the establishment's registration
certificate is not under suspension and has not been revoked.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-58. Local government ordinances governing medical cannabis establishments.
A local government may enact an ordinance not in conflict with this chapter, governing the time, place,
manner, and number of medical cannabis establishments in the locality. A local government may establish civil
penalties for violation of an ordinance governing the time, place, and manner of a medical cannabis
establishment that may operate in the locality.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-59. Local government prohibition of dispensaries not permitted.
No local government may prohibit a dispensary, either expressly or through the enactment of an
ordinance that makes the operation of the dispensary impracticable in the jurisdiction.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-60. Local licensing of medical cannabis establishments--Fee.
A local government may require a medical cannabis establishment to obtain a local license, permit, or
registration to operate, and may charge a reasonable fee for the local license, permit, or registration.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-61. Criminal background check of medical cannabis establishment officers, employees, and
volunteers.
Each medical cannabis establishment shall conduct a background check into the criminal history of each
person seeking to become a principal officer, board member, agent, volunteer, or employee before the person
begins working at the medical cannabis establishment.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-62. Employment restrictions on medical cannabis establishments.
A medical cannabis establishment may not employ any person who:
(1) Was convicted of a disqualifying felony offense; or
(2) Is under twenty-one years of age.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-63. Medical cannabis establishment procedures for oversight and record keeping.
Each medical cannabis establishment shall have operating documents that include procedures for the
oversight of the medical cannabis establishment and procedures to ensure accurate record keeping.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-64. Medical cannabis establishment security measures.
A medical cannabis establishment shall implement appropriate security measures designed to deter and
prevent the theft of cannabis and unauthorized entrance into any area containing cannabis.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-65. Cultivation, harvesting, manufacturing, and packaging of cannabis.
All cultivation, harvesting, manufacturing and packaging of cannabis shall take place in a secure facility
at a physical address provided to the department during the registration process. The secure facility may only be
accessed by agents of the medical cannabis establishment, emergency personnel, and adults who are twenty-one
years of age and older and who are accompanied by a medical cannabis establishment agent.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-66. Production of cannabis products.
No medical cannabis establishment other than a cannabis product manufacturer may produce cannabis
concentrates, cannabis extractions, or other cannabis products.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-67. Sharing office space and patient referrals to practitioners prohibited.
A medical cannabis establishment may not share office space with or refer a patient to a practitioner.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-68. Consumption of cannabis on medical cannabis establishment property prohibited.
A medical cannabis establishment may not permit any person to consume cannabis on the property of a
medical cannabis establishment.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-69. Inspection of medical cannabis establishments.
A medical cannabis establishment is subject to inspection by the department during business hours.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-70. Conditions for dispensing cannabis.
Before cannabis may be dispensed to a cardholder or nonresident cardholder, a dispensary agent:
(1) Shall make a diligent effort to verify that the registry identification card or registration presented to the
dispensary is valid;
(2) Shall make a diligent effort to verify that the person presenting the documentation is the person
identified on the document presented to the dispensary agent;
(3) May not dispense an amount of cannabis to a person that would cause the person to possess more than
the allowable amount of cannabis; and
(4) Shall make a diligent effort to verify that the dispensary is the current dispensary that was designated
by the cardholder or nonresident cardholder.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-71. Limitations on amount of cannabis dispensed.
A dispensary may not dispense more than three ounces of cannabis to a nonresident cardholder or a
registered qualifying patient, directly or via a designated caregiver, in any fourteen-day period. A dispensary
shall ensure compliance with the limitation under this section by maintaining internal, confidential records that
include records specifying how much cannabis is dispensed to a nonresident cardholder or registered qualifying
patient and whether it is dispensed directly to a registered qualifying patient or to the designated caregiver.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-72. Promulgation of rules--Violation of required or prohibited action as misdemeanor.
Not later than October 29, 2021, the department shall promulgate rules pursuant to chapter 1-26:
(1) Governing the manner in which the department shall consider petitions from the public to add a
debilitating medical condition or treatment to the list of debilitating medical conditions as defined by
this chapter, including public notice of and an opportunity to comment in public hearings on the
petitions;
(2) Establishing the form and content of registration and renewal applications submitted under this chapter;
(3) Establishing a system to numerically score competing medical cannabis establishment applicants, in
cases where more applicants apply than are allowed by the local government, that includes analysis
of:
(a) The preference of the local government;
(b) In the case of dispensaries, the suitability of the proposed location and its accessibility for
patients;
(c) The character, veracity, background, qualifications, and relevant experience of principal officers
and board members; and
(d) The business plan proposed by the applicant, that in the case of a cultivation facility or
dispensary shall include the ability to maintain an adequate supply of cannabis, plans to
ensure safety and security of patrons and the community, procedures to be used to prevent
diversion, and any plan for making cannabis available to low-income registered qualifying
patients;
(4) Governing the manner in which the department shall consider applications for and renewals of registry
identification cards, that may include creating a standardized written certification form;
(5) Governing medical cannabis establishments to ensure the health and safety of qualifying patients and
prevent diversion and theft without imposing an undue burden or compromising the confidentiality of
a cardholder, including:
(a) Oversight requirements;
(b) Record-keeping requirements;
(c) Security requirements, including lighting, physical security, and alarm requirements;
(d) Health and safety regulations, including restrictions on the use of pesticides that are injurious to
human health;
(e) Standards for the manufacture of cannabis products and both the indoor and outdoor cultivation
of cannabis by a cultivation facility;
(f) Requirements for the transportation and storage of cannabis by a medical cannabis
establishment;
(g) Employment and training requirements, including requiring that each medical cannabis
establishment create an identification badge for each agent;
(h) Standards for the safe manufacture of cannabis products, including extracts and concentrates;
(i) Restrictions on the advertising, signage, and display of medical cannabis, provided that the
restrictions may not prevent appropriate signs on the property of a dispensary, listings in
business directories including phone books, listings in marijuana-related or medical
publications, or the sponsorship of health or not-for-profit charity or advocacy events;
(j) Requirements and procedures for the safe and accurate packaging and labeling of medical
cannabis; and
(k) Certification standards for testing facilities, including requirements for equipment and
qualifications for personnel;
(6) Establishing procedures for suspending or terminating the registration certificates or registry
identification cards of cardholders and medical cannabis establishments that commit multiple or
serious violations of this chapter;
(7) Establishing labeling requirements for cannabis and cannabis products, including requiring cannabis
product labels to include the following:
(a) The length of time it typically takes for a product to take effect;
(b) Disclosing ingredients and possible allergens;
(c) A nutritional fact panel; and
(d) Requiring that edible cannabis products be clearly identifiable, when practicable, with a
standard symbol indicating that it contains cannabis;
(8) Establishing procedures for the registration of nonresident cardholders and the cardholder's designation
of no more than two dispensaries, which shall require the submission of:
(a) A practitioner's statement confirming that the patient has a debilitating medical condition; and
(b) Documentation demonstrating that the nonresident cardholder is allowed to possess cannabis or
cannabis preparations in the jurisdiction where the nonresident cardholder resides;
(9) Establishing the amount of cannabis products, including the amount of concentrated cannabis, each
cardholder and nonresident cardholder may possess; and
(10) Establishing reasonable application and renewal fees for registry identification cards and registration
certificates, according to the following:
(a) Application fees for medical cannabis establishments may not exceed five thousand dollars,
with this upper limit adjusted annually for inflation;
(b) The total fees collected shall generate revenues sufficient to offset all expenses of implementing
and administering this chapter;
(c) A sliding scale of patient application and renewal fees based upon a qualifying patient's
household income;
(d) The fees charged to qualifying patients, nonresident cardholders, and caregivers shall be no
greater than the costs of processing the application and issuing a registry identification card or
registration; and
(e) The department may accept donations from private sources to reduce application and renewal
fees.
A violation of a required or prohibited action under any rule authorized by this section is a Class 2
misdemeanor.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-73. Civil penalty for failure to provide required notice.
A cardholder or medical cannabis establishment who fails to provide a notice required by this chapter is
subject to a civil penalty of no more than one hundred fifty dollars. Any civil penalty collected shall be
deposited in the state general fund.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-74. Intentional cannabis sale or transfer to unauthorized person by medical cannabis
establishment or agent as felony--Disqualification.
In addition to any other penalty under law, a medical cannabis establishment or an agent of a medical
cannabis establishment who intentionally sells or otherwise transfers cannabis in exchange for anything of value
to a person other than a cardholder, a nonresident cardholder, or to a medical cannabis establishment or its agent
is guilty of a Class 6 felony. A person convicted under this section may not continue to be affiliated with the
medical cannabis establishment and is disqualified from any future affiliation with any medical cannabis
establishment under this chapter.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-75. Intentional cannabis sale or transfer by cardholder to unauthorized person as felony.
In addition to any other penalty under law, a cardholder or nonresident cardholder who intentionally sells
or otherwise transfers cannabis in exchange for anything of value to a person other than a cardholder, a
nonresident cardholder, or to a medical cannabis establishment or its agent is guilty of a Class 6 felony.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-76. False statement to law enforcement official about medical use of cannabis as
misdemeanor.
A person who intentionally makes a false statement to a law enforcement official about any fact or
circumstance relating to the medical use of cannabis to avoid arrest or prosecution is guilty of a Class 2
misdemeanor. The penalty is in addition to any other penalty that may apply for making a false statement or for
the possession, cultivation, or sale of cannabis not protected by this chapter. If a person convicted of violating
this section is a cardholder, the person is disqualified from being a cardholder under this chapter.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-77. Knowing submission of false records or documents to certify medical cannabis
establishment as felony.
A person who knowingly submits false records or documentation required by the department to certify a
medical cannabis establishment under this chapter is guilty of Class 6 felony.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-78. Certain conduct of practitioner as misdemeanor.
A practitioner who knowingly refers patients to a medical cannabis establishment or to a designated
caregiver, who advertises in a medical cannabis establishment, or who issues written certifications while holding
a financial interest in a medical cannabis establishment is guilty of a Class 2 misdemeanor.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-79. Breach of confidentiality of information as misdemeanor.
It is a Class 2 misdemeanor for any person, including an employee or official of the department or
another state agency or local government, to breach the confidentiality of information obtained under this
chapter.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-80. Suspension or revocation of medical cannabis establishment registration certificate.
The department may on its own motion or on complaint, after investigation and opportunity for a public
hearing at which the medical cannabis establishment has been afforded an opportunity to be heard, suspend or
revoke a registration certificate for multiple negligent or knowing violations or for a serious and knowing
violation by the registrant or any of its agents of this chapter.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-81. Notice of suspension, revocation, or sanction--Notice of hearing--Duration of
suspension.
The department shall provide notice of suspension, revocation, fine, or other sanction, as well as the
required notice of the hearing, by mailing the same in writing to the medical cannabis establishment at the
address on the registration certificate. A suspension may not be for a longer period than six months.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-82. Permitted and prohibited conduct during suspension.
A medical cannabis establishment may continue to possess cannabis during a suspension, but it may not
dispense, transfer, or sell cannabis. A cultivation facility may continue to cultivate and possess cannabis plants
during a suspension, but it may not dispense, transfer, or sell cannabis.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-83. Revocation of registry identification card for cannabis sale to unauthorized person--
Disqualification.
The department shall immediately revoke the registry identification card of any cardholder who sells
cannabis to a person who is not allowed to possess cannabis for medical purposes under this chapter, and the
cardholder is disqualified from being a cardholder under this chapter.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-84. Revocation of registry identification card for multiple or serious violations.
The department may revoke the registry identification card of any cardholder who knowingly commits
multiple unintentional violations or a serious knowing violation of this chapter.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-85. Judicial review of revocation.
Revocation under § 34-20G-80 is a final decision of the department subject to judicial review.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-86. Confidential data.
Data in a registration application and supporting data submitted by a qualifying patient, designated
caregiver, nonresident cardholder or medical cannabis establishment, including data on designated caregiver or
practitioner, is private data that is confidential.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-87. Restrictions on data maintained by department.
Data kept or maintained by the department may not be used for any purpose not provided for in this
chapter and may not be combined or linked in any manner with any other list or database.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-88. Permitted disclosure of data maintained by department.
Data kept or maintained by the department may be disclosed solely for:
(1) The verification of a registration certificate or registry identification card pursuant to this chapter;
(2) Submission of the annual report required by this chapter;
(3) Notification of state or local law enforcement of an apparent criminal violation of this chapter;
(4) Notification of state and local law enforcement about falsified or fraudulent information submitted for
the purpose of obtaining or renewing a registry identification card; or
(5) Notification of the South Dakota Board of Medical and Osteopathic Examiners if there is reason to
believe that a practitioner provided a written certification and the department has reason to believe
the practitioner otherwise violated the standard of care for evaluating a medical condition.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-89. Restrictions on data maintained by medical cannabis establishments.
Any information kept or maintained by a medical cannabis establishment may only identify a cardholder
by registry identification number and may not contain names or other personal identifying information.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-90. Cardholder's request for department to confirm cardholder status to others.
At the cardholder's request, the department may confirm the cardholder's status as a registered qualifying
patient or a registered designated caregiver to a third party, such as a landlord, school, medical professional, or
court.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-91. Destruction of unused media containing cardholder information.
Any department hard drive or other data-recording media that is no longer in use and that contains
cardholder information shall be destroyed.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-92. Oversight committee membership.
The Executive Board of the Legislative Research Council shall appoint an oversight committee
comprised of: one member of the House of Representatives, one member of the Senate, one Department of
Criminal Investigation agent, one staff member from the Office of the Attorney General, two representatives of
law enforcement, one representative from the department, one practitioner with experience in medical cannabis
issues, one nurse, one board member or principal officer of a cannabis testing facility, one person with
experience in policy development or implementation in the field of medical cannabis, and three qualifying
patients.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-93. Oversight committee duties.
The oversight committee shall meet at least two times per year for the purpose of evaluating and making
recommendations to the Legislature and the department regarding:
(1) The ability of qualifying patients in all areas of the state to obtain timely access to high-quality medical
cannabis;
(2) The effectiveness of the dispensaries and cultivation facilities, individually and together, in serving the
needs of qualifying patients, including the provision of educational and support services by
dispensaries, the reasonableness of their prices, whether they are generating any complaints or
security problems, and the sufficiency of the number operating to serve the state's registered
qualifying patients;
(3) The effectiveness of the cannabis testing facilities, including whether a sufficient number are operating;
(4) The sufficiency of the regulatory and security safeguards contained in this chapter and adopted by the
department to ensure that access to and use of cannabis cultivated is provided only to cardholders;
(5) Any recommended additions or revisions to the department regulations or this chapter, including
relating to security, safe handling, labeling, and nomenclature; and
(6) Any research studies regarding health effects of medical cannabis for patients.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-94. Annual report to the Legislature--Information excluded.
The department shall report annually to the Legislature on the number of applications for registry
identification cards received, the number of qualifying patients and designated caregivers approved, the number
of registry identification cards revoked, the number of each type of medical cannabis establishment registered,
and the expenses incurred and revenues generated from the medical cannabis program. The department may not
include identifying information on a qualifying patient, designated caregiver, or practitioner in the report.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
34-20G-95. Administration of medical cannabis to students.
The Department of Education and the department shall establish policy to allow students who are
medical cannabis cardholders to have their medicine administered in school in accordance with their physician's
recommendation. This policy shall be implemented the first day of the new school year following passage of this
chapter. The departments shall implement substantively identical provisions to Colorado Revised Statute 22-1-
119.3 as of January 1, 2019.
Source: Initiated Measure No. 26, approved Nov. 3, 2020, eff. Jul. 1, 2021.
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June 23, 2021
ARTICLE 44:90
MEDICAL CANNABIS
Chapter
44:90:01 Definitions.
44:90:02 Registry identification cards.
44:90:03 Registration certificates.
44:90:04 Establishments.
44:90:05 Cannabis cultivation facilities.
44:90:06 Cannabis testing facilities.
44:90:07 Cannabis product manufacturing facilities.
44:90:08 Cannabis dispensaries.
44:90:09 Sampling and testing.
44:90:10 Packaging, labeling, and advertising.
44:90:11 Recordkeeping.
44:90:12 Enforcement.
44:90:13 Petitions to recognize debilitating medical conditions.
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June 23, 2021
CHAPTER 44:90:01
DEFINITIONS
44:90:01:01. Definitions.
Terms defined in SDCL 34-20G-1 shall have the same meaning in this article. In addition, terms
used in this article mean:
(1) “Agent identification badge,” means a credential issued by the department to an
establishment for the use by an agent while performing work-related duties;
(2) “Allowable quantity of cannabis products,” means an amount of cannabis products that may
be possessed by a cardholder or nonresident cardholder pursuant to SDCL 34-20G-1(1)(b);
(3) “Analyte,” means a chemical, compound, element, bacteria, yeast, fungus, or toxin that is
identified or measured by testing;
(4) “Analytical test,” means the use of a single technology to detect the presence or
concentration of a single analyte on one or more matrices;
(5) “Batch identifier,” means a unique number or code assigned by an establishment to a
quantity of cannabis, cannabis extract, or cannabis products for testing;
(6) “Cannabis beverage,” means a liquid edible cannabis product with a concentration of less
than 1 mg of THC per ounce of liquid;
(7) “Cannabis extract,” means the resin extracted from any part of a cannabis plant;
(8) “Cannabis oil,” means an edible cannabis product using a food safe oil as the primary
ingredient;
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June 23, 2021
(9) “Cannabis waste,” means cannabis flower or trim, cannabis seeds, cannabis products,
byproducts containing cannabis, or cannabis plants, excluding stalks without trichomes and
root balls, that are unfit for retail transfer to another cannabis establishment;
(10) “Certificate of analysis,” means a written report of the results of analytical testing,
including whether the results indicate compliance with this article;
(11) “Chain of custody,” means documentation of the handling of cannabis and cannabis
products to ensure the accuracy of cannabis testing and preventing diversion;
(12) “Collective,” means two or more cardholders who physically assist each other in the act
of cultivation or processing of cannabis for medical use, except that the sharing of an
enclosed, locked facility for cultivation by two or more cardholders in their own dwelling
shall not be considered a collective;
(13) “Competitive application,” means a medical cannabis establishment application that is
scored numerically by the department, in cases where more applicants apply than are allowed
by the local government;
(14) “Concentrated cannabis,” means cannabis extract or a compound, manufacture, salt,
derivative, mixture, or preparation from such resin, including hashish;
(15) “Equivalent cannabis weight,” means the weight, in ounces, that a given quantity of
cannabis product counts against the total allowable amount of cannabis under 34-20G-1(1);
(16) “Exit packaging,” means a bag (single use or reusable), box, or other container for use in
transporting cannabis, cannabis extract, or cannabis products after purchase at a dispensary;
(17) “Extended plant count,” means the authorized cultivation of more than three plants
simultaneously for a single patient’s use;
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June 23, 2021
(18) “Flower,” means the pistillate reproductive organs of a mature cannabis plant, whether
processed or unprocessed, including the flowers and buds of the plant;
(19) “Immature plant,” means a cannabis plant that is larger than a seedling but has not yet
flowered;
(20) “Index factor,” means the annual percentage change in the consumer price index for
urban wage earners and clerical workers as computed by the Bureau of Labor Statistics of the
United States Department of Labor, for the year immediately preceding the year of
adjustment;
(21) “Inhaled cannabis product,” means cannabis concentrate or a cannabis product that is
intended to be consumed by inhalation, including pre-rolled cannabis cigarettes, vaporizer
cartridges, and vaporizer pens;
(22) “Inherently hazardous substance,” means any solvent or chemical, other than ethanol,
with a flash point at or lower than 100 degrees Fahrenheit;
(23) “Inventory record,” means a daily electronic record of all cannabis, including seeds,
seedlings, plants, extracts, or products;
(24) “Inventory tracking system,” means an electronic system specified by the department for
the purposes of identifying and preventing diversion and protecting patients from unsafe
cannabis, cannabis extracts, or cannabis products;
(25) “ISO/IEC 17025 accreditation,” means accreditation by the International Accreditation
Service (IAS), the American Association for Laboratory Accreditation (A2LA), the ANSI
National Accreditation Board (ANAB), or another laboratory accreditation board that the
testing facility meets General Requirements for the Competence of Testing and Calibration
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Laboratories developed by the International Organization for Standardization and the
International Electrotechnical Commission for a particular analyte and technology;
(26) “Low-income qualifying patient,” means a qualifying patient whose household has a
gross monthly income that is 130 percent or less of the federal poverty level;
(27) “Marketing layer,” means the outermost layer of a retail sale container, which is most
predominantly apparent and visible;
(28) “Matrix,” means a component or substrate that contains an analyte being tested for;
(29) “Mature plant,” means a cannabis plant that has flowered;
(30) “Method,” means a body of procedures and techniques for performing an activity,
including sampling, chemical analysis or quantification, systematically presented in the order
in which they are to be executed;
(31) “Nationally recognized testing laboratory,” means an independent laboratory recognized
by the Occupational Health and Safety Administration pursuant to 29 CFR section 1910.7
(2020);
(32) “Non usable,” means unfit for sale or transfer;
(33) “Sample identifier,” means a unique number or code assigned to a sample to be tested by
a testing facility, either by the establishment submitting the sample or an agent of the testing
facility;
(34) “Seedling,” means a nonflowering cannabis plant or rooted cutting that measures 24
inches or less from the base of the main plant stalk to the most distant point of the plant's leaf
stems or branches;
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(35) “Synthetic,” means formulated or manufactured by a chemical process or by a process
that chemically changes a substance extracted from naturally occurring plant, animal, or
mineral sources;
(36) “Technology,” means a specific arrangement of analytical instruments, detection systems
and/or preparation techniques;
(37) “Testing sample record,” means a daily electronic record maintained by an establishment
of batch identifiers, sample identifiers, and associated information;
(38) “THC,” means delta-9 tetrahydrocannabinol;
(39) “Tincture,” means a liquid edible cannabis product with a concentration of greater than 1
mg of THC per ounce of liquid in the form of ethanol, propylene glycol, glycerin, or food
safe oil;
(40) “Topical cannabis product,” means a non-edible cannabis product that is intended to be
applied topically, including salves, creams, lotions, transdermal patches, or balms;
(41) “Transaction record,” means a daily electronic record created and maintained by a
dispensary to track transactions with patients;
(42) “Transfer record,” means a daily electronic record of any acquisition of seeds, seedlings,
plants, cannabis, or cannabis products and any transfer of cannabis or cannabis products to
another medical cannabis establishment;
(43) “Trim,” means trichome-containing leaves of the cannabis plant that have been
intentionally removed during cultivation; and
(44) “Valid form of personal identification,” means an unexpired form of identification
acceptable for voter identification pursuant to SDCL section 12-18-6.1.
Source:
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General Authority:
Law Implemented:
Reference: International Organization for Standardization & International Electrotechnical
Commission. (2018). ISO/IEC 17025:2017: General Requirements for the Competence of
Testing and Calibration Laboratories. https://www.iso.org/standard/66912.html
CHAPTER 44:90:02
REGISTRY IDENTIFICATION CARDS
Section
44:90:02:01 Practitioner’s written certification – Debilitating Medical Condition –
Recommendation for medical use of cannabis.
44:90:02:02 Practitioner certification – Recommendation for cultivation of cannabis –
Extended plant count.
44:90:02:03 Patient registry identification card application requirements – Initial
application.
44:90:02:04 Patient designation of caregivers – Minor patients – Person responsible for
making medical decisions -- Designation by residents of health care
facility or residential care facility.
44:90:02:05. Application to cultivate cannabis -- Patient designation of caregivers to
cultivate cannabis.
44:90:02:06 Registry identification card renewal requirements.
44:90:02:07 Change of designation of caregivers – Change of designation to cultivate.
44:90:02:08 Nonresident registration – Required documentation.
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44:90:02:09 Nonresident registration – Identification number.
44:90:02:10 Allowable quantity of cannabis products.
44:90:02:11 Fees for registry identification cards.
44:90:02:01. Practitioner’s written certification – Debilitating medical condition –
Recommendation for medical use of cannabis.
1. Except in connection with nonresidents, the department shall reject a written certification not
issued by a physician currently licensed pursuant to SDCL chapter 36-4.
2. A practitioner’s written certification shall be on a form supplied by the Department and shall
include:
(A) The practitioner’s name and address;
(B) The practitioner’s South Dakota medical license and National Practitioner Identification
numbers;
(C) Certification that the practitioner has assessed the patient's medical history and current
medical condition, including an in-person physical examination;
(D) The date on which the physical examination was conducted;
(E) Certification that the patient has a debilitating medical condition, as defined by 34-20G-
1(8), specifying the International Classification of Diseases, Tenth Revision (ICD-10)
code;
(F) Certification that the practitioner and patient have discussed treatment options for the
patient’s debilitating medical condition, including the benefits and risks of the medical
use of cannabis;
(G) Certification that the practitioner is available for further consultation with the patient as
required;
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(H) The date, if applicable, on which the patient’s need for the medical use of cannabis is
expected to end; and
(I) The number of caregivers, if more than one, that the patient’s age or medical condition
necessitates.
Source: _
General Authority: SDCL 34-20G-72(4)
Law Implemented: SDCL 34-20G-29
Reference: National Center for Health Statistics. (2021). International Classification of Diseases,
10th Revision, Clinical Modification. https://icd10cmtool.cdc.gov/
44:90:02:02. Practitioner certification – Recommendation for cultivation of cannabis –
Extended plant count.
1. Except in connection with nonresidents, the department shall reject a recommendation for the
cultivation of cannabis not issued by a physician currently licensed pursuant to SDCL
chapter 36-4.
2. Unless the practitioner specifies otherwise, a recommendation to allow cultivation of
cannabis shall be for three plants and shall expire on the same date as the patient’s registry
identification card.
3. If the practitioner recommends the cultivation of more than three plants, the recommendation
shall specify the reasons for the extended plant count, including:
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(A) The research on which the practitioner relied in calculating the amount of cannabis
required by the patient and that the risks associated with using that amount of cannabis
are outweighed by the benefits;
(B) The difficulty the patient would experience in obtaining an adequate supply of cannabis
from dispensaries due to the patient’s place of residence or level of disability;
(C) The practitioner’s reasoning as to why the extended plant count does not create an undue
risk of diversion or abuse; and
(D) Any other factors justifying the recommendation.
4. A recommendation for the cultivation of more than three plants shall expire 90 days after the
date of the recommendation.
Source: _
General Authority: SDCL 34-20G-72(4)
Law Implemented: SDCL 34-20G-29
44:90:02:03. Patient registry identification card application requirements – Initial
application.
A person with a debilitating medical condition, or the person responsible for making medical
decisions for that person, must apply for a patient registry identification card by submitting:
1. A completed application on a form supplied by the Department, which shall contain all
information required by SDCL 34-20G-29 and 34-20G-33;
2. A completed practitioner certification on a form supplied by the Department;
3. A photocopy of a valid form of personal identification;
4. A photograph meeting all requirements for a United States passport;
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5. If a low-income patient, documentation of household income, including:
(A) If employed, wage stubs or earning statements for the past 30 days;
(B) If self-employed, most recent federal income tax return and self-employment ledgers;
(C) Proof of all other income (including Social Security, Supplemental Security Income,
workers’ compensation, unemployment benefits, Bureau of Indian Affairs general
assistance, child support, rental income, veterans’ benefits, pensions, and interest income)
for the previous 12 months; and
(D) Most recent financial statement from checking accounts, savings accounts, certificates of
deposit, credit union accounts, retirement accounts, stocks, bonds, or dividends; and
6. The required fee, pursuant to ARSD 44:90:02:11.
Source: _
General Authority: SDCL 34-20G-72(4)
Law Implemented: SDCL 34-20G-29 and 34-20G-33
44:90:02:04. Patient designation of caregivers – Minor patients – Person responsible for
making medical decisions -- Residents of health care facility or residential care facility.
1. A qualifying patient may designate an eligible individual as a caregiver by submitting:
(A) A completed designation on a form supplied by the Department;
(B) The caregiver’s sworn statement that the caregiver has not been convicted of a
disqualifying felony offense in the previous 10 years;
(C) Any additional fees.
2. A qualifying patient under 21 years of age must designate at least one caregiver.
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3. Each person designated as a caregiver to one or more qualifying patients shall submit to the
Division of Criminal Investigation once every 2 years:
(A) A photocopy of a valid form of personal identification;
(B) A Division of Criminal Investigation fingerprint card processed by a local law
enforcement agency;
(C) An authorization and release form releasing the results of a state-only background check
to the department, and payment of any fee charged by the Division of Criminal
Investigation.
4. A caregiver must submit a photograph meeting all requirements for a United States passport
once every 5 years.
5. A caregiver must acknowledge in writing the prohibition of remuneration other than direct
costs incurred for assisting with the registered qualifying patient's medical use of cannabis,
pursuant to SDCL 34-20G-2(2).
6. If a practitioner has recommended that a patient younger than 18 years of age have multiple
caregivers, the custodial parents or legal guardians may designate other caregivers as
advised.
7. The person responsible for making medical decisions for a qualifying patient 18 years of age
or older, if qualified to be a caregiver, shall be designated caregiver to the qualifying patient.
If the practitioner has recommended that the patient have multiple caregivers, the person
responsible for making medical decisions may designate other caregivers as advised.
8. The designation of a caregiver who is an employee of a health care facility or residential care
facility to act as a caregiver on the premises of the facility requires the signature of an officer
of the facility.
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9. The designation shall have the same expiration date as the expiration of the qualifying
patient’s registry identification card.
Source: __
General Authority: SDCL 34-20G-72(4)
Law Implemented: SDCL 34-20G-1(10), 34-20G-2(2), 34-20G-30, SDCL 34-20G-31, 34-20G-
33, 34-20G-35, and 34-20G-39
44:90:02:05. Application to cultivate cannabis -- Patient designation of caregivers to
cultivate cannabis.
1. A patient applying to cultivate cannabis or designate a caregiver to cultivate cannabis on the
patient’s behalf must submit:
(A) A practitioner’s recommendation for the cultivation of cannabis;
(B) A diagram and photographs of the enclosed, locked facility in which the cannabis will be
cultivated; and
(C) The fee required by ARSD 44:90:02:11.
2. A qualifying patient under 21 years of age may not cultivate cannabis but may designate a
caregiver to cultivate cannabis on the patient’s behalf.
3. Upon approval of the application, the Department will issue a two-part registry identification
card to the patient or caregiver designated to cultivate cannabis:
(A) One part of the registration card must be posted inside the enclosed, locked facility in
which the cannabis is cultivated; and
(B) The other part of the registration card must be carried by the patient or caregiver.
4. Only one person may cultivate cannabis on behalf of a patient, except that:
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(A) A qualifying patient may share the designation with a designated caregiver who resides in
the same dwelling; and
(B) Two custodial parents or legal guardians of a qualifying patient under 18 years of age
who reside in the same dwelling may share the designation.
5. The entirety of a patient’s cannabis must be cultivated in a single enclosed, locked facility.
6. No caregiver may simultaneously cultivate an extended plant count for more than one
qualifying patient.
7. Two or more caregivers may not form a collective.
8. Two or more caregivers may not cultivate cannabis in a single-unit building or in a unit of a
multi-unit building, unless expressly permitted by SDCL chapter 34-20G.
Source: __
General Authority: SDCL 34-20G-72(4)
Law Implemented: SDCL 34-20G-1(10), 34-20G-1(13), 34-20G-29, 34-20G-33, and 34-20G-
51
44:90:02:06. Registry identification card renewal requirements.
1. A qualifying patient shall submit a renewal application, with the required fee, up to 45 days
prior to the expiration of the patient’s registry identification card on a form supplied by the
department.
2. A qualifying patient may designate caregivers, including changing the designation, at the
time of renewal on a form supplied by the Department.
Source: __
General Authority: SDCL 34-20G-72(4)
Law Implemented: SDCL 34-20G-29 and 34-20G-32
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44:90:02:07. Change of designation of caregivers – Change of designation to cultivate.
1. A qualifying patient or the qualifying patient’s legal representative may change the
designation of caregivers at any time, including:
(A) Substituting a new caregiver for a previously designated caregiver;
(B) Adding an additional caregiver if recommended by a practitioner;
(C) Adding a caregiver while a resident of a health care or residential care facility; or
(D) If cannabis cultivation is authorized, designating a caregiver to cultivate cannabis for the
patient, or changing or ending such designation.
2. The process for designating a replacement caregiver or designating an additional caregiver
shall be the same as designation at the time of an initial or renewal application, with the
addition of any fee for issuing new registry identification cards to the patient and all
caregivers.
3. If the change results in the removal of one or more caregivers:
(A) The patient shall notify each such caregiver in writing and shall certify to the department
that notice has been given;
(B) The caregiver shall have 15 days to return the registry identification card associated with
that patient; and
4. If the application indicates that the patient no longer wishes a caregiver to cultivate cannabis
on the patient’s behalf or wishes a different caregiver to cultivate cannabis on the patient’s
behalf:
(A) The patient shall notify the current caregiver in writing and shall certify to the department
that notice has been given;
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(B) The caregiver shall have 15 days to return the registry identification card and dispose of
the cannabis plants and any cannabis and cannabis products that were produced from the
allowable plants; and
5. A caregiver shall provide written notice to the patient or the person legally responsible for
making medical decisions for the patient and shall notify the department on a form supplied
by the department if the caregiver no longer wishes to act as the patient’s caregiver. The
caregiver shall return the registry identification card associated with the patient immediately
upon submitting such notice and, if applicable, shall dispose of cannabis plants and any
cannabis and cannabis products that were produced from the allowable plants.
6. Upon giving notice of a patient’s death pursuant to SDCL 34-20G-46(2), a caregiver shall,
within 15 days, return the registry identification card associated with the patient and, if
applicable, shall dispose of cannabis plants and any cannabis and cannabis products that were
produced from the allowable plants.
Source: __
General Authority: SDCL 34-20G-72(4)
Law Implemented: SDCL 34-20G-46 and 34-20G-48
44:90:02:08. Nonresident registration – Required documentation.
1. The department shall accept any of the following as sufficient documentation of a
nonresident’s debilitating medical condition:
(A) Practitioner certification issued in the person’s jurisdiction of residence and listing a
debilitating medical condition consistent with SDCL 34-20G-1;
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(B) Practitioner certification issued in the person’s jurisdiction of residence, along with
additional medical records indicating a debilitating medical condition recognized by the
department pursuant to SDCL 34-20G-1; or
(C) Practitioner certification on a form supplied by the department.
2. The department shall accept, as a nonresident’s authorization to use medical cannabis,
registry identification cards or their equivalent from any state, district, territory,
commonwealth, insular possession of the United States, or country recognized by the United
States that enacts legislation allowing patients to purchase, at minimum, cannabis or cannabis
products containing 5,000 mg of THC per month, except jurisdictions that limit the medical
use of cannabis to hemp, as defined in SDCL 38-35-1, and its derivatives.
Source: __
General Authority: SDCL 34-20G-72(8)
Law Implemented: SDCL 34-20G-1(19)
44:90:02:09. Nonresident registration – Identification number.
1. The department shall issue to a nonresident cardholder who has met all registration
requirements a nonrenewable 10-digit identification number, which shall expire on the
earliest of:
(A) Six months from the date of issuance of the identification number;
(B) The expiration date of the nonresident’s proof of authorization issued by the jurisdiction
where the nonresident cardholder resides; or
(C) Any earlier expiration date specified by the practitioner’s statement.
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2. The registration number shall be valid at no more than two dispensaries, which shall be
designated by the nonresident cardholder at the time of registration.
Source: __
General Authority: SDCL 34-20G-72(8)
Law Implemented: SDCL 34-20G-1(19)
44:90:02:10. Allowable quantity of cannabis products.
1. Under SDCL 34-20G-1(1)(b), cardholders and nonresident cardholders may possess a
quantity of cannabis products with an equivalent cannabis weight totaling 3 ounces minus the
amount of cannabis flower and trim possessed pursuant to SDCL 34-20G-1(1)(a).
2. The equivalent cannabis weight of cannabis products shall be:
Type of cannabis Amount equivalent to one
ounce of cannabis
Concentrated cannabis 8,000 mg
Vaporizer pens or cartridges 8,000 mg
Edibles (including tinctures, oils, or beverages
tested by a certified testing facility)
80 servings providing 10 mg
of THC
Tinctures, oils, or beverages (untested) 30 milliliters/1 fluid ounce
Topical (ointment or cream) 12 fluid ounces
Transdermal patches (tested) 80 doses of 10 mg THC
Transdermal patches (untested) 12 patches
Source: __
General Authority: SDCL 34-20G-72(9)
Law Implemented: SDCL 34-20G-1(1)(b), 34-20G-2, and 34-20G-3
44:90:02:11. Fees for registry identification cards.
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1. The base fee for initial application and yearly renewal of a patient registry identification card
for a resident of South Dakota shall be:
(A) $20 for a low-income qualifying patient; and
(B) $100 for all other applicants.
2. Qualifying patients shall submit an additional $20 fee for the issuance of any caregiver
registry identification card, except no fee shall be charged for the designation of a caregiver
at the time of the initial or renewal application.
3. An additional $20 fee is required for the printing of a two-part registry identification card for
patients electing to cultivate cannabis or designate a caregiver to cultivate cannabis.
4. Nonresidents shall submit a $100 fee with a registration application.
5. All fees imposed under this section shall be nonrefundable.
Source: __
General Authority: SDCL 34-20G-72(10)
Law Implemented: SDCL 34-20G-29, 34-20G-31, 34-20G-3
CHAPTER 44:90:03
REGISTRATION CERTIFICATES
Section
44:90:03:01 Application for registration certificate – Components of complete
application.
44:90:03:02 Operating procedures – Required contents – All medical cannabis
establishments.
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June 23, 2021
44:90:03:03 Cannabis cultivation facility operating procedures – Additional
requirements.
44:90:03:04 Cannabis testing facility operating procedures – Additional requirements.
44:90:03:05 Cannabis product manufacturing facility operating procedures –
Additional requirements.
44:90:03:06 Cannabis dispensary operating procedures – Additional requirements.
44:90:03:07 Compliance with local zoning requirements – Form of certification.
44:90:03:08 Local registration, license, or permit – Department verification.
44:90:03:09 No registration certificate revocation – Department verification.
44:90:03:10 No disqualifying felonies – Form of certification.
44:90:03:11 Department review of competitive application – Scoring criteria.
44:90:03:12 Department notification of applicants – Tiebreaking procedures.
44:90:03:13 Fees for registration certificate – Application and renewal – Change in
location or ownership.
44:90:03:01. Application for registration certificate – Components of complete application.
1. An initial application for a registration certificate for any type of medical cannabis
establishment shall include:
(A) A completed application form;
(B) Operating procedures consistent with this article;
(C) Proof of property owner’s consent to cultivation or manufacturing;
(D) Certification of compliance from the local municipality or county ensuring applicant’s
proposed plans and location meet all local zoning and ordinance requirements;
(E) Copies of all required registrations, licenses, or permits;
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(F) Photocopies of a valid form of identification issued in South Dakota, or its equivalent
issued in another U.S. jurisdiction, for all principal officers and board members;
(G) Photocopies of organizing documents, operating agreements, management agreements,
bylaws, or other legal documents relating to the applicant’s business structure;
(H) Certification that background checks have been completed for all medical cannabis
establishment agents; and
(I) The applicable fee.
2. A renewal application for a registration certificate:
(A) Is required every 12 months or whenever 50 percent or more of the ownership interest in
the establishment has been transferred since the most recent renewal application; and
(B) Shall include all components of an initial application, except that a detailed description of
any changes to operating procedures, or a certification that no such changes exist, may be
substituted for a complete set of operating procedures.
3. An application for the transfer of a registration certificate to a different physical location
shall include:
(A) A completed change of location form;
(B) Diagrams of all locations in which cannabis will be cultivated, harvested, dried, stored,
manufactured, or destroyed;
(C) A detailed description of any changes to operating procedures, or a certification that no
such changes exist;
(D) Certification of compliance with all local zoning requirements;
(E) Copies of all required registration, licenses, or permits reflecting the establishment’s new
address; and
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(F) The applicable fee.
4. An application to transfer less than 50 percent of the ownership interest in a medical cannabis
establishment shall include:
(A) A completed transfer of ownership interest form;
(B) Photocopies of a valid form of identification issued in South Dakota, or its equivalent
issued in another U.S. jurisdiction, for any new principal officers and board members;
(C) Certification that background checks have been completed for any new medical cannabis
establishment agents; and
(D) The applicable fee.
Source: _
General Authority: SDCL 34-20G-72(2)
Law Implemented: SDCL 34-20G-55(1)
44:90:03:02. Operating procedures – Required contents – All medical cannabis
establishments.
The operating procedures of any medical cannabis establishment shall include:
1. A management plan identifying the individuals who will be in charge of day-to-day
operations of the establishment, including compliance with this article and SDCL chapter 34-
20G and their specific management roles;
2. A site plan, which shall:
(A) Identify any areas in which cannabis will be cultivated, harvested, dried, stored,
manufactured, tested, or destroyed;
(B) Indicate the types of activities that will take place in those areas;
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(C) Identify a means of legal ingress onto property from the closest maintained public right of
way; and
(D) Provide sufficient detail for the Department to determine that the establishment is
completely self-contained and does not have any access to any other cannabis
establishment or other business, except by public right of way.
3. Operating days and hours;
4. A workplace safety plan consistent with 29 CFR Part 1910 (2020), covering personal
protective equipment, hazard assessment, safe equipment operation, proper application of
agricultural chemicals, ladder use, hazard communication and other state and federal
workplace safety requirements;
5. Plans for compliance with all applicable safety standards contained in local ordinance, SDCL
chapter 11-10, ARSD article 61:15, and ARSD chapter 20:44:22;
6. A security plan indicating all doors, windows, gates, exterior lights, alarm sensors, cameras,
and how alarms and cameras will be monitored;
7. Any additional steps to ensure the safety of patrons and the community;
8. Plans for preventing the diversion of cannabis to non-cardholders;
9. A waste management plan for disposal of cannabis waste and, if applicable, wastewater that
conforms to federal, state, or local rules, regulations, and laws;
10. Pre-employment screening procedures, including criminal background check; and
11. Processes for limiting access by unauthorized persons, including verification of identity for
all vendors and contractors, issuance of a visitor badge, and closely monitoring all visitors.
Source: _
General Authority: SDCL 34-20G-72(2) and 34-20G-72(3)
Law Implemented: SDCL 34-20G-55(1)(c)
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44:90:03:03. Cannabis cultivation facility operating procedures – Additional requirements.
The operating procedures for a cultivation facility shall provide the Department with sufficient
detail to determine the establishment’s compliance with this article and SDCL chapter 34-20G,
including:
1. Plans to obtain an adequate supply of cannabis seeds or seedlings;
2. The number of mature cannabis plants, or size of plant canopy, to be cultivated;
3. The number of seedlings to be cultivated;
4. Plans for wastewater and waste disposal for the cultivation facility and the applicant’s
certification of compliance with all state and federal laws;
5. The lights, irrigation, greenhouses and other equipment to be used and the approval listing;
6. Plans for providing electricity, water and other utilities necessary for the normal operation of
the cultivation facility;
7. Plans for ventilation and filtration systems that reduce the potential for mold; and
8. A list of all pesticides, fungicides, insecticides, and fertilizers that will be present or used.
Source: _
General Authority: SDCL 34-20G-72(2)
Law Implemented: SDCL 34-20G-55(1)(c)
44:90:03:04. Cannabis testing facility operating procedures – Additional requirements.
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The written operating procedures for a testing facility shall provide the Department with
sufficient detail to determine the establishment’s compliance with this article and SDCL chapter
34-20G, including without limitation:
1. A policy that, as indicated by signature, ensures management and personnel are free from any
undue internal and external commercial, financial, or other influences that may adversely
affect the quality of their work or diminish confidence in its competence, impartiality,
judgement, or operational integrity;
2. A signed disclosure by the owner(s) stating that there is no financial conflict with, interest in,
investment in, landlord-tenant relationship with or loan to a cannabis cultivation facility,
cannabis product manufacturing facility, or cannabis dispensary;
3. A quality control and quality assurance manual;
4. A list of analytical tests, specifying the analyte and technology for each, the applicant intends
to offer and:
(A) Prior to July 1, 2024, proof that the applicant is working with an accreditation body to
ensure compliance with applicable rules and ensure progress towards achieving ISO/IEC
17025 accreditation including all proposed analytical tests within its scope of
accreditation; or
(B) On or after July 1, 2024, proof of ISO/IEC 17025 accreditation for each analytical test
proposed;
5. Standard operating procedures for all preanalytical, analytical, and post-analytical processes
performed by the laboratory;
6. Protocols for performing validation studies of all analytical tests to be performed;
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7. Protocols for biannual proficiency testing and documenting successful completion of above
80 percent;
8. A program to assess and document, at least annually, the competency of all technical and
scientific staff that perform preanalytical, analytical, and postanalytical processes;
9. Policies and procedures that ensure the protection of its clients’ confidential information and
proprietary rights, including procedures for protecting the electronic storage and transmission
of results;
10. Policies and procedures for collection and receipt of samples for mandatory or other testing;
11. Chain of custody protocols and a sample chain of custody form; and
12. Equipment to be used and its listing by a nationally recognized testing laboratory.
Source: _
General Authority: SDCL 34-20G-72(2)
Law Implemented: SDCL 34-20G-55(1)(c)
Reference: International Organization for Standardization & International Electrotechnical
Commission. (2018). ISO/IEC 17025:2017: General Requirements for the Competence of
Testing and Calibration Laboratories. https://www.iso.org/standard/66912.html
44:90:03:05. Cannabis product manufacturing facility operating procedures – Additional
requirements.
The operating procedures for a cannabis product manufacturing facility shall provide the
department with sufficient detail to determine the establishment’s compliance with this article
and SDCL chapter 34-20G, including:
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1. A description of the classes of products, such as extracts, inhaled products, edible products,
beverages, topical products, ointments, oils, and tinctures, that will be manufactured by the
establishment;
2. A detailed description of the manufacturing processes that will occur on the premises,
including:
(A) Mechanical extraction using potable water, ice, dry screening or sieving, cryonic
extraction, pressure, or temperature;
(B) Infusion into propylene glycol, glycerin, or food-grade fats;
(C) Extraction using food-grade ethanol; and
(D) Extraction using an inherently hazardous substance;
3. A diagram illustrating in which areas of the premises each manufacturing activity will occur;
4. A diagram illustrating the areas of the premises where any solvent, excluding water,
chemical or potentially hazardous substance will be stored;
5. Plans for ventilation and filtration systems that reduce the risk of fire or respiratory harm
within the facility;
6. Certification from a professional engineer licensed in this state of the safety of the equipment
used for cannabis extraction and the location of the equipment and the professional engineer's
approval of the standard operating procedures for the cannabis extraction;
7. Documentation from a professional engineer licensed in this State or a state or local official
authorized to certify compliance that the equipment used for cannabis extraction and the
location of the equipment comply with all applicable safety standards contained in local
ordinance, SDCL chapter 11-10, ARSD article 61:15, and ARSD chapter 20:44:22; and
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8. Documentation from the manufacturer of the cannabis extraction system or a professional
engineer licensed in this State showing that a professional grade, closed-loop extraction
system that recovers the solvents used to produce cannabis extract is used by the
establishment.
Source: _
General Authority: SDCL 34-20G-72(2)
Law Implemented: SDCL 34-20G-55(1)(c)
44:90:03:06. Cannabis dispensary operating procedures – Additional requirements.
The operating procedures for a dispensary shall provide the department with sufficient detail to
determine the establishment’s compliance with this article and SDCL chapter 34-20G, including:
1. Plans to obtain an adequate supply of cannabis, cannabis extracts, and cannabis products;
2. Types of products offered;
3. Verification of identification card and purchase limits;
4. Advertising plan, including onsite signs;
5. Training plan;
6. Point-of-sale software to be used, including documentation of its interoperability with the
inventory tracking system;
7. Parking;
8. Accessibility to individuals with disabilities; and
9. Suitability of location for maximizing access by cardholders.
Source: _
General Authority: SDCL 34-20G-72(2) and 34-20G-72(3)
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June 23, 2021
Law Implemented: SDCL 34-20G-55(1)(c)
44:90:03:07. Compliance with local zoning requirements – Form of certification.
Each initial or renewal application shall include the application’s certification, on a form
supplied by the department, of compliance with all applicable city and county zoning
requirements, including any city or county odor ordinances or regulations.
Source: _
General Authority: SDCL 34-20G-72(2)
Law Implemented: SDCL 34-20G-55(1)(d)
44:90:03:08. Local registration, license, or permit – Department verification.
1. Each initial or renewal application shall include either:
(A) A certification, on a form supplied by the department, that the applicant is not required to
obtain any city or county registration, license, or permit; or
(B) Copies of all required registrations, licenses, or permits.
2. The department may contact the city or county to verify the absence of registration, licensing,
or permitting requirements or to verify the form and content of such documents.
Source: _
General Authority: SDCL 34-20G-72(2)
Law Implemented: SDCL 34-20G-55(1)(e) and 34-20G-60
44:90:03:09. No registration certificate revocation – Department verification.
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June 23, 2021
Each initial or renewal application shall include a certification, on a form supplied by the
department, that none of the principal officers or board members has served as a principal officer
or board member for a medical cannabis establishment that has had its registration certificate
revoked.
Source: _
General Authority: SDCL 34-20G-72(2)
Law Implemented: SDCL 34-20G-55(2)
44:90:03:10. No disqualifying felonies – Form of certification.
With each initial or renewal application:
1. Each principal officer or board member shall aver that the individual has not been convicted
of any violent felony offense in the previous 10 years, whether in South Dakota or another
jurisdiction.
2. The signatory to the application shall aver that the applicant has conducted background
checks on all principal officers and board members within 90 days of the initial application
or within two years of a renewal application.
Source: _
General Authority: SDCL 34-20G-72(2)
Law Implemented: SDCL 34-20G-61 and 34-20G-62
44:90:03:11. Department review of competitive applications – Scoring criteria.
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June 23, 2021
In cases where more applicants apply than are allowed by the local government, the department
shall numerically score competitive applications according to the following criteria:
1. The city or county limiting the number of establishments, in response the department’s
inquiry, has endorsed the application as beneficial to the community (1 point).
2. The city or county limiting the number of establishments has not informed the department the
location specified in the application is unsuitable, due to zoning regulations or inaccessibility
to the public, for the proposed use (1 point).
3. All principal officers and board members have certified that they have not, in the previous 10
years, in any U.S. jurisdiction:
(A) Been convicted of a criminal offense involving fraud or false statements to a unit of
government (1 point); or
(B) Served as a principal officer or board member of any business that has had a license or
permit suspended or revoked for violations of laws or regulations relating to cannabis,
alcohol, tobacco, or gaming (1 point).
4. The applicant has submitted a floorplan with sufficient detail to enable the department to
determine where all activities listed in the operating procedures will take place (1 point).
5. The applicant has submitted a business plan outlining the details contained in SDCL 34-20G-
72(3)(d) (1 point).
Source: _
General Authority: SDCL 34-20G-72(3)
Law Implemented: SDCL 34-20G-56
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44:90:03:12. Department notification of applicants – Tiebreaking procedures.
1. The dispensary applicant with the highest score shall be awarded a registration certificate.
2. If the city or county has enacted an overall limit on the number of establishments, the
department shall award registration certificates, in order of final score, until the limit is
reached.
3. If the city or county has enacted a limit on establishments by establishment type, the
department shall award registration certificates, in order of final score, until the limit is
reached for each establishment type.
4. If applicants are tied for one or more openings in a locality, the affected applicants shall have
the opportunity to view, in person or via videoconference, a random drawing to determine the
successful applicants.
5. The notification of unsuccessful applicants shall identify the department’s decision as a final
department action subject to judicial review.
Source: _
General Authority: SDCL 34-20G-72(3)
Law Implemented: SDCL 34-20G-56 and 34-20G-59
44:90:03:13. Fees for registration certificates – Application and renewal – Change in
location or ownership.
1. Applicants shall submit a $5,000 fee with an initial or renewal application for a registration
certificate.
2. Establishments shall submit a $250 fee with an application to
(A) Operate at a different physical location.
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June 23, 2021
(B) Transfer an ownership interest to any person not listed on the establishment’s most recent
initial or renewal application.
3. Establishments shall submit a $50 fee with each request for an agent identification badge.
4. The fees imposed under this section shall increase annually based on the index factor.
5. The fees imposed under this section shall be nonrefundable.
Source: __
General Authority: SDCL 34-20G-72(10)
Law Implemented: SDCL 34-20G-55
CHAPTER 44:90:04
ESTABLISHMENTS
Section
44:90:04:01 Change in management – Duty to report.
44:90:04:02 Corrective and preventive action – Written procedures.
44:90:04:03 Duty to report criminal activity to department.
44:90:04:04 Duty to report criminal activity to law enforcement.
44:90:04:05 Lighting.
44:90:04:06 Doors and windows.
44:90:04:07 Placement of security cameras.
44:90:04:08 Recording by security cameras – Access by department.
44:90:04:09 Storage of camera footage.
44:90:04:10 Alarm system.
44:90:04:11 Notification to department.
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44:90:04:12 Agent identification badges to be obtained by establishments.
44:90:04:13 Agent identification badges to be displayed.
44:90:04:14 Controlled access – Verification of identity.
44:90:04:15 Visitor badges to be worn by contractors performing work at a medical
cannabis establishment.
44:90:04:16 Operation of agricultural, industrial, or other heavy equipment – Training
requirements.
44:90:04:17 Record-keeping -- Use of inventory tracking system– Training
requirements.
44:90:04:18 Security protocols– Training requirements.
44:90:04:19 Vehicle requirements – Establishments.
44:90:04:20 Transport manifests – Form and content.
44:90:04:21 Storage during transport.
44:90:04:22 Conduct during transport.
44:90:04:23 Transport incident notification.
44:90:04:24 Health and safety standards for storage.
44:90:04:25 Storage while awaiting test results.
44:90:04:01. Change in management – Duty to report.
An establishment shall remain under the direction of the individuals identified in its management
plan and shall provide the department an updated management plan within seven days after any
change in management personnel occurs.
Source: __
General Authority: SDCL 34-20G-72(5)(a)
Law Implemented: SDCL 34-20G-63
44:90:04:02. Corrective and preventive action – Written procedures.
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An establishment shall maintain and follow written procedures for implementing corrective
action and preventive action, including:
1. Analysis of processes, work operations, reports, records, service records, complaints,
returned product, and other sources of data to identify existing and potential root causes of
nonconformance or other quality problems;
2. Identifying any actions needed to correct and prevent recurrence of nonconformance and
other quality problems;
3. Verifying the corrective action or preventive action to ensure that such action is effective and
does not adversely affect finished products or processes;
4. Implementing and recording changes in methods and procedures needed to correct and
prevent identified quality problems;
5. Ensuring the information related to quality problems or nonconformance is disseminated to
those directly responsible for assuring the quality of products or the prevention of such
problems;
6. Submitting relevant information on identified quality problems and corrective action and
preventive action documentation, and confirming the result of the evaluation, for
management review; and
7. Ensuring that cannabis or cannabis products that do not meet safety standards are quickly
identified and destroyed or remediated to prevent harm to patients.
Source: __
General Authority: SDCL 34-20G-72(5)(a)
Law Implemented: SDCL 34-20G-63, 34-20G-71
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44:90:04:03. Duty to report criminal activity to department.
In addition to notice required by SDCL 34-20G-50, an establishment shall provide notice to the
department within one business day upon its discovery of any plan or other action of any person
to:
1. Steal cannabis plants, cannabis, cannabis products, cannabis paraphernalia, equipment, or
money;
2. Sell or otherwise provide cannabis plants, cannabis, cannabis products, or cannabis
paraphernalia to unauthorized persons;
3. Purchase or otherwise obtain cannabis plants, cannabis, cannabis products, or cannabis
paraphernalia by unauthorized persons;
4. Falsify inventory records or transport manifests; or
5. Commit any other crime relating to the operation of the establishment.
Source: __
General Authority: SDCL 34-20G-72(5)(a)
Law Implemented: SDCL 34-20G-50, 34-20G-63, and 34-20G-64
44:90:04:04. Duty to report criminal activity to law enforcement.
Any criminal activity reported to the department shall also be reported to a local law
enforcement agency.
Source: __
General Authority: SDCL 34-20G-72(5)(a)
Law Implemented: SDCL 34-20G-63 and 34-20G-88
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June 23, 2021
44:90:04:05. Lighting.
(1) Any gate or perimeter entry point of a medical cannabis establishment must have lighting
sufficient for observers to see, and cameras to record, any activity within ten feet of the gate or
entry.
(2) A motion detection lighting system may be employed to light required areas in low-light
conditions.
Source: __
General Authority: SDCL 34-20G-72(5)(c)
Law Implemented: SDCL 34-20G-64
44:90:04:06. Doors and windows.
Commercial grade locks, intended for facilities requiring high levels of physical security, are
required on all perimeter entry doors. All windows must be in good condition and lockable.
Source: __
General Authority: SDCL 34-20G-72(5)(c)
Law Implemented: SDCL 34-20G-64
44:90:04:07. Placement of security cameras.
All establishments must permanently fix security cameras:
1. At each exterior door and gate to allow identification of persons entering or exiting the
premises.
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2. At each door separating non-public areas of a dispensary from areas in which sales to
patients and caregivers are made, to allow identification of persons entering or exiting
non-public areas.
3. In sufficient number to allow the viewing, in its entirety, of any area where cannabis,
cannabis plants, cannabis products, or cannabis waste are cultivated, manufactured,
stored, destroyed, disposed, or prepared for transfer, sale, or testing.
Source: __
General Authority: SDCL 34-20G-72(5)(c)
Law Implemented: SDCL 34-20G-64
44:90:04:08. Recording by security cameras – Access by department.
1. Video surveillance shall meet the following minimum requirements:
(A) Minimum resolution of 720 pixels;
(B) Internet protocol (IP) compatibility supporting live viewing by the department over a
secure internet connection;
(C) Minimum of 15 frames per second; and
(D) Clear and accurate display of time and date.
2. The cameras shall be set to record 24 hours a day at all establishments, except cameras
placed at exterior doors used by patients to enter or exit the dispensary, which to ensure
patient privacy shall be set to record only outside of the dispensary’s operating hours.
3. Surveillance systems shall have a backup power source allowing for recording and
transmitting video for a minimum of two hours in the event of a power failure.
Source: __
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General Authority: SDCL 34-20G-72(5)(c)
Law Implemented: SDCL 34-20G-64
44:90:04:09. Storage of camera footage.
1. An establishment must maintain surveillance recordings for a minimum of 180 days, either:
(A) On a surveillance system storage device secured on the premises in a lockbox, cabinet, or
closet and alarmed with motion and seismic sensors to protect from employee tampering
or criminal theft; or
(B) Stored on a secure third-party server.
2. All video recordings are subject to inspection by any department employee or law
enforcement officer and must be copied and provided to the department or law enforcement
officer upon request.
3. Licensees must maintain a list of all persons with access to video surveillance recording and
written procedures for controlling access to recordings.
Source: __
General Authority: SDCL 34-20G-72(5)(c)
Law Implemented: SDCL 34-20G-64
44:90:04:10. Alarm system.
1. Monitored sensors are required on all exterior doors, windows, and gates.
2. Alarm systems must be monitored by a security company capable of contacting the
establishment and, if necessary, law enforcement.
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June 23, 2021
3. The system must include an audible alarm, which must be capable of being disabled remotely
by the security company.
4. Surveillance systems shall alert the security company in the event of a power failure and
shall operate for a minimum of four hours on backup power.
Source: __
General Authority: SDCL 34-20G-72(__)
Law Implemented: SDCL 34-20G-__
44:90:04:11. Notification to department.
An establishment must notify local law enforcement and the department within 24 hours upon
learning of any unauthorized entry or theft of cannabis, cannabis plants, or cannabis products.
Source: __
General Authority: SDCL 34-20G-72(5)(c)
Law Implemented: SDCL 34-20G-50
44:90:04:12. Agent identification badges to be obtained by establishments.
1. A medical cannabis establishment must obtain an agent identification badge for any agent
before that person is permitted to perform duties on the site of the establishment or transport
cannabis, cannabis extracts, or cannabis products.
2. The application for an agent identification badge shall be made on a form supplied by the
department, which shall include an attestation that the establishment has obtained a criminal
background check on the applicant in the previous two years, and which shall be
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accompanied by a photograph meeting the requirements for a United States passport and the
required fee.
3. The identification badge shall remain the property of the department.
4. An establishment must inform the department immediately if the individual ceases to be an
agent of the establishment. The badge shall become void and shall be returned to the
department.
Source: __
General Authority: SDCL 34-20G-72(5)(g)
Law Implemented: SDCL 34-20G-72(5)(g)
44:90:04:13. Agent identification badges to be displayed.
A medical cannabis establishment must provide a department-issued agent identification badge
to each agent, who must display this badge whenever on the premises of the establishment or
transporting cannabis, cannabis extract, or cannabis products.
Source: __
General Authority: SDCL 34-20G-72(5)(g)
Law Implemented: SDCL 34-20G-72(5)(g)
44:90:04:14. Controlled access – Verification of identity.
1. No medical cannabis establishment shall share premises with or permit access directly from
another medical cannabis establishment, business that sells alcohol or tobacco, or, if allowed
by law, other cannabis establishment.
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2. A medical cannabis establishment must verify the age and identity of anyone entering the
premises.
3. Unless permitted by ARSD 44:90:08:01, no person shall be allowed to enter the premises
other than agents of the establishment, cardholders, contractors 21 years of age or older hired
by the establishment, employees or agents of the department, law enforcement officers,
employees or agents of other local or state agencies with regulatory authority, including fire
marshals, electrical inspectors, pesticide control staff and environmental inspectors, for the
purpose of exercising such regulatory authority.
Source: __
General Authority: SDCL 34-20G-72(5)(g)
Law Implemented: SDCL 34-20G-65
44:90:04:15. Visitor badges to be worn by contractors performing work at a medical
cannabis establishment.
A medical cannabis establishment must issue a visitor badge to any temporary contractor of the
establishment whose scope of work will not involve the handling of cannabis, cannabis plants,
cannabis extracts, or cannabis products, including a carpenter, electrician, plumber, engineer, or
alarm technician. Such contractors shall work under the direct supervision of a medical cannabis
establishment agent whenever working in an area in which cannabis plants, cannabis, cannabis
extracts, or cannabis products are present.
Source: __
General Authority: SDCL 34-20G-72(5)(g)
Law Implemented: SDCL 34-20G-65
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44:90:04:16. Operation of agricultural, industrial, or other heavy equipment – Training
requirements.
1. Establishment agents shall receive thorough training in the safe operation of any heavy
agricultural equipment, industrial equipment such as extraction and packaging equipment,
and other heavy equipment such as forklifts, before operating such equipment.
2. Establishment agents shall complete OSHA-approved certification courses prior to using any
equipment if required under local ordinance or state law.
Source: __
General Authority: SDCL 34-20G-72(5)(g)
Law Implemented: SDCL 34-20G-72(5)(g)
44:90:04:17. Record-keeping – Use of inventory tracking system – Training requirements.
1. Prior to performing duties onsite or transporting cannabis, an establishment agent shall
receive at minimum two hours of training in record keeping, which shall be documented in
the establishment’s records.
2. Any establishment agent who will enter data into the inventory tracking system required by
the department shall additionally receive at minimum two hours of hands-on training; and
3. At least one establishment agent shall receive at minimum four hours of training to act as an
administrator of the inventory tracking system.
Source: __
General Authority: SDCL 34-20G-72(g)
Law Implemented: SDCL 34-20G-__
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44:90:04:18. Security protocols– Training requirements.
Each establishment agent shall receive training in all aspects of the establishment’s security
protocol, focusing on the agent’s role in deterring and preventing theft and preventing
unauthorized access to the premises.
Source: __
General Authority: SDCL 34-20G-72(5)(g)
Law Implemented: SDCL 34-20G-64
44:90:04:19. Vehicle requirements – Establishments.
Establishments must provide the following information to the department for each vehicle that
will be used to transport cannabis, cannabis concentrate, or cannabis products, including samples
for testing:
1. Make, model, and license plate number;
2. Proof of a valid insurance policy;
3. A description, with photos as necessary, of a locking compartment to be used to secure
cannabis, cannabis extracts, and cannabis products;
4. Verification that the vehicle has a functioning alarm system; and
5. A description of how the cannabis, cannabis extracts, or cannabis products will be
maintained in an appropriate temperature range.
Source: __
General Authority: SDCL 34-20G-72(5)(f)
Law Implemented: SDCL 34-20G-8, 34-20G-9, 34-20G-10, and 34-20G-11
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44:90:04:20. Transport manifests – Form and content.
1. A transport manifest is required for all authorized transfers of any amount of cannabis,
cannabis extracts, or cannabis products, except retail sales at a dispensary.
2. The transport manifest shall contain:
(A) The name, address, phone number, and license number of the establishment transporting
the cannabis, cannabis extracts, or cannabis products;
(B) The name, address, phone number, and license number of the establishment receiving the
items;
(C) The phone number and web address of the department’s secure verification system;
(D) Description and quantities, either by weight or unit, of all items, including samples,
contained in each transport;
(E) Date of transport and approximate time of departure and arrival;
(F) Vehicle make, model and license plate number;
(G) The name and signature of driver and any other agent accompanying the transport; and
(H) The name and signature of the person accepting the transport, upon delivery.
3. A separate transport manifest must be prepared for each medical cannabis establishment that
will receive cannabis, cannabis extracts, or cannabis products.
4. The vehicle must carry three copies of each transport manifest:
(A) One for the recipient;
(B) One to be returned to the originating establishment for the purposes of record keeping;
and
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(C) One to be provided at the request of law enforcement or an agent of the department, if the
vehicle is involved in a traffic stop or collision.
5. Any cannabis, cannabis products, or cannabis extracts, including samples, that are refused by
the intended recipient shall be noted on the transport manifest and noted in the establishments
inventory records after the items are returned.
6. A transport manifest shall not otherwise be altered after departing from the originating
premises.
7. The transport manifest does not take the place of a chain-of-custody form that may be
required of the establishment.
Source: __
General Authority: SDCL 34-20G-72(5)(f)
Law Implemented: SDCL 34-20G-8, 34-20G-9, 34-20G-10, and 34-20G-11
44:90:04:21. Storage during transport.
1. All cannabis or cannabis products being transported must be contained within an enclosed,
locked area in the transport vehicle and out of public view.
2. Samples of cannabis, cannabis extracts, and cannabis products for testing shall be transported
in appropriately labeled sample collection containers with tamper evident seals affixed.
3. All cannabis, cannabis extracts, or cannabis products being transported to another
establishment, other than samples for testing, shall be transported within sealed containers
identifying the recipient.
4. A cannabis product manufacturing facility or dispensary transporting any edible product
requiring refrigeration to another establishment must provide refrigerated transport.
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Source: __
General Authority: SDCL 34-20G-72(5)(f)
Law Implemented: SDCL 34-20G-8, 34-20G-9, 34-20G-10, and 34-20G-11
44:90:04:22. Conduct during transport.
1. Only agents of the establishment, wearing agent identification badges, and who are listed on
each transport manifest, may be in the vehicle.
2. Any vehicle transporting cannabis, cannabis extract, or cannabis products must travel directly
to the destinations listed on transport manifests, making stops only:
(A) For meals, when the transport lasts more than three hours round trip;
(B) For rest periods required by law;
(C) To refuel; or
(D) Under exigent circumstances, including collisions, traffic stops, mechanical breakdowns,
weather emergencies, or medical emergencies.
3. The agents may not remove the cannabis, cannabis extracts, or cannabis products from the
vehicle until arrival at the destination listed on the transport manifest, except under exigent
circumstances in consultation with the department.
4. An establishment agent must make a vehicle used for the transport of cannabis, cannabis
extract, or cannabis products immediately available for inspection upon request of the
department.
5. Upon law enforcement stop or other contact all persons in the vehicle shall identify
themselves with their agent identification badges and all transport manifests.
Source: __
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General Authority: SDCL 34-20G-72(5)(f)
Law Implemented: SDCL 34-20G-8, 34-20G-9, 34-20G-10, and 34-20G-11
44:90:04:23. Transport incident notification.
1. Any traffic stop, breakdown, or collision involving a vehicle being used by an establishment
to transport cannabis, cannabis extract, or cannabis products, or any unscheduled stop lasting
more than two hours shall be reported to the department within one business day.
2. Any theft or break-in involving a vehicle being used by an establishment to transport
cannabis, cannabis extract, or cannabis products shall be reported to local law enforcement
immediately and to the department within one business day.
3. If exigent circumstances require removal of cannabis from the vehicle prior to arrival at the
destination listed on the transport manifest, the establishment agents shall make a good faith
effort to contact the department for direction. If unable to contact the department, the
establishment agents shall make good faith efforts to protect the shipment from diversion.
Source: __
General Authority: SDCL 34-20G-72(5)(f)
Law Implemented: SDCL 34-20G-8, 34-20G-9, 34-20G-10, and 34-20G-11
44:90:04:24. Health and safety standards for storage.
A medical cannabis establishment shall store cannabis, and cannabis products, unless on display
for sale:
1. In secure, sealed containers that prevent against damage from light, water, insects, or rodents;
and
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2. Under environmental conditions, including refrigeration of any perishable edible product,
that will protect against physical, chemical, or microbial contamination and damage from
temperature or humidity.
Source: __
General Authority: SDCL 34-20G-72(5)(f)
Law Implemented: SDCL 34-20G-8, 34-20G-9, 34-20G-10, and 34-20G-11
44:90:04:25. Storage while awaiting test results.
A cultivation facility or cannabis product manufacturing facility awaiting testing results must:
1. Enter the identification number of the batch and the identification number of the samples
associated with the batch into the establishment’s inventory records;
2. Store the batch in one or more sealed containers enclosed on all sides; and
3. Affix to the container(s) a label including the following information:
(A) The establishment’s identification number;
(B) The batch number entered into inventory records;
(C) Name and identification number of the testing facility that will perform the tests;
(D) The sample’s unique identification number
(E) The date the samples were taken; and
(F) In bold, capital letters, no smaller than 12-point font, “PRODUCT NOT TESTED”
Source: __
General Authority: SDCL 34-20G-72(5)(f)
Law Implemented: SDCL 34-20G-8, 34-20G-9, 34-20G-10, and 34-20G-11
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CHAPTER 44:90:05
CANNABIS CULTIVATION FACILITIES
Section
44:90:05:01 Cultivation activities – Compliance with operating procedures.
44:90:05:02 Packaging and labeling cannabis for retail sale.
44:90:05:03 Cultivation equipment - Safety.
44:90:05:04 Cultivation area.
44:90:05:05 Hours of operation – Exigent circumstances.
44:90:05:06 Fences and greenhouses.
44:90:05:07 Safe application of pesticides and other chemicals used in cultivation–
Training requirements.
44:90:05:08 Application of pesticides.
44:90:05:09 List of approved active ingredients in pesticides.
44:90:05:10 Safety of cannabis -- Use or presence of prohibited pesticides –
Contaminants.
44:90:05:01. Cultivation activities – Compliance with operating procedures.
A cultivation facility must have onsite, whenever establishment agents are present, a principal
officer or other manager with responsibility for ensuring that all activities comply with the
establishment’s operating procedures, including:
1. Propagating and cultivating cannabis plants;
2. Trimming, drying, curing, and storing cannabis;
3. Packaging cannabis, including testing samples;
4. Transporting cannabis to another establishment, including testing samples; and
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5. Maintaining all required records.
Source: __
General Authority: SDCL 34-20G-72(5)(e)
Law Implemented: SDCL 34-20G-9
44:90:05:02. Packaging and labeling cannabis for retail sale.
A cultivation facility may package and label for retail sale in packages of three ounces or less:
1. Cannabis flower and trim; and
2. Pre-rolled cannabis cigarettes, containing only cannabis flower or trim and an unflavored
paper wrapper.
Source: __
General Authority: SDCL 34-20G-72(5)(e)
Law Implemented: SDCL 34-20G-9
44:90:05:03. Cultivation equipment - Safety.
All electrical equipment, including but not limited to growing lights, cultivation equipment and
packaging equipment, must be listed by a nationally recognized testing laboratory.
Source: __
General Authority: SDCL 34-20G-72(5)(e)
Law Implemented: SDCL 34-20G-9
44:90:05:04. Cultivation area.
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Any cultivation of seedlings, immature plants, or mature plants must take place in:
1. An indoor facility meeting all security requirements of this article;
2. One or more greenhouses meeting all security requirements of an indoor facility; or
3. Within a secured fenced in area meeting all security requirements, either outdoors or in
greenhouses not meeting security requirements.
Source: __
General Authority: SDCL 34-20G-72(5)(e)
Law Implemented: SDCL 34-20G-9
44:90:05:05. Hours of operation – Exigent circumstances.
Agents of a cultivation facility may not, outside of the hours of operation stated on the operating
plan of record, plant, feed, water, treat, move, harvest, dry, cure, package, destroy, or dispose
cannabis, except:
1. Under exigent circumstances in which prompt action is necessary to protect inventory from
destruction; and
2. With notice to the department within one business day regarding the character of the
emergent circumstances, the activities to be conducted and the hours during which such
activities will occur.
Source: __
General Authority: SDCL 34-20G-72(5)(e)
Law Implemented: SDCL 34-20G-9
44:90:05:06. Fences and greenhouses.
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1. Any cultivation facility cultivating, processing, or storing cannabis outdoors or in
greenhouses or other structures that do not meet all security requirements for buildings must
secure such cultivation areas with fencing and lighting.
2. Fencing and all gates must be secure, at least six feet high and obscure, or have a cover that
obscures, regulated activities from being readily viewed from outside of the fenced in area.
Source: __
General Authority: SDCL 34-20G-72(5)(c)
Law Implemented: SDCL 34-20G-64
44:90:05:07. Safe application of pesticides and other chemicals used in cultivation–
Training requirements.
1. Any establishment agent who applies a department-approved fungicide, insecticide, or
rodenticide shall hold a current pesticide applicator certification issued by the South Dakota
Department of Agriculture and Natural Resources pursuant to ARSD chapter 12:56:05.
2. Any establishment agent who applies or uses other agricultural chemicals shall have training
in their safe use, including mitigating any risks to humans, animals, or waterways.
Source: __
General Authority: SDCL 34-20G-72(5)(d)
Law Implemented: SDCL 34-20G-72(5)(d)
44:90:05:08. Application of pesticides.
1. The use of a pesticide in the cultivation of cannabis is prohibited unless it:
(A) Is listed in the cultivation facility’s operating procedures filed with the department; and
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(B) Contains only those active ingredients approved by the department pursuant to ARSD
section 44:90:05:11 of this article.
2. An approved pesticide shall be applied only by an establishment agent with a current
pesticide applicator license and only in a manner consistent with the label.
Source: __
General Authority: SDCL 34-20G-72(5)(d)
Law Implemented: SDCL 34-20G-9 and 34-20G-11
44:90:05:09. List of approved active ingredients in pesticides.
1. The following synthetic chemical agents are approved as active ingredients in pesticides
when used in a manner consistent with the label:
(A) Auxin;
(B) Azadirachtin;
(C) Capric acid;
(D) Caprylic acid;
(E) Citric acid;
(F) Copper octoanoate;
(G) Cytokinins;
(H) Diatomaceous earth;
(I) Gibberellic acid;
(J) Horticultural oils;
(K) Hydrogen peroxide;
(L) Indole-3-butyric acid;
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June 23, 2021
(M) Insecticidal soaps;
(N) Iron phosphate;
(O) Methoprene;
(P) Peroxyacetic acid;
(Q) Petroleum oils;
(R) Phosphorous acid, including salts thereof;
(S) Potassium bicarbonate;
(T) Potassium silicate;
(U) Potassium sorbate;
(V) Sodium bicarbonate;
(W) Sodium ferric EDTA;
(X) Sodium laurel sulfate; and
(Y) Sulfur.
2. The following bacterial or fungal agents are approved as active ingredients in pesticides
when used in a manner consistent with the label:
(A) Bacillus amyloliquefaciens strain D747;
(B) Bacillus subtilis QST;
(C) Bacillus thuringiensis;
(D) Beauveria bassianaa;
(E) Burkholderia spp. Strain A396;
(F) Gliocladium virens;
(G) Harpin alpha beta;
(H) Isaria fumosorosea;
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June 23, 2021
(I) Myrothecium verrucaria;
(J) Reynoutria sachalinensis;
(K) Trichoderma asperellum strain T34; and
(L) Trichoderma harzianum.
3. The following plant extracts are approved as active ingredients in pesticides when used in a
manner consistent with the product label:
(A) Capsaicin;
(B) Castor oil;
(C) Cinnamon oil;
(D) Clove oil;
(E) Corn oil;
(F) Cottonseed oil;
(G) Garlic oil;
(H) Geraniol;
(I) Geranium oil;
(J) Lemongrass oil;
(K) Linseed oil;
(L) Neem oil;
(M) Olive oil;
(N) Peppermint oil;
(O) Pyrethrins;
(P) Rosemary oil;
(Q) Sesame oil;
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June 23, 2021
(R) Soybean oil; and
(S) Thyme oil.
Source: __
General Authority: SDCL 34-20G-72(5)(d)
Law Implemented: SDCL 34-20G-9
44:90:05:10. Safety of cannabis -- Use or presence of prohibited pesticides – Contaminants.
1. The use or presence at a medical cannabis establishment of any pesticide listing an active
ingredient not on the approved list shall be considered a violation of this article and SDCL
chapter 34-20G.
2. The knowing use or presence at a medical cannabis establishment of any pesticide listing as
an active ingredient a synthetic chemical agent not on the approved list shall be considered a
serious violation of this article and SDCL chapter 34-20G.
3. The knowing use or presence at a medical cannabis establishment of any pesticide listing a
nonsynthetic substance prohibited in organic crop production under 7 CFR section 205.602
(2021) shall be considered a serious violation of this article and SDCL chapter 34-20G.
4. Cannabis shall be considered non usable if it contains detectable levels of any of the
following contaminants:
(A) Residual pesticides unless approved by the department;
(B) Residual solvents other than ethanol, glycerin, propylene glycol, or cooking fats;
(C) Mold, yeast, or mycotoxins;
(D) Coliform bacteria, enterobacteriaceae, e. coli, or salmonella; or
(E) Cadmium, lead, arsenic, or mercury.
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Source: __
General Authority: SDCL 34-20G-72(5)(d) and 34-20G-72(5)(e)
Law Implemented: SDCL 34-20G-9
CHAPTER 44:90:06
CANNABIS TESTING FACILITIES
Section
44:90:06:01 Required Accreditation and Registration – ISO/IEC 17025 – Drug
Enforcement Agency.
44:90:06:02 Adherence to standard operating procedures – Quality control and quality
assurance -- Sample collection.
44:90:06:03 Chain of custody protocols.
44:90:06:04 Mandatory testing for pesticides.
44:90:06:05 Testing of samples by State Public Health Laboratory or another
laboratory.
44:90:06:01. Required Accreditation and Registration – ISO/IEC 17025 – Drug
Enforcement Agency.
1. Prior to July 1, 2024, all cannabis testing facilities must work with an accreditation body to
ensure compliance with applicable rules and ensure progress towards achieving ISO/IEC
17025 accreditation, with a scope of accreditation that includes all analytical tests performed
by the facility.
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2. On or after July 1, 2024, a cannabis testing facility may not accept cannabis or cannabis
products for testing unless the facility is ISO/IEC accredited and the analytical tests to be
performed are within the facility’s scope of accreditation.
3. A cannabis testing facility shall be registered with the Drug Enforcement Agency pursuant to
21 CFR part 1301 (2019).
Source: __
General Authority: SDCL 34-20G-72(5)(k)
Law Implemented: SDCL 34-20G-11
Reference: International Organization for Standardization & International Electrotechnical
Commission. (2018). ISO/IEC 17025:2017: General Requirements for the Competence of
Testing and Calibration Laboratories. https://www.iso.org/standard/66912.html
44:90:06:02. Adherence to standard operating procedures – Quality control and quality
assurance -- Sample collection.
1. A cannabis testing facility shall adhere to its operating procedures, including:
(A) The written procedures for all preanalytical, analytical, and post-analytical processes
(B) Its quality control and quality assurance manual;
(C) Completion of validation studies of all analytical tests to be performed;
(D) Proficiency testing at an interval defined by the accrediting body;
(E) Achieves a passing score on each proficiency test, or in the event of a non-passing score,
completes remediation as defined by the accrediting body; and
(F) A program to assess and document, at least annually, the competency of all technical and
scientific staff that perform preanalytical, analytical, and postanalytical processes.
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2. Each cannabis testing facility shall adopt standard operating procedures for the collection of
samples for testing, which shall address:
(A) Minimum and maximum batch size for cannabis and cannabis products;
(B) Standards for the assignment of batch identifiers and sample identifiers;
(C) Minimum quantity of cannabis and cannabis products needed for each analytical test;
(D) Methodology for collecting material that is representative of the entire batch being tested;
(E) Cleaning, sanitizing, and other methods for preventing sample contamination;
(F) Containers to be used for sample collection, including methods for sealing; and
(G) Prevention of damage or degradation during storage and transport.
Source: __
General Authority: SDCL 34-20G-72(5)(k)
Law Implemented: SDCL 34-20G-11
44:90:06:03. Chain of custody protocols.
1. The chain of custody protocols developed by a cannabis testing facility shall be approved by
the department and must address:
(A) Recording the possession of samples from the time of sampling through destruction;
(B) Retaining for not less than 90 days any residual samples in the container in which the
sample was submitted;
(C) Handling procedures during collection, transport, and testing to avoid loss, damage,
diversion, contamination, or misidentification of samples; and
(D) The use of a chain of custody form that documents the collection, transport, receipt,
testing, and destruction of samples.
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2. The chain of custody form shall include the sample location, the number and types of
containers, the mode of collection, the authorized individual who collected the sample, the
date and time of collection, and requested analyses.
Source: __
General Authority: SDCL 34-20G-72(5)(k)
Law Implemented: SDCL 34-20G-11
44:90:06:04. Reporting of test results.
1. The results of any analytical test of cannabis or cannabis products shall be provided to the
cannabis cultivation facility or cannabis cultivation facility in the form of a certificate of
analysis.
2. The cannabis testing facility shall update the inventory tracking system to reflect whether the
analytical test has revealed the presence of any analyte that renders the cannabis or cannabis
products non usable.
Source: __
General Authority: SDCL 34-20G-72(5)(d), 34-20G-72(5)(e), 34-20G-72(5)(h), and 34-20G-
72(5)(k)
Law Implemented: SDCL 34-20G-9, SDCL 34-20G-10, and SDCL 34-20G-11
44:90:06:05. Analytical testing result verification.
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1. Prior to July 1, 2024, all medical Cannabis or Cannabis products tested by state-certified
laboratories shall be subject to routine confirmation testing by the department or department
designee.
(A) Upon request, the laboratory shall submit residual material from samples with complete
testing results to the department or department designee.
(B) The department or department designee will perform testing using an acceptable method
to verify initial results.
(C) Results of confirmation testing will be made available to the originating laboratory, and
(1) If initial testing results are found to be conforming, no additional action will be taken;
(2) If discordant results are encountered, the sample will be subjected to a third and final
round of testing; and
(3) If a third round of testing reveals discordant results, the cannabis testing facility shall
stop all testing of cannabis and cannabis products pending completion of a corrective
action plan approved by the department.
2. On or after July 1, 2024, the department shall not require routine confirmation testing for
analytical tests within the scope of certification for an ISO/IEC 17025 certified cannabis
testing facility, provided the cannabis testing facility:
(A) Participates in a proficiency testing program as defined by the ISO17025 accrediting
body;
(B) Performs proficiency testing at an interval defined by the accrediting body; and
(C) Achieves a passing score on each proficiency test, or in the event of a non-passing score,
completes remediation as defined by the accrediting body.
Source: __
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June 23, 2021
General Authority: SDCL 34-20G-72(5)(k)
Law Implemented: SDCL 34-20G-11 and 34-20G-69
CHAPTER 44:90:07
CANNABIS PRODUCT MANUFACTURING FACILITIES
Section
44:90:07:01 Manufacturing practices.
44:90:07:02 Prohibited manufacturing activities.
44:90:07:03 Extraction – Approved operating procedures.
44:90:07:04 Generally safe extraction methods.
44:90:07:05 Potentially hazardous extraction methods.
44:90:07:06 Extraction using inherently hazardous substances.
44:90:07:07 Edible cannabis products.
44:90:07:01. Manufacturing practices.
1. A cannabis product manufacturing facility must follow standard operating procedures to
ensure workplace, environmental, and product safety, including:
(A) Ensuring that all equipment and surfaces that come into contact with cannabis or other
ingredients are food grade and nonreactive;
(B) Maintaining all counters and surface areas in a manner that reduces the potential for
development of microbials, molds, mildew, fungi and other contaminants;
(C) Providing adequate refrigeration for ingredients and products during manufacture,
storage, or transport;
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(D) Ensuring that all electrical equipment is listed by a nationally recognized testing
laboratory or inspected annually by a professional engineer licensed in South Dakota; and
(E) Storing all chemicals in a safe manner.
2. As applicable, all agents of a cannabis product manufacturing facility must:
(A) Work in an environment with proper ventilation, controlling all sources of ignition where
a flammable atmosphere is or may be present;
(B) Use proper eye protection, respiratory protection and gloves;
(C) Use only water that is potable and ice that is made from potable water; and
(D) Undergo safety training on fire prevention and safe operation of equipment used for
manufacturing.
3. Any cannabis product shall be considered non usable if it contains detectable levels of any of
the following contaminants:
(A) Residual pesticides, unless approved by the department;
(B) Residual solvents other than ethanol, glycerin, propylene glycol, or cooking fats;
(C) Mold, yeast, or mycotoxins;
(D) Coliform bacteria, enterobacteriaceae, e. coli, or salmonella; or
(E) Cadmium, lead, arsenic, or mercury.
Source: __
General Authority: SDCL 34-20G-72(5)(d), 34-20G-72(5)(e) and 34-20G-72(5)(h)
Law Implemented: SDCL 34-20G-10
44:90:07:02. Prohibited manufacturing activities.
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A cannabis product manufacturing facility may not:
1. Manufacture a product in the distinct shape of human, animal, creature, vehicle, fruit, cartoon
character, toy, emoji, or other artwork likely or intended to appeal to anyone under 21 years
of age;
2. Manufacture a cannabis product by adding or infusing cannabis into a commercially
available non-cannabis end product;
3. Manufacture any edible cannabis product that has more than 10 milligrams of THC per
serving;
4. Package in a marketing layer an edible cannabis product with more than 100 milligrams of
total THC;
5. Manufacture a product using cannabis, concentrate, or extract that has not passed any test
declared mandatory by the department;
6. Manufacture cannabis products intended for non-human consumption;
7. Manufacture products that do not contain cannabis on the same premises as cannabis
products; or
8. Extract cannabis using pressurized canned flammable fuel, including butane or propane in
containers intended for camp stoves, handheld torch devices, refillable cigarette lighters, or
similar consumer products.
Source: __
General Authority: SDCL 34-20G-72(5)(g)
Law Implemented: SDCL 34-20G-10
44:90:07:03. Extraction – Approved operating procedures.
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1. A cannabis product manufacturing facility must conform with the standard operating
procedures for extraction methods described in its operating procedures and shall not extract
cannabis using any other methods without prior written approval by the department.
2. A cannabis product manufacturing facility performing extraction may be subject to
inspection by the state fire marshal, local fire department, building inspector or code
enforcement officer to confirm that no health or safety concerns are present, and that the
facility complies with all applicable safety standards contained in local ordinance, SDCL
chapter 11-10, ARSD article 61:15, and ARSD chapter 20:44:22.
Source: __
General Authority: SDCL 34-20G-72(5)(g)
Law Implemented: SDCL 34-20G-10
44:90:07:04. Generally safe extraction methods.
The following methods of extraction are permissible if listed in the establishment’s operating
procedures on file with the department:
1. Mechanical extraction using:
(A) Potable water and ice made from potable water;
(B) Dry screening or sieving;
(C) Cryogenic or subzero processing not involving a solvent; and
(D) Pressure and temperature.
2. Infusion of cannabis in food grade fats or synthetic food additives:
(A) Propylene glycol;
(B) Glycerin; and
(C) Butter, olive oil, or other typical cooking fats.
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Source: __
General Authority: SDCL 34-20G-72(5)(g)
Law Implemented: SDCL 34-20G-10
44:90:07:05. Potentially hazardous extraction methods.
The department will permit extraction using the following substances, if 99 percent or greater in
purity and if the department deems storage, preparation, electrical, gas monitoring, fire
suppression, and exhaust systems methods to be adequate:
1. Carbon dioxide;
2. Another liquid chemical, compressed gas, or commercial product that has a flashpoint above
100 degrees Fahrenheit; or
3. Ethanol, including solutions of ethanol and water;
Source: __
General Authority: SDCL 34-20G-72(5)(g)
Law Implemented: SDCL 34-20G-10
44:90:07:06. Extraction using inherently hazardous substances.
1. Extraction using an inherently hazardous substance requires prior physical inspection and
written approval by a professional engineer licensed in South Dakota that the establishment’s
storage, preparation, electrical, gas monitoring, fire suppression, and exhaust systems are
adequate.
2. Any extraction method using inherently hazardous substances must be listed in the operating
procedures on file with the department and use an agent of 99 percent or greater purity.
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3. The resulting extract shall not exceed residual limits for the solvent established by the
department as part of testing requirements.
4. The following solvents may be used in approved inherently hazardous extraction:
(A) Butane;
(B) Propane;
(C) Acetone;
(D) Heptane; or
(E) Pentane.
5. Any other inherently hazardous substance shall be approved only upon written application to
the Department explaining the safety and efficacy of the selected method.
6. All flammable gas must be odorized in compliance with state and federal regulations.
Source: __
General Authority: SDCL 34-20G-72(5)(g)
Law Implemented: SDCL 34-20G-10
44:90:07:07. Edible cannabis products.
A cannabis product manufacturing facility that has declared edible cannabis products as part of
their operating plan of record must:
1. Obtain a South Dakota food service establishment license, pursuant to SDCL chapter 34-18,
covering ongoing activities at the location identified in the operating plan;
2. Employ a Certified Food Service Manager meeting department specifications;
3. Comply with all applicable standards of ARSD 44:02:07, and the city or county in which the
establishment is located.
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Source: __
General Authority: SDCL 34-20G-72(5)(g)
Law Implemented: SDCL 34-20G-10
CHAPTER 44:90:08
CANNABIS DISPENSARIES
Section
44:90:08:01 Preventing unauthorized access – Age verification.
44:90:08:02 Preventing unauthorized sales – Training requirements.
44:90:08:01. Preventing unauthorized access – Age verification.
1. No dispensary shall allow entry into areas containing cannabis without first identifying an
individual as a cardholder or other person authorized pursuant to ARSD 44:90:04:14.
2. No dispensary shall allow entry to a patient who is under 21 years of age.
3. Acceptable methods of controlling access include:
(A) Verification at an external cashier window or ticket window, followed by unlocking an
exterior door to admit the individual into the building;
(B) Verification at a cashier window or ticket window located in an entryway with a locked
interior door that prevents access to any area containing cannabis, followed by unlocking
the interior door; and
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(C) Verification by an agent outside a locked exterior or interior door, followed by unlocking
the door.
4. Verification shall not take place in any area in which a person may access cannabis without
passing through a lockable door.
5. Any website or mobile application developed or hosted by an establishment shall:
(A) Include verification that the visitor is 21 years of age or older;
(B) Require the cardholder’s or nonresident cardholder’s registry identification number for
verification of any online purchases; and
(C) Limit online sales to cardholders and nonresident cardholders who previously have made
a purchase of cannabis or cannabis products at the dispensary.
Source: __
General Authority: SDCL 34-20G-72(5)(c)
Law Implemented: SDCL 34-20G-64
44:90:08:02. Preventing unauthorized sales – Training requirements.
Before interacting with any cardholder, all employees of a dispensary shall be trained to:
1. Determine the authenticity of registry identification cards, including temporary registry
identification cards and nonresident registration credentials;
2. Ensure that the person presenting a temporary or department-issued registry identification
card or nonresident registration credential is the authorized cardholder;
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3. Use the verification system, including all options for accessing the system by phone, point-
of-sale software, or mobile application;
4. Track the amount of cannabis dispensed for a patient’s use, including consolidating the
amounts in sales to the patient and the patient’s caregiver; and
5. Verify that the dispensary has been designated to make sales to the patient or the patient’s
designated caregiver.
Source: __
General Authority: SDCL 34-20G-72(5)(g)
Law Implemented: SDCL 34-20G-70 and 34-20G-71
CHAPTER 44:90:09
SAMPLING AND TESTING
44:90:09:01 Mandatory testing prior to transfer.
44:90:09:02 Creation of batches – Collection of samples.
44:90:09:03 Packaging of samples for testing.
44:90:09:01. Mandatory testing prior to transfer.
1. No cannabis or cannabis products shall be transferred by a cannabis cultivation facility or
cannabis product manufacturing facility to a cannabis product manufacturing facility or
cannabis dispensary unless:
(A) A cannabis testing facility has tested the cannabis or cannabis product and determined it
to be in compliance with this article; and
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(B) The cannabis or cannabis product is accompanied by a certificate of analysis issued by
the cannabis testing facility.
2. Except samples for testing, any cannabis or cannabis products transferred from a cannabis
cultivation facility or a cannabis product manufacturing facility without a certificate of
analysis shall be considered non usable.
3. A cannabis product manufacturing facility or cannabis dispensary shall maintain the
certificate of analysis for any cannabis or cannabis product for 180 days or until all of the
cannabis or cannabis product has been transferred or disposed of, whichever is later.
4. The licensee submitting the cannabis or cannabis product for testing shall pay all fees
associated with this testing.
Source: __
General Authority: SDCL 34-20G-72(5)(d) and 34-20G-72(5)(e)
Law Implemented: SDCL 34-20G-9, 34-20G-10, and 34-20G-11
44:90:09:02 Creation of batches -- Collection of samples.
1. A cannabis cultivation facility or cannabis product manufacturing facility must:
(A) Divide cannabis or cannabis products into batches as directed by a registered cannabis
testing facility; and
(B) Assign a unique batch identifier to the cannabis or cannabis product.
2. When cannabis is harvested or trimmed:
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(A) Cannabis flower shall be assigned to a batch containing a single strain from single harvest
date; and
(B) Cannabis trim may be assigned to a batch containing multiple strains and from multiple
trimming dates.
3. A cannabis cultivation facility or cannabis product manufacturing facility must submit for
laboratory testing at minimum one sample from of each batch of cannabis or cannabis
product or as directed by the cannabis testing facility based on batch size.
4. All collections of samples for testing to be performed by a cannabis testing facility shall be
performed by an agent of either the testing facility or the establishment submitting the
sample.
5. The collection of samples shall comply in all manner with the testing facility’s standard
operating procedures.
Source: __
General Authority: SDCL 34-20G-72(5)(k)
Law Implemented: SDCL 34-20G-11
44:90:10:03. Packaging of samples for testing.
All samples of cannabis, cannabis extracts, or cannabis products shall be transferred to a testing
facility in sealed, child-resistant, and tamper-evident containers that are supplied by a testing
facility or that meet criteria specified by a testing facility.
Source: __
General Authority: SDCL 34-20G-72(5)(k)
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Law Implemented: SDCL 34-20G-11
44:90:10:04. Receipt of results.
1. Upon receipt of a certificate of analysis indicating that cannabis or cannabis products comply
with SDCL chapter 34-20G and this article, the cannabis cultivation facility or cannabis
product manufacturing facility may transfer the cannabis or cannabis products to another
establishment, subject to this article.
2. Upon receipt of a certificate of analysis indicating that cannabis or cannabis products are non
usable, the cannabis or cannabis shall not be transferred and may be subject to destruction
according to this article.
CHAPTER 44:90:10
PACKAGING, LABELING, AND ADVERTISING
Section
44:90:10:01 Packaging for transfer or sale - General requirements.
44:90:10:02 Packaging for retail sale – General requirements.
44:90:10:03 Packaging of cannabis flower or trim or inhaled cannabis products for
retail sale.
44:90:10:04 Packaging of edible cannabis products for retail sale - Tinctures, oils, and
beverages excluded.
44:90:10:05 Packaging of cannabis tinctures and oils for retail sale.
44:90:10:06 Packaging of cannabis beverages for retail sale.
44:90:10:07 Packaging of topical cannabis products for retail sale.
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44:90:10:08 Labeling required.
44:90:10:09 Format of labeling – Font size – Multiple labels.
44:90:10:10 Labeling claims – Results of testing.
44:90:10:11 Expected effects – Time to take effect – Duration of effect.
44:90:10:12 Ingredients – Allergen warnings.
44:90:10:13 Contents – Net weight or volume -- Nutritional information.
44:90:10:14 Required warnings – Indication that edible product contains cannabis –
Side effects – Legal status of cannabis.
44:90:10:15 Identifying information – Establishment identification number – Batch --
Dates.
44:90:10:16 Labeling prohibitions.
44:90:10:17 Prohibited forms of advertising.
44:90:10:18 Target audience – Establishments and adult cardholders only – Prohibition
on advertising to practitioners.
44:90:10:19 Prohibited content – Advertisements.
44:90:10:20 Required information.
44:90:10:21 Nonconforming advertising.
44:90:10:01. Packaging for transfer or sale -- General requirements.
1. All cannabis or cannabis products must be packaged for transfer or sale in containers that:
(A) Are fully enclosable;
(B) Are resealable;
(C) Protect the packaged item from contamination; and
(D) Do not impart any toxic or deleterious substance to the packaged item.
2. A cultivation facility shall package all flower, trim, or pre-rolled cigarettes for retail sale
before transfer to a dispensary.
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3. A cannabis product manufacturing facility shall package all cannabis products for retail sale
before transfer to a dispensary.
Source: __
General Authority: SDCL 34-20G-72(5)(j)
Law Implemented: SDCL 34-20G-9 and 34-20G-10
44:90:10:02. Packaging for retail sale – General requirements.
1. A dispensary must transfer any cannabis, cannabis concentrate, or cannabis products to the
patient or caregiver in packaging that is:
(A) Child-resistant in compliance with compliant with 16 CFR part 1700 (2020);
(B) Tamper-evident, using a sealing method that provides clear, lasting evidence that the
packaged has previously been opened;
(C) Resealable, except for single-serving cannabis products; and
(D) Opaque.
2. Unless otherwise specified by this article, each packaging requirement may be met either by
the container provided by the cultivation facility or cannabis product manufacturing facility
or by exit packaging supplied by the dispensary at the time of sale.
Source: __
General Authority: SDCL 34-20G-72(5)(j)
Law Implemented: SDCL 34-20G-8, 34-20G-9, and 34-20G-10
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44:90:10:03. Packaging of cannabis flower or trim or inhaled cannabis products for retail
sale.
Cannabis flower or trim or an inhaled cannabis product shall be transferred by a dispensary only
in a container that is fully enclosed on all sides, as follows:
1. If the container is soft sided, it must be four mil or greater in thickness; or
2. If container has rigid sides, it must have a lid or enclosure that can be placed tightly and
securely on the container.
Source: __
General Authority: SDCL 34-20G-72(5)(j)
Law Implemented: SDCL 34-20G-9 and 34-20G-10
44:90:10:04. Packaging of edible cannabis products for retail sale -- Tinctures, oils, and
beverages excluded.
1. Single-serving edible cannabis products:
(A) Shall be placed into a child-resistant container that may or may not be resealable; and
(B) May be bundled into a larger marketing layer so long as the total amount of active THC
per marketing layer does not exceed 100 milligrams.
2. Multiple-serving edible cannabis products:
(A) Shall either be placed into either a resealable container or with individual servings heat-
sealed into packaging made of plastic four mil or greater in thickness with no easy-open
tab, dimple, corner or flap;
(B) Shall contain 100 milligrams or less of total THC per multiple-serving container; and
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(C) Shall clearly indicate the size of a serving if the edible product is not in a form that
indicates a serving.
Source: __
General Authority: SDCL 34-20G-72(5)(j)
Law Implemented: SDCL 34-20G-9 and 34-20G-10
44:90:10:05. Packaging of cannabis tinctures and oils for retail sale.
1. A cannabis tincture or oil shall be packaged in a glass or plastic vial, either:
(A) With a resealable child-resistant cap; or
(B) With a resealable cap and enclosed in a child-resistant soft-sided container made of
plastic four mil or greater in thickness and heat sealed.
2. The packaging shall include a measuring device such as a measuring cap or dropper. Hash
marks on the bottle or package do not qualify as a measuring device.
Source: __
General Authority: SDCL 34-20G-72(5)(j)
Law Implemented: SDCL 34-20G-9 and 34-20G-10
44:90:10:06. Packaging of cannabis beverages for retail sale.
1. Single-serving cannabis beverages that do not contain more than 10 milligrams of THC shall
be packaged in:
(A) A child-resistant container; or
(B) A metal can with a stay tab mechanism opening; or
(C) A glass bottle with a cork or metal crown style bottle cap.
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2. Multiple-serving cannabis beverages that contain more than 10 milligrams of THC but no
more than 100 milligrams of THC shall:
(A) Be packaged in a child-resistant container that has a resealing cap or closure; and
(B) Include a measuring device such as a measuring cap or dropper; hash marks on the bottle
or package do not qualify as a measuring device.
3. Cannabis beverages packaged according to this section may be bundled into a larger
marketing layer so long as the total amount of THC per marketing layer does not exceed 100
milligrams.
Source: __
General Authority: SDCL 34-20G-72(5)(j)
Law Implemented: SDCL 34-20G-9 and 34-20G-10
44:90:10:07. Packaging of topical cannabis products for retail sale.
1. Salves, creams, lotions and balms shall be packaged in a child-resistant container that has a
resealing cap or closure compliant with 16 CFR part 1700 (2020).
2. Transdermal patches shall be packaged in a plastic four mil or greater in thickness to prevent
unintended access to and ingestion by children or pets and be heat sealed with no easy-open
tab, dimple, corner or flap, as to make it difficult for a child to open.
Source: __
General Authority: SDCL 34-20G-72(5)(j)
Law Implemented: SDCL 34-20G-9 and 34-20G-10
44:90:10:08. Labeling required.
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1. All cannabis, cannabis extract, and cannabis products shall be labeled in accordance with this
chapter before sale or transfer to the patient or caregiver.
(A) Prior to transferring cannabis to a dispensary, a cultivation facility must label the
marketing layer of each container.
(B) Prior to transferring cannabis products to a dispensary, a cannabis product manufacturing
facility must label each the marketing layer of each container.
2. Unless otherwise specified, all required information may be printed directly on, or printed on
a sticker attached to the marketing layer of the cannabis, cannabis extract, or cannabis
product.
Source: __
General Authority: SDCL 34-20G-72(7)
Law Implemented: SDCL 34-20G-9 and 34-20G-10
44:90:10:09. Format of labeling – Font size – Multiple labels.
All required information shall be printed clearly in English in type no smaller than 6-point font
(1/12 inch). An establishment may affix an extendable, accordion-style, label, layered label, or
multiple labels to the marketing layer, provided none of the required information is obstructed
and the label can be easily identified by a patient or caregiver as containing important
information.
Source: __
General Authority: SDCL 34-20G-72(7)
Law Implemented: SDCL 34-20G-9 and 34-20G-10
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44:90:10:10. Labeling claims -- Results of testing.
1. The results of any testing mandated by the department shall be included on the label of any
cannabis or cannabis product.
2. No label shall contain claims regarding cannabinoid potency or the absence of microbials,
metals, solvents, or pesticides except to list the results of analytical tests performed by a
registered cannabis testing facility.
Source: __
General Authority: SDCL 34-20G-72(7)
Law Implemented: SDCL 34-20G-9 and 34-20G-10
44:90:10:11. Expected effects – Time to take effect – Duration of effect.
1. The label of any cannabis or cannabis product shall indicate:
(A) The length of time, in hours or minutes, that it may take the patient to feel effects; and
(B) The length of time the patient should expect the effects to last.
2. The estimated time to take effect and duration of effect shall be based on the best
estimate of the establishment printing the label.
3. All edible products, except ethanol-based tinctures, shall additionally contain the
following warning: “Effects of this product may not be felt for up to 4 hours.”
Source: __
General Authority: SDCL 34-20G-72(7)(a)
Law Implemented: SDCL 34-20G-9 and 34-20G-10
44:90:10:12. Ingredients – Allergen warnings.
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1. The label of any cannabis or cannabis product shall identify any pesticides used in
cultivation.
2. The label of any cannabis product shall list all ingredients and, if applicable, gases, solvents,
or other chemicals used in extraction.
3. The label of any edible cannabis product shall identify any major allergens contained in the
product in accordance with 21 USC section 343 (2021), including milk, eggs, fish, crustacean
shellfish, tree nuts, peanuts, wheat and soybeans.
Source: __
General Authority: SDCL 34-20G-72(7)(c)
Law Implemented: SDCL 34-20G-9 and 34-20G-10
44:90:10:13. Contents – Net weight or volume -- Nutritional information.
1. The label’s statement of net contents shall identify the net weight or volume of the cannabis,
cannabis extract, or cannabis product, expressed:
(A) If a solid, in both ounces and grams/milligrams; or
(B) If a liquid or colloid, in both fluid ounces and milliliters.
2. The label of any cannabis product shall state the equivalent cannabis weight, calculated
according to the equivalent cannabis weight table included in section 44:90:02:10 of this
article.
3. The label of any edible cannabis product shall identify the size, expressed in ounces and
grams/milligrams, fluid ounces or millimeters, or number of pieces, of a serving providing 10
mg of THC and the number of servings per marketing layer;
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4. The label of vaporizing cartridges, pens, and topical cannabis products shall be expressed in
the weight of concentrate used to manufacture the product within the marketing layer in
milligrams or grams and ounces.
5. Any edible cannabis product shall be labeled with a nutritional fact panel in accordance with
21 CFR part 101 (2018).
Source: __
General Authority: SDCL 34-20G-72(7)
Law Implemented: SDCL 34-20G-9 and 34-20G-10
44:90:10:14. Required warnings -- Indication that edible product contains cannabis – Side
effects – Legal status of cannabis.
1. The department shall design a standard symbol that indicates an item contains cannabis or
cannabis extract, which shall be used by all registered establishments.
2. This standard symbol shall appear on the front or most predominantly displayed area of the
marketing layer of an edible cannabis product, no smaller than 1/2 inch by 1/2 inch.
3. All cannabis and cannabis products shall carry the following warning statement in no smaller
than 6-point font: “For medical use by qualifying patients only. There may be health risks
associated with the use of this product. There may be additional health risks associated with
the use of this product for women who are pregnant, breastfeeding, or planning on becoming
pregnant. Do not drive a motor vehicle or operate heavy machinery while using this product.”
Source: __
General Authority: SDCL 34-20G-72(7)(d)
Law Implemented: SDCL 34-20G-9 and 34-20G-10
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44:90:10:15. Identifying information – Establishment identification number – Batch --
Dates.
The container or exit packaging for any cannabis or cannabis product sold by a dispensary shall
identify:
1. The registration number of any cultivation facility, cannabis product manufacturing facility,
or dispensary involved in the cultivation, processing, or sale of the item;
2. Batch numbers;
3. Cultivation date of cannabis flower or trim; and
4. Production date of cannabis products
Source: __
General Authority: SDCL 34-20G-72(7)(d)
Law Implemented: SDCL 34-20G-9 and 34-20G-10
44:90:10:16. Labeling prohibitions.
No label shall:
1. Include representations as to cannabinoid content or to the absence of pesticides, mold, or
other contaminants, other than to provide the results of analysis performed by a testing
laboratory certified in accordance with this article;
2. Make claims regarding health or physical benefits to the consumer;
3. Include any false or misleading statements;
4. Obscure identifying information or warning statements;
5. Use any trademark without authorization;
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6. Depict a human, animal, creature, vehicle, fruit, cartoon character, toy, emoji, or other
artwork likely or intended to appeal to anyone under 21 years of age;
7. Include the word “candy” or “candies”; or
8. Refer to any item typically marketed to persons under 21 years of age.
Source: __
General Authority: SDCL 34-20G-72(7)(d)
Law Implemented: SDCL 34-20G-9 and 34-20G-10
44:90:10:17. Prohibited forms of advertising.
No establishment shall advertise:
1. On a sign or billboard, except that a dispensary may advertise on signs on its own premises;
2. By distributing handbills in public areas or on publicly owned property;
3. Through direct mail, phone, text, or email without verifying the recipient is a cardholder or
medical cannabis establishment and offering a permanent opt-out feature;
4. On television or radio;
5. Through a practitioner or health care facility, including placement of advertising material
onsite or targeting their patients through direct mail, phone, text, or email.
Source: __
General Authority: SDCL 34-20G-72(5)(i)
Law Implemented: SDCL 34-20G-33 and 34-20G-78
44:90:10:18. Target audience – Establishments and adult cardholders only – Prohibition on
advertising to practitioners.
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1. Advertisements shall be targeted as directly as possible to:
(A) Other establishments;
(B) Cardholders who are 21 years of age or older; and
(C) Readers of medical publications.
2. Advertisements may not target:
(A) Non-cardholders, including:
(1) Suggesting a medical evaluation; or
(2) Interacting with the public at events sponsored by the establishment;
(B) Anyone under the age of 21, including:
(1) Depicting anyone under 21 years of age; or
(2) Using cartoons, toys, or other products or images commonly associated with or
marketed to individuals under 21 years of age; or
(C) Practitioners or health care facilities, other than advertising in medical publications.
3. Any advertising on websites, social media, or mobile applications shall include:
(A) A verification that the recipient is a cardholder 21 years of age or older; and
(B) A permanent opt-out feature.
Source: __
General Authority: SDCL 34-20G-72(5)(i)
Law Implemented: SDCL 34-20G-33, 34-20G-74 and 34-20G-78
44:90:10:19. Prohibited content – Advertisements.
No advertisement for a medical cannabis establishment shall:
1. Make deceptive, false or misleading statements;
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2. Make claims related to potency (beyond listing of cannabinoid content verified by a testing
facility);
3. Depict consumption of cannabis or cannabis products;
4. Depict pregnancy, breastfeeding, or operating a motorized vehicle, boat or machinery;
5. Depict or refer to candy or a specific type of candy;
6. Use a trademark associated with a non-cannabis product, including parody or other use that
has similarity to the original;
7. Encourage the transportation of cannabis across state lines or otherwise encourage illegal
activity;
8. Assert that cannabis is safe because it is regulated by the department, tested by a testing
facility, or otherwise endorsed by any government agency;
9. Make claims that cannabis has curative or therapeutic effects;
10. Claim any health or physical benefits; or
11. Encourage excessive or rapid consumption.
Source: __
General Authority: SDCL 34-20G-72(5)(i)
Law Implemented: SDCL 34-20G-7
44:90:10:20. Required information.
Any advertisement shall contain the following information:
1. A statement “For medical use by qualifying patients only”; and
2. The medical cannabis establishment identification number.
Source: __
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General Authority: SDCL 34-20G-72(5)(i)
Law Implemented: SDCL 34-20G-7
44:90:10:21. Nonconforming advertising.
1. Any nonconforming advertising shall be considered a violation of this article and SDCL
chapter 34-20G.
2. Upon notification by the department, the establishment shall cease the nonconforming
advertisements and remove any nonconforming advertising from websites, social media,
mobile applications, or signs.
3. Failure to cease or remove the advertising within 48 hours shall be considered a serious and
knowing violation of this article and SDCL chapter 34-20G.
Source: __
General Authority: SDCL 34-20G-72(5)(i)
Law Implemented: SDCL 34-20G-80
CHAPTER 44:90:11
RECORDKEEPING
Section
44:90:11:01 Inventory tracking system – Required use.
44:90:11:02 Retention of records – Electronic and paper – Amended records.
44:90:11:03 Daily inventory record.
44:90:11:04 Daily transfer record.
44:90:11:05 Daily testing sample record.
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44:90:11:06 Cultivation facility inventory records – Additional requirements.
44:90:11:07 Cannabis product manufacturing facility inventory records – Additional
requirements.
44:90:11:08 Testing facility inventory records – Additional requirements.
44:90:11:09 Dispensary inventory records – Additional requirements.
44:90:11:10 Daily transaction record.
44:90:11:11 Department access to and use of establishment records.
44:90:11:01. Inventory tracking system – Required use.
Establishments are required to use an electronic inventory tracking system prescribed by the
department to create all required inventory records, transfer records, testing sample records, and
transaction records.
Source: __
General Authority: SDCL 34-20G-72(5)(b)
Law Implemented: SDCL 34-20G-63
44:90:11:02. Retention of records -- Electronic and paper – Amended records.
1. A cannabis establishment must maintain, for a minimum of 18 months, records to enable the
department to identify and prevent diversion of cannabis and to protect patients from unsafe
cannabis and cannabis products, including:
(A) All point of sale records, whether in electronic or paper form;
(B) Transport manifests; and
(C) Daily inventory records, transfer records, testing sample records, and transaction records.
2. No inventory record, transfer record, testing sample record, or transaction record shall be
altered after the date on which it was created.
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3. If necessary, an amended inventory record, transfer record, testing sample record, or
transaction record may be created, but the original record shall be subject to record retention
requirements.
Source: __
General Authority: SDCL 34-20G-72(5)(b)
Law Implemented: SDCL 34-20G-63
44:90:11:03. Daily inventory record.
1. A cannabis establishment must maintain and update by midnight each day of operation, an
electronic record of the establishment’s inventory of cannabis, including seeds, seedlings,
plants, extracts, products, and waste.
2. The inventory record shall use the following units of measure:
(A) Seeds, seedlings, and plants shall be quantified in whole numbers;
(B) Quantities of cannabis flower, trim, extracts, or pre-rolled cannabis cigarettes shall be
expressed in grams and ounces;
(C) Quantities of edible cannabis products shall be expressed in whole numbers of servings,
each providing 10 mg of THC;
(D) Quantities of vaporizing cartridges, pens, and transdermal patches shall be expressed in
the number of marketing layers and the net weight of concentrate per marketing layer in
milligrams.
(E) Quantities of topical cannabis products other than transdermal patches shall be expressed
in the number of marketing layers and the net volume of the topical product in fluid
ounces.
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3. The inventory record shall reflect:
(A) The destruction of cannabis or disposal of cannabis waste;
(B) Theft or other loss; and
(C) Data from the transfer record.
4. The inventory record shall be maintained securely and shall not identify any cardholder other
than by the cardholder’s identification number.
Source: __
General Authority: SDCL 34-20G-72(5)(b)
Law Implemented: SDCL 34-20G-63
44:90:11:04. Daily transfer record.
1. A cannabis establishment must maintain and update by midnight, an electronic record of all
cannabis, including any seeds, plants, extracts, or products, obtained from a cardholder or
another establishment, and all cannabis transferred to another establishment.
2. The transfer record shall use the same units of measure as the inventory record.
3. The transfer record shall reflect all transport manifests.
4. The transfer record shall be maintained securely and shall not identify any cardholder except
by the cardholder’s identification number.
Source: __
General Authority: SDCL 34-20G-72(5)(b)
Law Implemented: SDCL 34-20G-63
44:90:11:05. Daily testing sample record.
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1. A cannabis establishment must maintain and update by midnight, an electronic testing
sample record, including:
(A) The batch identifier and quantity of each batch from which samples were drawn;
(B) The sample identifier of each sample created, its quantity, and the batch identifier
associated with the sample;
(C) The tests to be performed; and
(D) Test results, including a note of whether the testing facility has indicated the batch is safe
or unsafe for transfer to another establishment.
2. The quantity of each batch and each sample shall be expressed in the same units as the
inventory record.
Source: __
General Authority: SDCL 34-20G-72(5)(b)
Law Implemented: SDCL 34-20G-63
44:90:11:06. Cultivation facility inventory records – Additional requirements.
1. The inventory record of a cultivation facility shall include a unique identifier for each
seedling or plant greater than 12 inches in height, which shall also be printed on a tag or label
affixed to the growing container or a tag around the plant’s stalk.
2. The inventory record shall be updated each time:
(A) A seedling exceeds its size limit and is considered a plant;
(B) A plant flowers for the first time;
(C) A plant is trimmed or harvested;
(D) A testing batch is created; or
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(E) Cannabis is packaged for retail sale.
3. The record for a testing batch must indicate the unique identifier for each plant used to
produce the batch.
4. The record for cannabis packaged and labeled for transfer to a dispensary shall include the
number of marketing layers and the quantity of cannabis in each marketing layer, as
expressed according to the relevant labeling requirement.
Source: __
General Authority: SDCL 34-20G-72(5)(b)
Law Implemented: SDCL 34-20G-63 and 34-20G-88
44:90:11:07. Cannabis product manufacturing facility inventory records – Additional
requirements.
1. The inventory record of a cannabis product manufacturing facility shall include the batch
identification number of each testing batch of cannabis obtained from a cultivation facility.
2. The inventory record shall be updated each time:
(A) A quantity of extract or concentrated cannabis is made from cannabis flower or trim;
(B) A quantity of cannabis product is made from concentrated cannabis, cannabis extract,
flower, or trim; or
(C) A quantity of cannabis product is packaged for retail sale.
3. Any extract must be assigned to a testing batch, which shall:
(A) Consist only of extract produced on a single day using the same extraction method; and
(B) Be entered into the inventory record with the identifier of any testing batch of cannabis
from which it was produced.
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4. Any cannabis product must be assigned to a testing batch, which shall:
(A) Consist only of a single type of product produced on a single day; and
(B) Be entered into the inventory record with the identifier or any testing batch of cannabis or
cannabis extract from which it was produced.
5. The record for cannabis extracts or products packaged and labeled for transfer to a dispensary
shall include the testing batch identifier, the number of marketing layers, and the quantity of
cannabis in each marketing layer, as expressed according to the relevant labeling
requirement.
Source: __
General Authority: SDCL 34-20G-72(5)(b)
Law Implemented: SDCL 34-20G-63 and 34-20G-88
44:90:11:08. Testing facility inventory records – Additional requirements.
1. A testing facility shall maintain and update by midnight each day of operation, an inventory
record of:
(A) All samples in its possession, with unique identifiers and quantities expressed in units
specified in its operating procedures; and
(B) All other cannabis, cannabis extracts, and cannabis products acquired for training or
reference purposes;
2. The inventory record shall reflect:
(A) The quantity of each sample rendered unusable by testing;
(B) The quantity of each sample returned to the establishment;
(C) The quantity of each sample destroyed or disposed of; and
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(D) The quantity of any sample lost, stolen, or otherwise unaccounted for.
Source: __
General Authority: SDCL 34-20G-72(5)(b)
Law Implemented: SDCL 34-20G-63 and 34-20G-88
44:90:11:09. Dispensary inventory records – Additional requirements.
1. The inventory record of a dispensary shall include all cannabis, cannabis extracts, and
cannabis products, including the type of product, the testing batch identifier, the number of
marketing layers, and the quantity of cannabis in each marketing layer, as expressed
according to the relevant labeling requirement.
2. The inventory record shall be updated each day of operation to reflect:
(A) Any cannabis, cannabis extracts, or cannabis products received from another
establishment;
(B) Sales to qualifying cardholders, which shall include the cardholder’s identification
number;
(C) Returns of merchandise from cardholders, whether to be resold, returned to another
establishment, or destroyed;
(D) Transfers to another establishment, including returns; and
(E) Destruction of cannabis.
Source: __
General Authority: SDCL 34-20G-72(5)(b)
Law Implemented: SDCL 34-20G-63 and 34-20G-88
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44:90:11:10. Daily transaction record.
1. A dispensary shall maintain and shall update by midnight each day of operation, a transaction
record, which shall include:
(A) The type of product, the testing batch identifier, the number of marketing layers, and the
quantity of cannabis in each marketing layer, as expressed according to the relevant
labeling requirement, for each sale or return; and
(B) The cardholder identification number associated with each quantity.
2. The transaction record shall contain no other identifying information relating to a cardholder.
Source: __
General Authority: SDCL 34-20G-72(5)(b)
Law Implemented: SDCL 34-20G-63 and 34-20G-71
44:90:11:11. Department access to and use of establishment records.
1. The department’s agents:
(A) Shall have access to all records, including transport manifests during an inspection of an
establishment or vehicle, or in response to a written or telephone inquiry.
(B) May compare inventory onsite or in delivery vehicles to the establishment’s inventory
records.
(C) May compare transport manifests or observed deliveries to the establishment’s transfer
records.
2. Upon the discovery of any inconsistencies in the establishment’s record-keeping, the
department shall:
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(A) Make a determination of whether the inconsistences are knowing or negligent;
(B) Inform the establishment in writing of its findings;
(C) If applicable, initiate suspension or revocation proceedings; and
(D) If applicable, refer possible criminal violations to state and local law enforcement.
Source: __
General Authority: SDCL 34-20G-72(5)(b)
Law Implemented: SDCL 34-20G-63 and SDCL 34-20G-88
CHAPTER 44:90:12
ENFORCEMENT
Section
44:90:12:01 Department inspection of establishments – Corrective action plan.
44:90:12:02 Suspension or revocation of registration certificates for serious violations.
44:90:12:03 Suspension or revocation of a registration certificate for multiple
violations.
44:90:12:04 Voluntary surrender of registration certificate.
44:90:12:05 Revocation of registry identification card for unauthorized sale.
44:90:12:06 Revocation of registry identification card for serious or multiple
violations.
44:90:12:01. Department inspection of establishments – Corrective action plan.
1. Agents of the department may conduct routine, unannounced inspections and inspections in
response to complaints.
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2. Agents of the department:
(A) Must present identification before commencing an inspection of an establishment;
(B) Shall have complete and unrestricted access to establishments during business hours or
when establishment agents are present for the purposes of inspections, sample collection,
testing, interviews, or other investigations;
(C) May collect samples of cannabis and cannabis products and perform analytical tests on
those samples or submit them to a cannabis testing facility for testing;
(D) May inspect the contents of any vehicle used by an establishment to transport cannabis,
cannabis extracts, or cannabis products, examine the manifest; and
(E) Shall have access to inventory records and certificates of analysis maintained by the
establishment, including collecting paper or electronic copies for further review.
3. The department shall provide an establishment the results of any analytical tests performed
on samples taken from the establishment and shall inform the establishment whether the
cannabis or cannabis products from which the samples were taken are non usable;
4. Upon the discovery of suspected violations of this article or SDCL chapter 34-20G, agents of
the department may order the establishment to comply with a corrective action plan, which
may include:
(A) Modifying operating procedures to comply with this article and SDCL chapter 34-20G;
(B) Halting transfer of cannabis or cannabis products that are mislabeled or otherwise pose a
threat to public health; and
(C) Destroying or remediating cannabis or cannabis products that pose a threat to public
health.
Source: __
General Authority: SDCL 34-20G-72(6)
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Law Implemented: SDCL 34-20G-69
44:90:12:02. Suspension or revocation of registration certificates for serious violations.
1. The department may, pursuant to SDCL chapter 1-26 and SDCL 34-20G-81, suspend for up
to six months or revoke a registration certificate for any knowing violation of this article or
SDCL chapter 34-20G that involves dishonesty, diversion, or threat to public health or safety,
including knowingly:
(A) Selling or otherwise transferring cannabis in exchange for anything of value to a person
other than a cardholder, a nonresident cardholder, or to a medical cannabis establishment
or its agent;
(B) Making a false statement to a law enforcement official;
(C) Sharing confidential information about a cardholder for monetary gain or to cause harm
to the cardholder;
(D) Submitting false records or documentation required by the department to certify a
medical cannabis establishment;
(E) Failing to meet obligations or conditions agreed to in the application for a registration
certificate;
(F) Dispensing, transferring, or selling cannabis while a registration certificate is suspended;
(G) Obtaining cannabis seeds, cannabis seedlings, cannabis plants, cannabis, cannabis extract,
or cannabis products in violation of this article or SDCL chapter 34-20G;
(H) Failing to enter cannabis seedlings, cannabis plants, cannabis, cannabis extracts, or
cannabis products into the establishment’s inventory records;
(I) Applying pesticides to cannabis plants without following all requirements of this article;
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(J) Using solvents without authorization or in an unsafe manner;
(K) Misrepresenting the results of laboratory analysis
(L) Transferring non usable cannabis or cannabis products; or
(M) Committing any misdemeanor or felony offense in connection with the operation
of a medical cannabis establishment.
2. Upon the discovery of violations that pose an ongoing threat to public health, safety, or
welfare, the department may initiate emergency suspension proceedings pursuant to SDCL 1-
26-29.
Source: __
General Authority: SDCL 34-20G-72(6)
Law Implemented: SDCL 34-20G-80 and 34-20G-81
44:90:12:03. Suspension or revocation of a registration certificate for multiple violations.
1. The department may, pursuant to SDCL chapter 1-26 and SDCL 34-20G-81, suspend for up
to six months or revoke a registration certificate upon finding that the establishment has
committed multiple violations of this article or SDCL chapter 34-20G, including:
(A) Serious violations of this article or SDCL chapter 34-20G;
(B) Negligent violations of this article or SDCL chapter 34-20G;
(C) Deviation from operating procedures in a manner that poses a threat to public safety or
health, including the availability of cannabis, cannabis extract, or cannabis products to
qualifying patients, including low-income qualifying patients;
(D) Sharing a cardholder’s personal information;
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(E) Minor or technical violations of this article that did not result in diversion of cannabis or
harm to public health or safety;
(F) Violations of local ordinances governing the time, place, and manner of a medical
cannabis establishment that may operate in the locality;
(G) Failure to allow agents of the department or any law enforcement agency access to an
establishment during normal business hours; or
(H) Failure to provide a notice required by this article or SDCL chapter 34-20G.
(1) Upon the discovery of violations that pose an ongoing threat to public health, safety,
or welfare, the department may initiate emergency suspension proceedings pursuant
to SDCL 1-26-29.
Source: __
General Authority: SDCL 34-20G-72(6)
Law Implemented: SDCL 34-20G-80 and 34-20G-81
44:90:12:04. Voluntary surrender of registration certificate.
An establishment may offer to voluntarily surrender its registration certificate, cease operations,
and may not renew or transfer the registration certificate. In such cases, the department has the
discretion:
1. To reject voluntary surrender;
2. To accept the voluntary surrender without conditions; or
3. To negotiate conditions of a voluntary surrender, including the amount of time before which
the establishment or any principal officer or board member may apply for a registration
certificate.
102
June 23, 2021
Source: __
General Authority: SDCL 34-20G-72(6)
Law Implemented: SDCL 34-20G-80 and 34-20G-81
44:90:12:05. Revocation of registry identification card for unauthorized sale.
Upon a finding that a cardholder has sold cannabis to any person who is not authorized to
possess cannabis for medical purposes, the department shall initiate emergency suspension
proceedings pursuant to SDCL 1-26-29 and notify the cardholder in writing of the revocation of
the registry identification card, along with notice of the right to appeal.
Source: __
General Authority: SDCL 34-20G-72(6)
Law Implemented: SDCL 34-20G-83
44:90:12:06. Revocation of registry identification card for serious or multiple violations.
The department may, pursuant to SDCL chapter 1-26 and SDCL 34-20G-84 revoke a registry
identification card upon finding that the cardholder has committed serious or multiple violations
of SDCL chapter 34-20G, including:
1. Transferring cannabis to any person who is not authorized to possess cannabis for medical
purposes;
2. Submitting false information to the department;
3. Making false statements to a law enforcement officer;
4. Allowing unauthorized use of a registry identification card;
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June 23, 2021
5. Accepting remuneration other than direct costs incurred for assisting with the registered
qualifying patient's medical use of cannabis, pursuant to SDCL 34-20G-2(2); or
6. Cultivating cannabis in violation of SDCL chapter 34-20G.
Source: __
General Authority: SDCL 34-20G-72(6)
Law Implemented: SDCL 34-20G-84
CHAPTER 44:90:13
PETITIONS TO RECOGNIZE DEBILITATING MEDICAL CONDIITIONS
Section
44:90:13:01 Petitions – Required forms.
44:90:13:02 Department’s decision.
44:90:13:01. Petitions – Required forms.
A petition to the secretary to add a medical condition to the list of debilitating medical conditions
for which a practitioner may recommend the medical use of cannabis must be submitted on
forms provided by the department. The petition must include:
1. The name and address of the South Dakota resident filing the petition;
2. A clear description of the specific medical condition, defined as narrowly as possible,
including any International Classification of Diseases, Tenth Revision (ICD-10) code
applicable to the condition;
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June 23, 2021
3. The diagnostic criteria for determining whether cannabis is appropriate for a patient with the
medical condition; and
4. A detailed summary, with citations, of peer-reviewed research that treatment with cannabis
produces superior treatment outcomes or fewer side effects, compared to currently available
medications or other interventions;
5. Letters of support from two physicians currently licensed pursuant to SDCL chapter 36-4;
and
6. Complete copies of any research cited in the petition.
Source: _
General Authority: SDCL 34-20G-72(1)
Law Implemented: SDCL 1-26-13 and 34-20G-26
Reference: National Center for Health Statistics. (2021). International Classification of
Diseases, 10th Revision, Clinical Modification. https://icd10cmtool.cdc.gov/
44:90:13:02. Department’s decision.
The secretary’s written decision to approve or deny a petition shall be issued within 180 days of
submission and shall include the factors supporting the decision, including whether the written
petition, public testimony, written comments, peer-reviewed research, and consultation with
practitioners support the following conclusions:
1. The proposed medical condition is recognized by the medical profession as a serious and
chronic medical condition;
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June 23, 2021
2. Treatments currently available for the proposed condition are either ineffective or produce
harmful side effects; and
3. Medical use of cannabis will provide therapeutic or palliative benefits that outweigh the risks
of cannabis use.
Source: _
General Authority: SDCL 34-20G-72(1)
Law Implemented: SDCL 34-20G-26
City of Brookings
Staff Report
Brookings City & County
Government Center, 520
Third Street
Brookings, SD 57006
(605) 692-6281 phone
(605) 692-6907 fax
File #:ID 21-0392,Version:1
Action on an Addendum to the Armory Development Agreement.
Summary:
Linchpin Corporation is requesting an amendment to the 2020 Armory Agreement. The original due
diligence period expired July 1, 2021, and an extension was requested before the expiration. Staff
recommends approval of the addendum, which extends the due diligence period.
Recommendation:
Staff recommends approval.
Attachments:
Memo
Addendum
Agreement - October 2020
City of Brookings Printed on 8/5/2021Page 1 of 1
powered by Legistar™
City Council Agenda Memo
From: Paul Briseno, City Manager
Council Meeting: August 10, 2021
Subject: Armory Agreement Addendum
Person(s) Responsible: Mike Struck, Community Development Director
Steve Britzman, City Attorney
Summary:
Linchpin Corporation is requesting an addendum to the 2020 Armory agreement. The
original due diligence period expired July 1, 2021, and an extension was requested
before the expiration. Staff recommends approval of the addendum, which extends the
due diligence period.
Background:
The Armory is located at 221 Main Avenue and is a city-owned facility. In 2019/2020,
the City solicited through a competitive process requests for proposal. In October 2020,
an agreement was entered with Linchpin Corporation to redevelop the Armory and
further develop a hotel and parking ramp on the adjacent site.
The agreement contained the following phases:
Phase I: Due Diligence Period (July 1, 2021)
Phase II: Armory Renovations/Construction
Phase III: Hotel and Parking Ramp Construction (2023)
The City’s obligation included:
Responsibility for the costs of repairing the roof of the Armory (Tax Increment
Financing eligible expense).
Waiving of the disposal costs at the landfill associated with the hazardous
materials abatement and remediation.
Creation of two Tax Increment Financing (TIF) Districts, one for Phase II and one
for Phase IIl.
Creation of a Business Improvement District on the hotel.
Approval of alcohol license(s) upon completion of the application.
Transfer of the property for $0.00.
Use of the west parking lot and south side of 3rd Street parking for construction
staging.
Item Details:
The developer requests an addendum to the original armory agreement. The following
is requested:
An extension of the due diligence period until June 1, 2022.
o Allows the developer time to inspect the property, complete the 11.1
historical reviews, arrange to finance, and fulfill sale conditions contained
in the original agreement.
The developer desires to continue the project as either two s eparate phases or a single
phase after the due diligence. This extension allows the developer to fully examine all
opportunities for the successful redevelopment of this site.
Staff believes the request is reasonable and recommends approval.
Legal Consideration:
City Attorney Steve Britzman and Jim Wiederrich, attorney with Woods, Fuller, Schultz
& Smith, have worked with Linchpin Corporation on the development of this addendum.
Strategic Plan Consideration:
The redevelopment of the armory and construction of a hotel with a parking ramp meets
two of the Council’s strategic plan areas:
Sustainability – sustainable measures (training, implementation, policy),
environmental, future quality of life, Master Plans, Comprehensive Plan ; and
Economic Growth– community improvements, equitable opportunities,
community appearance, city-owned land, land purchasing policy, future
development/re-development, future growth.
Financial Consideration:
The City will front the costs of the Armory roof repairs (2020 estimate at $130,000) and
be reimbursed through TIF.
Options and Recommendation:
The City Council has the following options:
1. Approve as presented
2. Amend
3. Deny
4. Move the item to a study session
5. Do nothing
Staff recommends approval of the addendum as presented.
Supporting Documentation:
Addendum
Agreement – October 2020
{04304901.1}
1
ADDENDUM TO ARMORY DEVELOPMENT AGREEMENT
______________
THIS ADDENDUM TO DEVELOPMENT AGREEMENT dated August ____, 2021
(hereafter sometimes referred to as the “Agreement”) is made and entered into by and between
the City of Brookings, South Dakota, (hereinafter referred to as “City”) and Linchpin
Corporation, a South Dakota corporation, (hereinafter referred to as “Developer”).
WHEREAS, the parties have executed the Agreement, and based on a request by
Developer to extend the Armory Due Diligence Period, and the City determining the request is
reasonable; and
WHEREAS, this Addendum will solely amend the Development Agreement between the
parties to extend the due diligence period for the Armory Property to June 1, 2022.
NOW, THEREFORE, the parties to the Agreement amend the first full paragraph of
Section 3A entitled Due Diligence Period to provide a revised date for completion of the Armory
Due Diligence as follows:
A. Due Diligence Period.
Following execution of this Agreement, Developer will have a period of time to perform
its due diligence activities, to inspect the Property, to complete the 11.1 Historic
Preservation Review (as contemplated by SDCL 1-19A-11.1), to arrange equity
commitments and financing, and to fully satisfy all Armory Sale Conditions contained in
this Agreement. Developer will now have until June 1, 2022 to perform the due diligence
activities and determine if the Armory portion of the Project will proceed (“Armory
Initial Due Diligence Period”). The City determines that the Developer is pursuing its due
diligence activities in good faith and with diligent efforts, and therefore Developer,
having made a timely and reasonable request for an extension for a supplemental due
diligence period (the “Armory Supplemental Due Diligence Period”) is permitted an
extension of the Armory Due Diligence Period until June 1, 2022. Accordingly, the
Armory Supplemental Due Diligence Period and the Armory Initial Due Diligence Period
are now collectively referred to as the “Armory Due Diligence Period.” During the
Armory Due Diligence Period, Developer will have access to the Armory Property for
any inspections. During the Armory Due Diligence Period, Developer agrees to maintain
the Armory Property as nearly as possible in its pre-inspection condition, and Developer
will pay for and be responsible for any damages to the Armory Property during this
Armory Due Diligence Period which are caused by a negligent act of Developer or its
employees, agents, consultants, contractors or subcontractors in performance of
Developer’s due diligence activities. Notwithstanding the foregoing, City agrees
Developer’s due diligence activities may require testing of the physical conditions of the
Armory Property including, but expressly not limited to, testing of existing physical
conditions of the Armory Building. However, except for the Armory roof, Developer
will restore to its pre-due diligence condition the Armory Building and the Property,
ordinary wear and tear excepted. It is acknowledged and agreed Developer will
{04304901.1}
2
selectively remove portions of the existing ceiling in the Armory to allow Developer to
inspect the structural conditions for the roof and floor framing. Developer will not be
obligated to restore such removed portions, or other inspection-related construction or
demolition, back to the pre-due diligence condition.
The parties ratify and confirm all other provisions of the original Agreement, which are
not amended or modified by the terms of this Addendum.
Dated this ____ day of August, 2021.
CITY OF BROOKINGS
By_________________________________
ATTEST: Oepke G. Niemeyer, Mayor
_____________________________
Bonnie Foster, City Clerk
Dated this ____ day of August, 2021.
LINCHPIN CORPORATION
______________________________
By: Angela Boersma, Its President
DEVELOPMENT AGREEMENT
This Development Agreement, dated(insert date here), (the effective date of this Agreement),
is entered into between the City of Brookings, a South Dakota municipal corporation(the
City"), and, Linchpin Corporation, a South Dakota corporation, (the "Developer"). This
Agreement refers to City and Developer collectively as the "Parties" and singularly as a"Party".
RECITALS
WHEREAS,City is the owner of real property located within the City of Brookings at 221 Main
Avenue, and legally described as:
Lot 1, Front Street Addition, City of Brookings, Brookings County, South Dakota.
hereinafter referred to as "the Property;" and
WHEREAS, in order to strengthen the public planning process and to encourage private
participation in comprehensive planning, City has solicited proposals for development of the
Property and has selected Developer to develop the Property, pursuant to this Agreement; and
WHEREAS,on November 26, 2019, the City Council voted to enter into with Developer a
development agreement for the Adaptive Reuse/Redevelopment of the Historic Armory Building
located on the Property (the "Project"); and
WHEREAS, Developer has presented to City a development proposal for a commercial
development,to include the completion of Developer's due diligence activities for the Project
the "Phase 1"portion of the Project),the reconstruction of the Armory Building located on the
east one-half(approximately) of the Property(the "Armory Property") into office, retail and
hotel amenity spaces (the "Phase 2"portion of the Project), and the construction of a Hotel (the
Phase 3"portion of the Project)to be located on the west one-half(approximately) of the
Property (the"Hotel Property"); and
WHEREAS,the parties agree the Project is a three-phased development,the development costs
will be financed by Developer, a portion of the development costs will be repaid over time
through the use of property tax increment financing generated from the Project, and City will
have approval over all development plans of the Project prior to Developer commencing
construction of each of Phase 2 and Phase 3; and
WHEREAS,this Agreement permits Developer to proceed with its due diligence, inspections,
design,pre-leasing and financing with assurance that, subject to the conditions of this
Agreement,the Project may proceed and be completed as agreed upon by the Parties; and
WHEREAS,this Agreement is intended to: (1) minimize uncertainty in planning for, and
securing orderly development of the Project; (2)provide the certainty necessary for Developer to
make significant investments in public infrastructure, building renovations and other
improvements; (3) assure the timely and progressive installation of necessary improvements; (4)
Development Agreement
1
provide public services appropriate for each Phase of the Project's development; (5) establish
phasing for the orderly and measured build-out of the Project consistent with the desires of City
and Developer so the Property may be developed in a manner consistent with the development
objectives of City, as set forth in the City's request for proposals; (6) allow development to occur
at a pace that will assure integration of the Project into the existing community; and (7)provide
significant public benefits to City that City would not necessarily receive without this
Agreement; and
WHEREAS, in exchange for the benefits to City, Developer desires to receive from City (1)the
assurance it may proceed with this Project in accordance with the existing land use plan, city
ordinances, and the terms and conditions contained in this Agreement, and (2)the benefits
afforded Developer under this Agreement; and
WHEREAS, City agrees Developer may utilize a Related Party, or more than one Related Party,
for all or part of the work contemplated by this Agreement,with"Related Party" meaning any
party related to Developer by one of the relationships described in Section 267(b) of the United
States Internal Revenue Code of 1986, as amended, or any party controlled by or under common
control with Developer;
NOW THEREFORE, in consideration of the terms and conditions of this Agreement,
Developer and City agree to the foregoing recitals and as follows:
1. PHASED DEVELOPMENT.
A. Description of Phases.
The Parties anticipate and agree the development of the Property will occur in a phased and
staged manner. Phase 1 consists of the due diligence activities contemplated by this Agreement
during the Due Diligence Period, as identified in Section 3. Presuming Developer does not
provide notice of termination as is allowed in Section 3, Developer will proceed with Phase 2 of
the Project by purchasing the Armory Property and Armory Building in their"as is"condition.
Developer will,thereafter, be responsible for any operating and renovation expenses involving
the Armory Property and Armory Building, unless otherwise agreed with City in writing. Phase
2 of development will consist of renovations to the Armory Building located on the Armory
Property, with Phase 2 of the Project consisting of 5-6leasable office suites, public
evendconference space (as requested/required in the Armory redevelopment RFP), Proposed
Restaurant with bar/lounge, and back-of house spaces required to support such event/conference
spaces and dining establishment.
Developer will be allowed a Hotel Due Diligence Period (defined below) in connection with
Phase 3. Phase 3 of the Project will consist of improvements to the Hotel Property, which is
currently a paved parking lot. Phase 3 will consist of the construction of a hotel (the"Hotel"),
containing lobby, circulation cores connecting the Armory and Hotel spaces, Parking structure
the "Parking Ramp") for approximately 90 conventional spaces (assuming self-park, not
counting increases for valet parking configurations), approximately 60-70 hotel rooms, with
Deveiopment Agreement
2
proposed fitness, amenity, and back-of-house support spaces necessitated by the proposed
franchise requirements. The final square footage and room counts in Phase 3 will depend on
historic preservation review and any unique height limitations imposed by the city, state, or other
authority having jurisdiction with regards to the project.
The current design plans for the Project, as of the date of this Agreement, are set forth in the
attached Exhibit B.
2. PROPOSED PROJECT SCHEDULE.
A. Schedule Milestones.
Subject to satisfaction of Armory Sale Conditions and Hotel Sale Conditions contained in this
Agreement, the preliminary proposed schedule for the Project is as follows:
a. Execution of this Development Agreement: November 20, 2020.
b. Completion of Armory Initial Due Diligence Period by Developer: 8 months
from execution of Development Agreement.
c. Completion of the Armory Supplemental Due Diligence Period by Developer,
if Developer exercises an option to extend the Due Diligence Period pursuant
to Section 3.
d. Phase 2 Armory Property and Armory Building transfer within 30 days of
completion of the Due Diligence Period.
e. Commencement of construction of the renovations for the Armory Building
within 30 days following the transfer to Developer of title to the Armory
Property and Armory Building.
f. Completion of Phase 2 construction/development: 12 months from
closing/final possession of the Armory Building.
g. Completion of Hotel Due Diligence by Developer: 20 months from execution
of Development Agreement.
h. Phase 3 Hotel Property transfer within 30 days of completion of the Hotel Due
Diligence Period.
i. Commencement of construction of the Hotel and Parking Ramp within 30
days following the transfer to Developer of the Hotel Property.
j. Completion of Phase 3 construction/development: 18 months from the date of
closing on the Hotel property.
3. DUE DILIGENCE.
A. Due Diligence Period.
Following execution of this Agreement, Developer will have a period of time to perform its due
diligence activities, to inspect the Property, to complete the 11.1 Historic Preservation Review
as contemplated by SDCL 1-19A-11.1), to arrange equity commitments and financing, and to
fully satisfy all Armory Sale Conditions contained in this Agreement. Developer will have until
July 1,2021 to perform the due diligence activities and determine if the Armory portion of the
Development Agreement
3
Project will proceed ("Armory Initial Due Diligence Period"). If Developer is pursuing its due
diligence activities in good faith and with diligent efforts, as is reasonably determined by City,
Developer may, at its option, by written notice to City no later than(June 1,2021, request an
extension for a supplemental due diligence period(the"Armory Supplemental Due Diligence
Period"). If Developer requests and is granted the Armory Supplemental Due Diligence Period
with which to complete its due diligence activities for the Armory Property, then the Armory
Supplemental Due Diligence Period and the Armory Initial Due Diligence Period are collectively
referred to as the "Armory Due Diligence Period." If Developer does not request or is not
granted the Armory Supplemental Due Diligence Period, then the Armory Initial Due Diligence
Period will be the Armory Due Diligence Period. City will have unilateral authority to accept or
reject Developer's request for an extension of the Armory Initial Due Diligence Period, but such
authority will be exercised in a reasonable fashion and will seek to minimize to Developer any
material detriment. During the Armory Due Diligence Period, Developer will have access to the
Armory Property for any inspections. During the Armory Due Diligence Period, Developer
agrees to maintain the Armory Property as nearly as possible in its pre-inspection condition, and
Developer will pay for and be responsible for any damages to the Armory Property during this
Armory Due Diligence Period which are caused by a negligent act of Developer or its
employees, agents, consultants, contractors or subcontractors in performance of Developer's due
diligence activities. Notwithstanding the foregoing, City agrees Developer's due diligence
activities may require testing of the physical conditions of the Armory Property including, but
expressly not limited to,testing of existing physical conditions of the Armory Building.
However, except for the Armory roof, Developer will restore to its pre-due diligence condition
the Armory Building and the Property, ordinary wear and tear excepted. It is acknowledged and
agreed Developer will selectively remove portions of the existing ceiling in the Armory to allow
Developer to inspect the structural conditions for the roof and floor framing. Developer will not
be obligated to restore such removed portions, or other inspection-related construction or
demolition, back to the pre-due diligence condition.
The parties acknowledge and agree Phase 2 and Phase 3 of the Project are separate, distinct, and
the success of Phase 2 is not dependent on the successful completion of Phase 3. The parties
intend and agree for purposes of this Agreement, Developer will not be required to finalize all
plans, financing, permitting, etc., for the Hotel and Parking Ramp construction prior to the
commencement of Phase 2, including the Armory Sale to Developer. Notwithstanding the
foregoing, if Developer decides, during the Armory Due Diligence Period, to not proceed with
Phase 2, Developer will forfeit the right to proceed with Phase 3.
Developer will have a second due diligence period(the "Hotel Due Diligence Period") after the
commencement of Phase 2 of the Project to complete its due diligence activities for the Hotel
Property. Developer will have until June l, 2022 to perform its due diligence activities and
determine if the Hotel portion of the Project will proceed. During the Hotel Due Diligence
Period, Developer will undertake to meet and satisfy all of the Hotel Sale Conditions and other
requirements under this Agreement in connection with Phase 3 of the Project, including without
limitation, (i) finalization of the Hotel and Parking Ramp construction plans, (ii) Developer's
submission, and City's approval of any necessary, or reasonably requested, zoning or other land
use regulation changes or exceptions in connection with Phase 3, and (iii)Developer's obtaining
from City tax increment financing for Phase 3.
Development Agreement
4
B. Due Dili ence Activities.
Further, due diligence activities may include, but are not limited to the following:
i) Developer's physical testing of the Property, including structures on the Property
and environmental testing of the Property.
ii) Developer's completion of site analysis work, including but not limited to,
engineering studies, environmental analysis, and 11.1 Historic Preservation
Review.
iii) Developer's finalization of the Developer's Development Plan.
iv) Developer's submission, and City's approval of any necessary, or reasonably
requested, zoning or other land use regulation changes or exceptions.
v) Obtaining from City tax increment financing under two separate applications, one
for Phase 2 and one for Phase 3.
vi) Other necessary activities as mutually agreed by the parties.
Notwithstanding anything to the contrary contained herein, Developer may arrange and
commence work to repair the Armory roof and undertake any and all necessary hazardous
material abatement at the Armory during the Armory Due Diligence period. Prior to the
commencement of the roof repair and Hazmat Abatement, Developer will provide City with a
separate fixed price bid or not to exceed guaranteed maximum price for the cost of the repair of
the Armory Building roof, which cost is to be reimbursed by City. The total cost of the Armory
Building roof may be included in the TIF for Phase 2, and in that event,will be the first cost
reimbursed by the taxes collected therefor. Developer will be responsible for contracting for and
arranging such Hazmat Abatement, subject to City waiving dumping/disposal fees incurred by
Developer in connection with the disposal of hazardous material at the City's landfill to the
extent disposal at the City's landfill is allowed under applicable laws.
C. Access to Property.
For purposes of Developer's access to the Property during the Armory Due Diligence Period and
the Hotel Due Diligence Period, City agrees Developer will be considered a tenant of City in
connection with Developer's rights and obligations during the Armory Due Diligence Period and
the Hotel Due Diligence Period. To that end, City will cooperate with Developer to allow
Developer to seek"Tenant Improvement" financing in connection with any activities of
Developer during the Armory Due Diligence Period and the Hotel Due Diligence Period,
provided City incurs no obligation to make improvements during Developer's"tenancy,"and the
Property remains free and clear of all mortgages, mechanics' liens,judgements, security interests
and other encumbrances of any kind.
Development Agreement
5
D. Termination Durin Due Dili ence Periods.
Should the results of Developer's activities described in this Section be not satisfactory to
Developer, then, prior to the expiration of the Armory Due Diligence Period, Developer must
notify City in writing of the failure to satisfy Developer's Armory Due Diligence requirements
and Developer's election to terminate this Agreement, in which case this Agreement will become
null and void, except for the provisions of Sections 3, 21, 22, 23, 28 and 32. If Developer has
not given to City notice of termination by the end of the Armory Due Diligence Period, then
Developer will be obligated to complete all Armory Sale Conditions and proceed to complete the
Project.
Should the results of Developer's activities in connection with the Hotel Due Diligence Period be
not satisfactory to Developer, then Developer must notify City in writing of the failure to satisfy
Developer's Hotel Due Diligence requirements and Developer's election to terminate Phase 3 of
the Project. Developer's termination of Phase 3 of the Project will render all terms and
conditions of this Agreement in connection with Phase 3, null and void, except for the provisions
of Sections 3, 21, 22, 23, 28 and 32. Developer's termination of Phase 3 of the Project will not
impact Developer's or City's obligations under this Agreement in connection with Phase 2 of the
Project.
4. SALE OF ARMORY PROPERTY AND ARMORY BUILDING.
A. City's Sale Obli ations.
Upon Developer's successful completion of the Armory Sale Conditions, as defined in Section
4.C, City agrees to convey to Developer the Armory Property and the Armory Building. The
conveyance will be made subject to the terms and conditions of this Agreement. City will utilize
SDCL 9-27-36, SDCL 9-27-37, and SDCL 9-54-1 to facilitate the transfer of the Armory
Property and Armory Building for economic development purposes. The Parties intend and
agree the provisions of this Agreement will constitute covenants which will run with the Armory
Property and Armory Building, and the burdens and benefits of this Agreement will bind and
inure to all successors in interest to the Parties. Accordingly,the terms of this Agreement may
be recorded, as an attachment to an affidavit or by other means acceptable to the Register of
Deeds, in the Brookings County Office of the Register of Deeds, as covenants running with the
Armory Property and Armory Building.
B. Consideration/Purchase Price for Armor perty and Armorv Buildin.
Developer agrees to acquire, and City agrees to convey to Developer, the Armory Property and
Armory Building for and in consideration of the terms and agreements of this Agreement. No
cash consideration will be payable for the Armory Property and Armory Building.
Development Agreement
6
C. Sale Conditions for Armory Propertv and Armory Buildin.
City will not be obligated to sell to Developer, and Developer will not be obligated to purchase
from City,the Armory Property and Armory Building, unless during the Armory Due Diligence
Period Developer has completed, and City has approved, in its sole discretion, all of the
following requirements (the"Armory Sale Conditions"):
i) Developer has not given notice of termination of this Agreement during the
Armory Due Diligence Period.
ii) Developer has provided documentation confirming Developer, or its Related
Parties, has the equity and loan financing required to complete Phase 2.
iii) Developer has provided Developer's Development Plan confirming use of the
space within the Armory Building, the design and construction schedules
therefore, and the proposed ownership, leasing and management arrangements for
the Armory Building.
iv) Developer has provided to City the Armory Building construction documents, as
defined by the American Institute of Architects or the Engineers Joint Contract
Documents Committee and meeting the requirements of Section 12.A.
v) Developer has until the closing date on the sale of the Armory Building and the
Armory Property to meet the requirements and fulfill Developer's obligations
under this Agreement and the Development Plan.
vi) Developer has provided one or more fixed price bids or guaranteed maximum
prices for completion of Phase 2, exclusive of the cost of repairing the Armory
Building roof.
vii) There are not pending any third party lawsuits or claims, or governmental
investigations, actions or proceedings, against Developer and its Related Parties
that would have a material adverse impact upon the Project or the Property.
viii) Developer has obtained for Phase 2 all permits, historical building approvals,tax
increment financing, and other licenses, and approvals required in order to
commence and complete construction for the renovation of the Armory Building.
ix) Developer has disclosed the identities and obligations of all Related Parties in
connection with Phase 2.
x) Developer has obtained payment and performance bonds for the full cost of the
bids or guaranteed maximum prices have been obtained for Phase 2.
xi) Developer has applied for, and City has awarded, tax increment financing for
Phase 2.
xii) This Agreement will not be or have been subject to a pending or adverse
referendum as described in Section 11.
xiii) Developer is not in default of its obligations under this Agreement.
Development Agreement
7
5. SALE OF HOTEL PROPERTY.
A. Cit,y's Sale Obli at ions.
Upon Developer's successful completion of the Hotel Property Sale Conditions, as defined in
Section S.C, City agrees to convey to Developer the Hotel Property. The conveyance will be
made subject to the terms and conditions of this Agreement. City will utilize SDCL 9-27-36,
SDCL 9-27-37, and SDCL 9-54-1 to facilitate the transfer of the Hotel Property for economic
development purposes. The Parties intend and agree the provisions of this Agreement will
constitute covenants which will run with the Hotel Property, and the burdens and benefits of this
Agreement will bind and inure to all successors in interest to the Parties. Accordingly, the terms
of this Agreement may be recorded, as an attachment to an affidavit or by other means
acceptable to the Register of Deeds, in the Brookings County Office of the Register of Deeds, as
covenants running with the Hotel Property.
B. Consideration/Purchase Price for Hotel Property.
Developer agrees to acquire, and City agrees to convey to Developer, the Hotel Property for and
in consideration of the terms and agreements of this Agreement.No cash consideration will be
payable for the Hotel Property.
C. Sale Conditions for Hotel Property.
City will not be obligated to sell to Developer, and Developer will not be obligated to purchase
from City,the Hotel Property, unless during the Hotel Due Diligence Period, Developer has
completed, and City has approved, in its sole discretion, all of the following requirements (the
Hotel Sale Conditions"):
i) Developer has not given notice of termination of this Agreement during the Hotel
Due Diligence Period.
ii) Developer has provided documentation confirming Developer, or its Related Parties,
has the equity and loan financing required to complete Phase 3.
iii) Developer has provided documentation confirming Developer or the Hotel franchisee
has the equity and loan financing required to complete Phase 3.
iv) Developer has provided Developer's Development Plan confirming use of the Hotel
and Parking Ramp, the design and construction schedules therefore, and the proposed
ownership, leasing and management arrangements for the Hotel and Parking Ramp.
v) Developer has provided the Hotel and Parking Ramp construction documents, as
defined by the American Institute of Architects or the Engineers Joint Contract
Documents Committee, and meeting the requirements of Section 12.A.
vi) Developer has, as of the closing date on the sale of the Hotel Property, met all of the
requirements of and fulfilled Developer's obligations under this Agreement and the
Development Plan.
vii) Developer's hotel franchise or other similar arrangement for construction and
operation of the Hotel, as approved by City, remains in full force and effect.
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viii) Developer has received City's approval for the establishment of a second business
improvement district for Phase 3, separate from the general business improvement
district for the maintenance of the Parking Ramp.
ix) Developer has provided one or more fixed price bids or guaranteed maximum price
for completion of Phase 3.
x) There are not pending any third party lawsuits or claims, or governmental
investigations, actions or proceedings, against Developer and its Related Parties that
would have a material adverse impact upon the Project or the Property.
xi) Developer has obtained for Phase 3 all permits, historical building approvals, and
other licenses, and approvals required in order to commence and complete
construction for the Hotel Project.
xii) Developer has disclosed the identities and obligations of all Related Parties.
xiii) Developer has obtained payment and performance bonds for the full cost of the bids
or guaranteed maximum prices have been obtained for Phase 3.
xiv) Developer is not in default of its obligations under this Agreement.
xv) Developer is not in default of its obligations under any engineering, architectural,
construction or other contract for the renovation of the Armory Building for Phase 2.
xvi) Developer and its Related Parties are not in default of their equity and financing
commitments for the renovation of the Armory Building for Phase 2.
xvii) This Agreement will not be or have been subject to a pending or adverse referendum
as described in Section 11.
xviii) Developer has applied for, and City has awarded, tax increment financing for Phase 3.
6. SALE REQUIREMENTS.
A. City to Provide Marketable Title.
Developer's obligation to purchase the Property pursuant to this Agreement is contingent upon
City providing to Developer marketable title to the Property by warranty deeds, which warranty
deeds only contain easements, rights-of-way and restrictions of record acceptable to Developer.
7. CLOSING COSTS.
A. Responsibilities of Parties.
Developer and City agree to equally split the cost of title insurance search fees and premiums for
owner's policies of title insurance, and all closing costs of the closing agent associated with the
sale and transfer of the Property from City to Developer. Developer will pay all title insurance
fees for endorsements requested by Developer and any lender policy of title insurance.
8. DEVELOPER OBLIGATIONS.
A. General Description of Developer's Obli at ions.
Developer understands and agrees to the following obligations:
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i) Complete site development and environmental assessment of the Property.
ii) Confirm the applicable land use regulations and develop the Property consistent
with all applicable regulations.
iii) Complete the analysis of necessary public and private infrastructure and
street/utility improvements, and pay for the improvements required, all in
accordance with this Agreement and Developer's proposal for the Property.
iv) Pay the usual and customary building permit fees.
v) Pay the usual and customary application and development fees of City.
vi) Pay all Phase 1, Phase 2, and Phase 3 Environmental Site Assessments of the
Property desired by Developer or required by applicable laws.
vii) Submit two applications for the use of tax increment financing, one for each of
Phase 2 and Phase 3, and adhere to applicable terms and conditions of the duly-
approved tax increment development agreements to be negotiated with City.
viii) Procure goods and services for architectural services, engineering services and
construction and renovations of the Armory Building, Hotel and Parking Ramp,
and construct the Project in accordance with this Agreement and Developer's
proposal for development of the Project.
ix) Cause, at Developer's cost, the plat to be prepared and filed for the separation of
the Armory Property from the Hotel Property.
B. Improvements.
Developer will develop the Property in accordance with and subject to the terms and conditions
of this Agreement, any amendments to this Agreement and pursuant to Developer's
Development Plan as, from time-to-time, may be approved by City. Developer's failure to
comply with any term or condition of, or fulfill any obligation of, Developer under this
Agreement, any amendments to this Agreement or Developer's Development Plan as may have
been approved pursuant to this Agreement, will constitute a default by Developer under this
Agreement.
C. Developer's Obligations to Pay for Improvements.
Except for the waiver of landfill fees by City for the disposal of hazardous material at City's
landfill site, and the cost of repairing the roof of the Armory Building, as approved by City
pursuant to Section 9.A(vii) of this Agreement, Developer will be responsible, at its sole cost
and expense,to pay for and make the improvements to the Property.
D. Cit, 'pplications.
City agrees it will accept for processing, review and action, all completed applications for
zoning, special permits, development permits, tentative maps, subdivision maps, tax increment
financing applications, liquor license applications, business improvement district proposals, and
other submissions for this Project in accordance with its customary procedures and this
Agreement; provided, however City will exercise any and all commercially reasonable efforts to
ensure that Developer, or its assigns, is able to purchase and/or obtain a full restaurant liquor
license and, as one may become available under the City's allocation or apportionment
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procedures, an"on-sale" liquor license City will inform Developer, upon request, of the
necessary submission requirements pertaining to permit applications, and will review
Developer's applications and schedule the applications for review or hearing by the appropriate
authority. Notwithstanding the foregoing, City is not bound to approve any and all applications,
permits, plans and other submissions, all of which must be completed to City's satisfaction. If
Developer is not able to obtain all approvals, permits and other consents required, in Developer's
sole opinion, Developer's sole remedy will be to terminate this Agreement during the Armory
Due Diligence Period or the Hotel Due Diligence Period, as applicable. After the Armory Due
Diligence Period or the Hotel Due Diligence Period, as applicable,provided Developer has not
terminated this Agreement in accordance with this Agreement, Developer will not be allowed to
terminate this Agreement, and must amend its plans as required in order to obtain City's
approvals, permits and other consents.
E. Condition of Property.
Developer will be allowed to make inspections of the Property as part of Developer's due
diligence activities. DEVELOPER'S PURCHASE OF THE PROPERTY WILL BE ON AN
AS-IS WITH ALL FAULTS" BASIS WITH ANY AND ALL PATENT AND LATENT
DEFECTS, INCLUDING THOSE RELATING TO THE ENVIRONMENTAL CONDITION
OF THE PROPERTY, AND DEVELOPER WILL NOT RELY ON ANY
REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, OF ANY KIND
WHATSOEVER FROM CITY AS TO ANY MATTERS CONCERNING THE CONDITION
OF THE ARMORY BUILDING OR PROPERTY.
9. CITY OBLIGATIONS.
A. City understands and agrees to the following obligations:
i) Assist Developer with the documentation required by SDCL Ch. 11-9 and the
City's TIF Policy, including but expressly not limited to the TIF Project Plans for
Phase 2 and Phase 3, consistent with this Development Agreement.
ii) Assist Developer with the filing of liquor license applications consistent with this
Development Agreement.
iii) Assist Developer with the documentation required under SDCL Ch. 9-55 and
Brookings City Ordinances in connection with the establishment of a business
improvement district in connection with Phase 3 of the Project.
iv) Transfer to Developer the Armory Building and Armory Property, consistent with
the terms and conditions this Agreement.
v) Upon the transfer of the Armory Building and Armory Property, City will provide
to Developer access to the Hotel Property, without any additional payments or
other consideration being provided by Developer, for purposes of construction
staging and other uses related to Developer's construction under Phase 2 of this
Agreement. Developer will have the authority to fence off all or a portion of the
Hotel Property for such purposes.
vi) City will provide to Developer access to the public parking area on the south side
of 3`d Street, without any additional payments or other consideration, for purposes
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of construction staging and other uses related to Developer's construction under
Phase 3 of the Project. Developer will have the authority to fence off all or a
portion of the public parking area for such purposes.
vii) It is acknowledged and agreed by the Parties the roof of the existing Armory
building experienced certain property damage in the summer of 2019. City will
be responsible for paying the costs to restore the roof to watertight and"like new"
condition. Restoration will occur during the Armory Due Diligence Period, or
during Phase 2. Developer will be responsible for arranging and contracting for
the work on the roof to be completed; provided, however, City will fund the costs
to bring the roof back into the watertight and"like new"condition. The total cost
of the Armory Building roof may be included in the TIF for Phase 2, and in the
event, will be the first cost reimbursed by the taxes collected therefor. City will
not be responsible for costs and expenses in excess of the costs approved by City
during the Armory Due Diligence Period.
viii) Developer will be responsible for paying for any and all hazardous material
abatement and removal costs ("Hazmat Abatement") in connection with the
Armory Building. To that end, Developer will be responsible for contracting for
and arranging such Hazmat Abatement, subject to City waiving dumping/disposal
fees incurred by Developer in connection with the disposal of hazardous material
at the City's landfill to the extent disposal at the City's landfill is allowed under
applicable laws.
ix) Signing the plat which will separate the Armory Property from the Hotel
Property.
10. TAX INCREMENT FINANCING ("TIF").
As an incentive to development of the Property,tax increment financing ("TIF") for this
Project will be available under the following terms and conditions, and consistent with the
City's Tax Increment Finance District Guidelines, dated January 13, 2009, and attached
hereto as Exhibit A ("TIF Policy").
a. Developer may apply for tax increment financing pursuant to City's TIF Policy
governing the application and use of tax increment financing and must pay the
applicable application fees. City agrees to expeditiously process said applications and
approve mutually agreeable ta c increment finance plans for the tax increment
districts,provided applicant meets City's and state of South Dakota's tax increment
financing requirements. The parties agree, a t increment district will be applicable
for Phase 2, and a separate tax increment district will be applicable for Phase 3.
b. Developer must pay for and finance all development, construction, and Project costs
identified in the Tax Increment Project Plans, as that term is defined in SDCL 11-9-1
and referenced in the TIF Policy, with reimbursement to Developer subject to receipt
of future tax increment proceeds from the TIF districts. The Tax Increment Project
Plan must describe the eligible costs to be reimbursed from t increment proceeds
and the aggregate m imum amount and duration for which t increment proceeds
may be reimbursed.
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c. As stipulated in the TIF Policy,properties in a certified t increment district are not
eligible for the Brookings County's discretionary property tax formula until the
district is de-certified.
d. The application for Phase 2 will be filed and approved during the Armory Due
Diligence Period, with the commencement of the TIF period being timed so as to
optimize the use of the TIF funding.
e. The application for Phase 3 may be filed and approved during the Hotel Due
Diligence Period with the commencement of the TIF period being timed so as to
optimize the use of the TIF funding.
f. The City's obligation to reimburse Developer for any costs identified in a Tax
Increment Project Plan will be terminated in the event City approval of a tax
increment district and tax increment financing is referred by the voters and the voters
do not approve the tax increment district and tax increment financing.
11. REFERENDUM.
A. Impact of Successful Referendum.
The Parties acknowledge the lack of a successful referendum on the City Council's approval of
this Agreement is a condition precedent to the performance of this Agreement by both parties.
Briefly stated,the condition precedent concerns the right of the public to petition for referendum
concerning this Agreement. A referendum is viewed by City as unlikely. City's obligation to
sell to Developer the Property, along with this Agreement, will be terminated if the City
Council's decision to sell the Property is referred by the voters and the voters do not approve this
Agreement. "Referred" means a Petition to Refer, signed by the requisite residents, which
Petition to Refer is filed and the voters of the City, at an election, vote to nullify the decision of
City to sell to Developer the Property. In the event of a successful referral, City's obligation to
sell Property pursuant to this Agreement will be null and void. This condition precedent will be
met at the later of the expiration date of any referendum period if there is no referendum (20 days
after the publication of the Resolution approve this Agreement), or the date following the
election canvassing if there is a referendum election, and this Agreement is approved at the
referendum election. However, a referendum decision by voters which does not approve this
Agreement will permit City and Developer to terminate the Project at no cost or liability to either
Party. A referendum is not likely, but all government real estate transactions are subject to the
possibility of a referendum.
12. PLANS AND SPECIFICATIONS.
A. Form of Construction Documents.
Developer agrees to prepare, at Developer's expense, architect or engineer-stamped construction
documents as defined by the American Institute of Architects or the Engineers Joint Contract
Documents Committee for each of Phase 2 and Phase 3 as set forth in Sections 4.0 (iv) and
S.0 (v). Site plans will be prepared for the Armory Property and the Hotel Property containing
such improvements, and will be drawn to scale addressing zoning,platting, and applicable
subdivision regulations. Such construction documents will include, but not be limited to, lots
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and block design, street layouts, easements and rights-of-way dedications, water systems,
sanitary sewer systems, storm sewer systems, electrical systems and lines, natural gas systems
and lines, and telecommunication systems, street lighting, curb and gutter, signage, and other
infrastructure deemed necessary by City. The Parties agree the street system will be public
streets.
13. UTILITIES CONSTRUCTION/RELOCATION.
A. Developer's Obli ations for Utilities.
Developer will be responsible for costs associated with utility improvements and/or relocation of
existing utilities consistent with plans and specifications to be approved by City as necessary for
the development and construction of the Project. Developer agrees to solicit, encourage, and
utilize all reasonable and prudent means to employ or contract with local contractors, vendors,
and service providers for these purposes.
14. PROJECT IMPROVEMENTS.
A. Construction Documents/Financing.
Developer will be responsible for construction documents suitable for construction, and be
responsible for overall financing of improvements for Phase 2 and Phase 3 improvements
associated with an adaptive reuse/redevelopment of the Property.
B. Phase 2 Improvements.
Phase 2 improvements must be consistent with the restoration of the exterior shell and features of
the existing Armory Building and associated interior renovations must be consistent with
providing professional office, retail, convention/meeting space, restaurandlounge, and/or back-
of-house operations space associated with a hotel and/or convention space.
C. Phase 3 Improvements.
Phase 3 improvements must consist of improvements associated with construction of a multi-
story Hotel and associated parking by way of a Parking Ramp to accommodate the needs of the
Hotel, convention space and offices as well as additional parking spaces to be made available to
the public.
15. SIGNAGE.
A. Developer Si n age.
Developer will be allowed to install signage advertising the Project following execution of this
Agreement with the design, number, and locations mutually agreed upon by both Parties. Any
signage must follow applicable signage ordinances, and permits and fees will be Developer's
responsibility.
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16. RULES,REGULATIONS AND OFFICIAL POLICIES.
A. Applicabilitv of Rules, etc.
For the term of this Agreement,the rules, regulations, ordinances and official policies governing
the permitted uses of land,the density and intensity of use, applicable to the development of the
Property, including the zoning of the Property and the maximum height and size of proposed
buildings (but not construction standards), will be those rules, regulations, ordinances and
official policies in force on the effective date of this Agreement. Except as otherwise provided
in this Agreement, to the extent any future changes in the zoning ordinance or any future rules,
ordinances, regulations or policies adopted by City purport to be applicable to the Property,but
are inconsistent with the terms and conditions of this Agreement, the terms of this Agreement
will prevail, unless the Parties mutually agree to amend or modify this Agreement. To the extent
any future changes in the zoning ordinances or any future rules, ordinances, regulations or
policies adopted by City are applicable to the Project and are not inconsistent with the terms and
conditions of this Agreement, such future changes in the zoning ordinances or such future rules,
ordinances, regulations or policies will be applicable to this Project.
B. State and Federal Laws.
This Section will not preclude any requirements of Developer to comply with City rules,
ordinances, regulations or policies which are required by state or federal laws or regulations. In
the event state or federal laws or regulations enacted after the date of this Agreement prevent or
preclude compliance with one or more provisions of this Agreement, or require changes in plans
or permits approved by City, this Agreement may be modified, extended or suspended as may be
necessary to comply with such state or federal laws or regulations or the regulations of any other
governmental jurisdiction. To the extent any actions of federal or state agencies have the effect
of preventing, delaying or modifying development of the Project, City will not in any manner be
liable for any such prevention, delay or modification of said development. Developer is
required, at its cost and without cost to or obligation on the part of City, to comply with such
development restrictions
C. Health/Safetv/Phvsical Risk Codes, etc.
Nothing herein may be construed to limit the authority of City to adopt and apply codes,
ordinances and regulations which have the legal effect of protecting persons or property from
conditions which create a health, safety or physical risk.
D. Compliance with Construction Standards.
All construction documents and plans for the Project must comply with the rules, regulations and
design guidelines in effect at the time the construction, improvements, and plans are approved.
Laws, ordinances, resolutions, rules, regulations and official policies governing the design,
improvement and construction standards and specifications applicable to public improvements to
be constructed by Developer will be those in force and effect at the time the applicable permit
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approval for the construction of such improvements is granted. If no permit is required for the
public improvements,the date of permit approval will be the date the improvement plans are
approved by City or the date construction for the public improvements is commenced, whichever
occurs first.
E. Uniform Codes Applicable.
This Project will be constructed in accordance with the requirements of the International
Building, Mechanical, Plumbing, Electrical, and Fire Codes, in effect at the time of approval of
the appropriate building, grading, encroachment or other construction permits for the Project.
All infrastructure improvements will be constructed in accordance with the provisions of the
codes delineated herein in effect at the start of construction of such infrastructure.
F. Public Hearin s.
This section may not be construed to limit the authority or obligation of City to hold necessary
public hearings,to limit discretion of City or any of its officers or officials with regard to laws,
ordinances, resolutions, rules, regulations, and official policies which require the exercise of
discretion by City or any of its officers or officials, provided their respective actions may not
conflict with the terms and conditions of this Agreement.
17. RESTAURANT LICENSES.
A. License Guidelines/Applications.
Both parties understand and agree some businesses seeking to locate in the Project may apply for
various types of restaurant alcoholic beverage or malt beverage licenses for their respective
business that may be available. The processing of these applications must follow established
procedures pursuant to city and state regulations.
18. PERFORMANCE METRICS; REVIEWS BY CITY.
A. Snecific Development Obli atgions•
Developer and City have agreed the development of the Property by Developer is subject to
certain specific development obligations, described herein. These specific development
obligations,together with the other terms and conditions of this Agreement,provide the
incentive and consideration for City entering into this Agreement.
B. Development Timin
Developer will be obligated to comply with the terms and conditions of this Agreement at those
times specified in this Agreement. The parties acknowledge Developer cannot, at this time,
predict with certainty when or the rate at which plans, specifications, and reviews will be
developed and/or completed. As a result, City agrees to exercise reasonable discretion with
respect to deadlines and other milestone with respect to Developer and the Project such that
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City's actions will seek to minimize detriment to Developer and the Project. In addition, City
will, if Developer meets the requirements set forth in Section 3.A, approve the extension of the
Armory Due Diligence Period to include the Armory Supplemental Due Diligence Period.
Similarly, with respect to Phase 3 and the Hotel Due Diligence Period, City will approve
extensions of such deadlines to minimize detriment to Developer and the Project. It is
acknowledged as of the date of this Agreement, the COVID-19 pandemic is having a material
adverse effect on the hotel and hospitality industry and, as such, Developer's Hotel Due
Diligence Period may need to be extended until such time as current economic environments for
the hotel and hospitality industry become more favorable.
C. Quarterlv Review.
Developer will provide to City, during each of the Phases, a quarterly report as to the status of its
progress with respect to the Project, and the City Manager will, when such reports are provided,
review the status of the Project and evaluate the extent of good faith substantial compliance with
the terms and conditions of this Agreement and the Development Plan. Such periodic review
will be limited in scope to compliance with the terms and conditions of this Agreement and the
Development Agreement.
Developer must demonstrate good faith compliance with the terms and conditions of this
Agreement and the Development Agreement, and must provide such information as may be
reasonably requested by the City Manager, and take those actions necessary to restore
compliance with this Agreement and the Development Agreement, as determined by the City
Manager to reestablish compliance with this Agreement and the Development Agreement.
If, following such review, the City Manager is not satisfied that Developer has demonstrated
good faith compliance with all the terms and conditions of this Agreement and the Development
Agreement, or for any reason, the City Manager refers to the City Council the matter along with
recommendations for possible action, Developer will be provided, in writing at least 10 business
days in advance of the matter coming before the City Council, a summary of the reasons for such
referral to the City Council. Developer will be afforded reasonable opportunity to rebut such
reasons and will be provided a reasonable opportunity to appear before the City Council, should
Developer so choose.
Failure of City to conduct a quarterly review will not constitute a waiver by City of its rights to
otherwise enforce the provisions of this Agreement and the Development Agreement. Nor will
Developer have or assert any defense to such enforcement by reason of any such failure to
conduct a quarterly review.
19. WARRANTIES.
A. Warranties of Citv.
City, as the seller of the Property, hereby represents, warrants and covenants to Developer, as the
buyer of the Property, the following:
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a. City is the fee-owner of the Property with full authority to sell and transfer to
Developer the Property.
b. There is currently no action or proceeding pending against City pertaining to the
Property.
c. To the best of City's knowledge,there are no unrecorded contracts, leases, easements,
or other agreements, or claims of any third party, affecting the use,title, occupancy or
development of the Property.
d. Each and every undertaking and obligation of City under this Agreement will be
performed by City in a timely manner.
e. To the best of City's knowledge, City has made to Developer all required property
disclosures required by law as to all wells, private sewer systems, and aboveground or
underground storage tanks located on the Property.
f. Immediately upon execution of this Agreement, City agrees to provide to Developer
any and all environmental reports and analysis in its possession pertaining to the
Property.
g. City warrants there are no outstanding special assessments or taxes encumbering the
Property.
h. Upon the signing and delivery of this Agreement, this Agreement will be legally
binding upon City and enforceable against City in accordance with all of its
provisions.
i. The transactions contemplated by this Agreement have been duly authorized through
appropriate action of City and the City Council and, as a result of such actions, City,
by and through the Mayor and Clerk, are authorized, directed, and empowered to sign
this Agreement and perform all of City's obligations under this Agreement.
B. Warranties of Developer.
a. Developer is duly incorporated, validly existing and in good standing pursuant to
the laws of the jurisdiction of its incorporation, and is duly qualified to do
business and is in good standing in the jurisdiction in which the Property is
located.
b. Developer is authorized and empowered to enter into this Agreement and perform
all of its obligations under this Agreement.
c. Upon the signing and delivery of this Agreement, this Agreement will be legally
binding upon Developer and enforceable against Developer in accordance with all
of its provisions.
d. The person signing this Agreement on behalf of Developer has been duly
authorized to sign and deliver this Agreement on behalf of Developer.
e. Developer has not committed any act or permitted any action to be taken which
would adversely affect its ability to fulfill its material obligations under this
Agreement.
f. The execution and delivery of this Agreement, and the performance of
Developer's obligations under this Agreement, will not violate or breach, or
conflict with,the terms, covenants or provisions of any agreement, contract, note,
mortgage, indenture or other document of any kind whatsoever to which
Developer is a party.
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20. DEVELOPER'S INSURANCE.
A. Liability Insurance.
Developer, at its sole cost and expense, must keep and maintain in full force and effect a policy
of commercial general liability insurance insuring all operations of Developer in or about the
Property for bodily injury and property damage liability for limits of liability not less than: (a)
1,000,000 each occurrence (combined single limit for bodily injury and property damage); (b)
1,000,000 for personal injury liability; and (c) $1,000,000 general aggregate. The policy must
insure against any and all liability of Developer and City with respect to the Property. The
policy must name City as an additional insured by endorsement.
B. Property Insurance on the Armory Building.
Developer, at its sole cost and expense, must keep and maintain in full force and effect a policy
of property insurance on the insurable improvements comprising the Armory Building, once title
has been transferred to Developer.
C. Builder's Risk Insurance.
Developer, at its sole cost and expense, must obtain, keep and maintain builder's risk insurance
policies equal to the cost of the improvements to be made to the Armory Building and the cost of
the construction of the Hotel.
D. Propertv Insurance on Personal Property.
Developer, at its sole cost and expense, must keep and maintain in full force and effect a policy
of insurance covering all of the items compromising Developer's equipment and personal
property. City has no responsibility for loss or damage to the same.
E. Worker's Compensation Emplover's Liabilitv Insurance.
Developer, at its sole cost and expense, must keep and maintain during the term of this
Agreement, worker's compensation insurance as required under South Dakota law, and
employer's liability insurance in an amount not less than $500,000 each accident, $500,000
disease each employee, and $500,000 disease policy limit, covering all employees employed by
Developer.
F. Business Auto Insurance.
Developer, at its sole cost and expense, must keep and maintain business auto liability insurance
for the combined single limit of not less than$1,000,000 for owned, non-owned and leased
vehicles.
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G. Certificate of Insurance.
Developer will cause to be delivered to City a certificate of insurance with regard to the policies
required under this Section 20, and which provide, by endorsement,the insurance policies will
not be canceled without at least 30 days' notice to City.
H. Developer's Failure to Maintain Insurance.
In the event Developer fails to keep in effect any of the insurance as required under this Section
20, and the failure continues for 15 days following receipt by Developer from City of notice of
the failure, City may, at its sole option, obtain the insurance, and the reasonable premium or
other reasonable expenses incurred until Developer provides evidence of insurance will be due
immediately upon Developer's receipt of City's invoice.
I. Assi.
Any assignment of Developer's responsibilities under this Agreement will require the assignee
comply with these insurance requirements.
21. INDEMNIFICATION BY DEVELOPER.
A. Developer's Indemnification Obli at ions.
Developer will fully INDEMNIFY, DEFEND and HOLD HARMLESS City and its elected
officials, employees, the Mayor, council members, representatives and agents (the"Indemnified
Parties") from and against any and all costs, claims, liens, damages, losses, expenses, fees, fines,
penalties,proceedings, actions, demands, causes of action, liability and lawsuits, bodily injury or
death of persons and property damage, resulting from or related to (i) Developer's negligence,
willful misconduct or criminal conduct for activities undertaken pursuant to this Agreement and
thereafter, including any such acts or omissions of Developer, Developer's Related Parties, and
their respective members, managers, agents, officers, representatives, employees, consultants,
sub-consultants, architects, engineers, contractors, subcontractors of any tier and suppliers of any
tier while in the exercise or performance of their rights or duties under this Agreement and
thereafter. The provisions of this indemnification obligation are solely for the benefit of the
Indemnified Parties and not intended to create or grant any rights, contractual or otherwise, to
any person or entity. Developer, as appropriate, will promptly advise City in writing of any claim
or demand against the Indemnified Parties related to or arising out of Developer's activities
under this Agreement and thereafter and will complete the investigation and defense of such
claim or demand at Developer's cost to the extent required in this section. City will have the
right, at its option and expense, to participate in such defense with attorneys of its choice,
without relieving Developer of any of its obligations under this Section. Notwithstanding
anything contained herein, Developer will be under no obligation to defend, indemnify, or hold
harmless City from any claims, liabilities, causes of action,judgments, costs or expenses of any
kind, if such claim, liability, causes of action,judgment, cost or expense arises from or relates to
the negligent, willful misconduct or criminal conduct of the Indemnified Parties.
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B. Citv's Indemnification Obligations.
City will fully INDEMNIFY, DEFEND, and HOLD HARMLESS Developer and its owners,
employees and agents, from and against any and all costs, claims, liens, damages, losses,
expenses, fees, fines,penalties, proceedings, actions, demands, causes of action, liability and
lawsuits, bodily injury or death of persons and property damage, resulting from or related to
City's negligence, willful misconduct or criminal conduct for activities undertaken pursuant to
this Agreement and thereafter, including any such acts or omissions of City, City's elected
officials, employees,the Mayor, council members, representatives and agents. City, as
appropriate, will promptly advise Developer in writing of any claim or demand against
Developer related to or arising out of City's activities under this Agreement and thereafter and
will complete the investigation and defense of such claim or demand at City's cost to the extent
required by this section. Notwithstanding anything contained herein, City will be under no
obligation to defend, indemnify, or hold harmless Developer from any claims, liabilities, causes
of action,judgments, costs or expenses of any kind, if such claim, liability, causes of action,
judgment, cost or expense arises from or relates to the negligent, willful misconduct or criminal
conduct of Developer.
22. DEFAULT; REMEDIES; TERMINATION.
A. General Provisions.
Subject to extensions of time by mutual consent in writing, failure or unreasonable delay by
either Party to perform any term or provision of this Agreement will constitute a default. In the
event of default or breach of any terms or conditions of this Agreement, the Party alleging such
default or breach will give the other Party not less than thirty (30) days' notice in writing
specifying the nature of the alleged default and the manner in which said default may be
satisfactorily cured. During any such thirty (30) day period,the Party alleged to be in default
will not be considered in default for purposes of termination of this Agreement or the institution
of legal proceedings.
After notice and expiration of the thirty (30) day period, if such default has not been cured or is
not being diligently cured in the manner set forth in the notice, the other Party to this Agreement
may at its option:
1. Terminate this Agreement; and/or
2. Institute legal or equitable action to cure, correct or remedy any default, including
but not limited to an action for specific performance of the terms of this
Agreement;
B. Developer's Default; Enforcement.
In the event of a material default on the part of Developer, no building permit will be issued or
on other approvals granted, for any structure to be reconstructed or constructed on the Property
pursuant to this Agreement, unless such default is cured. Developer will cause to be placed in
Development Agreement
21
any covenants, conditions and restrictions applicable to the Property, or in any ground lease or
conveyance of the Property,the express provision the provisions of this Agreement must be
performed by any such lessee or grantee.
C. Enforced Delay, Extension of Times of Performance.
If either Party is rendered unable wholly or in part by Force Majeure Event (as defined below)to
carry out its obligations under this Agreement, such Party must notify the other Party of the
existence and cause of the Force Majeure Event. The obligations of such Party under this
Agreement that are affected by such Force Majeure Event, only so far as they are affected by
such Force Majeure Event, will be suspended during the continuance of the Force Majeure Event
and the affected Party must use its commercially reasonable efforts to remedy the cause of such
Force Majeure Event in a reasonably timely manner; provided, however, the milestone dates set
forth in Section 2 of this Agreement will not be extended due to any Force Majeure Event, unless
mutually agreed upon in writing by the Parties. If a Force Majeure Event extends for a period of
one hundred and twenty(120) days or more, then the other Party will have the right, in its sole
discretion, to terminate this Agreement upon written notice to the other Party. It is understood
and agreed the settlement of strikes or lockouts will be entirely within the discretion of the
affected Party and the foregoing requirement that any Force Majeure Event must be remedied
with all reasonable dispatch will not require the settlement of strikes or lockouts by acceding to
the demands of the opposing party when such course is inadvisable at the discretion of the
affected Party.
For the purposes of this Agreement, the term "Force Maieure Event"means any event or
circumstance that is outside the reasonable control of a Party, such acts of God, epidemics
subject to the provisions set forth below), landslides, mudslides, explosions, fires, storms,
hurricanes,tornados, high-water washouts, lightning, earthquakes, severe or unusual weather
conditions, floods or similar cataclysmic event, infectious cow diseases of a contagious nature,
acts (or failure to act) of governmental authorities, acts of public enemy, wars, armed conflict,
blockades, civil disturbance or insurrections, riots, acts or threats of terrorism, sabotage,
lockouts, strikes or other labor issues/difficulties or industrial disturbances (suffered by a Party),
governmental actions such as the enactment of statutes, laws or regulations frustrating the
purpose of this Agreement or the Project, ,pandemics, changes in law, failure to obtain or
changes in authorizations or permits, interruptions in supply of any utilities, emergencies at the
Project, and any other cause or causes, whether of the kind herein enumerated or otherwise, not
within the reasonable control of such Party.
D. Third Part, a.
In the event litigation is initiated by any third party that challenges any of the approvals for the
Project and an injunction or temporary restraining order is not issued, Developer may submit to
City a written request to have the term of this Agreement suspended during the pendency of said
litigation. The suspension will commence upon approval by City of the suspension of this
Agreement. The suspension will terminate upon the earliest date on which either a final order is
issued upholding the challenged approvals or the litigation is dismissed with prejudice by or
against all plaintiffs. In the event a court enjoins either City or Developer from taking actions
Development Agreement
22
with regard to the Project as a result of such litigation that would preclude either Party from
enjoying the benefits provided by this Agreement, then the deadline for any approval provided
for under this Agreement will be automatically suspended during the period of time such
injunction or restraining order is in effect.
E. Attorne. 'Y s Fees.
If a Party becomes in default of its obligations under this Agreement,the other Party will be
entitled to recover its attorneys' fees incurred due to the default and enforcement of remedies
hereunder and under applicable law.
23. DEFAULT-REVERSION.
A. Developer's Termination Costs.
In no event will City be responsible for paying Developer's Termination Costs, as defined in this
Section 23.A. If the results of Developer's due diligence activities are not acceptable to
Developer, in Developer's sole discretion, and Developer elects to not proceed with Phase 2
and/or Phase 3, and instead decides to terminate this Agreement during the Armory Due
Diligence Period or with respect to Phase 3, the Hotel Due Diligence Period,then Developer's
Termination Costs, defined below, will be solely Developer's cost with no contribution by City.
Termination Costs" include all of Developer's costs and expenses in completing its due
diligence activities, and Developer's attorneys' fees in the negotiation of this Agreement, in
completing due diligence activities and in terminating this Agreement for any reason other than
City's default.
B. Citv's Reacquisition Rights.
If, after transfer of the Armory Property, or any portion thereof, by City to Developer,there is a
material default or the Armory portion of the Project is not completed for any reason and such
default or failure continues after a reasonable period for Developer to cure the default, City may,
but is not obligated to, elect to acquire from Developer the Armory Property. If, after transfer of
the Hotel Property, or any portion thereof, by City to Developer,there is a material default or the
Hotel portion of the Project is not completed for any reason and such default or failure continues
after a reasonable period for Developer to cure the default, City may, but is not obligated to, elect
to acquire from Developer the Hotel Property. As applicable, City will have the right to
reacquire from Developer the Armory Property or Hotel Property, or any portion thereof, without
compensation to Developer. The reacquisition will be subject to the rights of any mortgage,
security interest, mechanic's lien, ta c lien or judgment lienholder. City's right to reacquire the
Armory Property will expire upon the substantial completion of Phase 2. The City's right to
reaquire the Hotel Property, will expire upon the issuance of an occupancy permit for the Hotel.
Development Agreement
23
C. City's Reacquisition Costs.
In the event City elects to exercise its right to reacquire from Developer the Property, or any
portion thereof, Developer will be required to pay the following expenses (the "Reacquisition
Costs"):
i. All costs required to remove mechanics' liens, t liens and judgement liens,
exclusive of any judgments of foreclosure upon a mortgage or security interest.
ii. All costs required for City to reacquire the Property, or any portion thereof,
including, but not limited to, closing costs, title search and premium fees, and
filing fees for recording the deed and satisfactions of liens to the extent removed.
iii. City's attorneys' fees incurred in pursuing and completing the reacquisition of the
Property, or a portion thereof.
D. Instruments of Service; Indemnity.
As between Developer and City during the Armory Due Diligence Period, Developer is
and will remain the sole and exclusive owner of all construction plans, studies, surveys,
models, sketches, drawings, specifications and other similar materials (the "Instruments
of Service") in connection with the Armory portion of the Project. City may not, for any
reason, use, alter, copy, maintain, or otherwise modify the Instruments of Service. In the
event City desires to purchase the Instruments of Service from Developer, Developer will
be entitled to payment from City for the value of the Instruments of Service. In the event
City re-acquires the Property, City will have a limited, irrevocable, and non-exclusive
license to use the Instruments of Service solely and exclusively for the purposes of
construction, using, maintaining, altering and adding to the Armory portion of the
Project. Developer will in its agreement with the architect include this provision.
As between Developer and City during the Hotel Due Diligence Period, Developer is and
will remain the sole and exclusive owner of all construction plans, studies, surveys,
models, sketches, drawings, specifications and other similar materials (the "Instruments
of Service") in connection with the Hotel portion of the Project. City may not, for any
reason, use, alter, copy, maintain, or otherwise modify the Instruments of Service. In the
event City desires to purchase the Instruments of Service from Developer, Developer will
be entitled to payment from City for the value of the Instruments of Service. In the event
City re-acquires the Property, City will have a limited, irrevocable, and non-exclusive
license to use the Instruments of Service solely and exclusively for the purposes of
construction, using, maintaining, altering and adding to the Hotel portion of the Project.
Developer will in its agreement with the architect include this provision.
However, In the event City alters the Instruments of Service without the author's written
authorization or uses the Instruments of Service for any other project without retaining
the authors of the Instruments of Service, City releases Developer, any Related Party and
any other person or entity providing services or work for any of them, from all claims and
causes of action arising from or related to such uses. City,to the extent permitted by law,
Development Agreement
24
further agrees to defend, indemnify, and hold harmless Developer, any Related Party and
any other person or entity providing services or work for any of them, from all costs and
expenses, including the cost of defense, related to claims and causes of action asserted by
any third person or entity to the extent such costs and expenses arise from City's
alteration or use of the Instruments of Service.
24. EFFECTIVE DATE; TERM OF THIS AGREEMENT.
A. Impact of Termination.
The effective date of this Agreement will be the date of execution of this Agreement by City.
The term of this Agreement will commence upon the effective date and will be in effect until
certificates of occupancy are issued by City for the Armory Building, Hotel and Parking Ramp,
unless the same is terminated, modified or extended by circumstances set forth in this Agreement
or by mutual consent of the Parties. Following the expiration of the term,this Agreement will be
deemed terminated and of no further force and effect, except for the provisions of Sections 3, 21,
22, 23, 28 and 32.
25. EARLY TERMINATION.
A. Termination Ri.
This Agreement will become null and void upon either of the following occurrences:
a. Mutual consent of both parties.
b. Prior to the expiration of the Due Diligence Period Developer has given to City
written notice Developer has terminated this Agreement.
26. GOOD FAITH; MUTUAL COOPERATION.
A. Instruments and Actions by Citv.
At any time, and from time-to-time before and after the execution of this Agreement, City
will, at the request of Developer, and without further consideration, promptly execute,
acknowledge and deliver such further instruments, and take such further actions as
Developer may reasonably request in order for Developer to complete Developer's
obligations under this Agreement. However, no such instruments or actions will impose
upon City any burden or obligation which is in excess of any burden or obligation
specifically imposed upon City pursuant to the terms of this Agreement.
Development Agreement
25
B. Instruments and Actions by Developer.
At any time, and from time-to-time before and after the execution of this Agreement,
Developer will, at the request of City, and without further consideration, promptly
execute, acknowledge and deliver such further instruments, and take such further actions
as City may reasonably request in order for City to complete City's obligations under this
Agreement. However, no such instruments or actions will impose upon Developer any
burden or obligation which is in excess of any burden or obligation specifically imposed
upon Developer pursuant to the terms of this Agreement.
27. COVENANTS RUNNING WITH THE LAND.
A. Covenants Are Continuin.
All provisions of this Agreement will be enforceable as equitable servitudes and constitute
covenants running with the land. Each covenant to do, or refrain from doing, some act with
regard to the development of the Property; (a) is for the benefit of and is a burden upon the
Property; (b)runs with the Property and each portion thereof; and (c) is binding upon each Party
and each successor in interest during ownership of the Property or any portion thereof.
28. NOTICES.
A. Notice Requirements.
All notices, requests, demands or other communications required or permitted under this
Agreement must be in writing and delivered either: (i)personally; (ii) by certified or registered
mail, return receipt requested, postage prepaid; (iii) by a recognized overnight courier service
such as Fed Ex); or(iv) by email transmission made during normal business hours with a copy
to follow by registered or certified mail, return receipt requested, postage prepaid or by overnight
courier service, addressed as follows:
City: Paul Briseno
City Manager
City of Brookings
520 Third Street
Brookings, SD 57006
With a copy to: Steve Britzman
521 6th Street, #104
Brookings, SD 57006
Development Agreement
26
Developer: Angela Boersma
President
Linchpin Corporation
414 Main Avenue, Suite 3
Brookings, SD 57006
With a copy to: Tommy Johnson
Boyce Law Firm
300 S. Main Ave
Siou c Falls, SD 57104
29. ENTIRE AGREEMENT.
A. Mer er of Terms.
This Agreement constitutes the entire Agreement between City and Developer. There are no
other covenants, agreements, promises, terms, provisions, conditions, undertakings or
understandings, either oral or written between the Parties concerning the Property, other than
those set forth herein. No subsequent agreement, or any amendments thereto, will be binding
upon City or Developer unless it is in writing and signed by both Parties.
30. AMENDMENTS.
A. Amendment Requirements.
This Agreement may be amended from time to time by mutual consent of the Parties. The
Parties acknowledge refinement and further implementation of the Project may demonstrate that
certain changes may be appropriate with respect to the details and performance of the Parties
under this Agreement. The Parties desire to retain a certain degree of flexibility with respect to
the details of the Project and with respect to those items covered in the general terms of this
Agreement. If and when the Parties find clarifications, changes or minor adjustments are
necessary or appropriate, they will effectuate such clarifications, changes or minor adjustment
through a written amendment approved signed by Developer and City.
31. ASSIGNMENT.
A. Developer May Not Assi n.
Other than is specifically contemplated herein, this Agreement may not be assigned by
Developer to another entity or person without the prior written approval of City, which approval
may not be unreasonably withheld, provided:
Development Agreement
2
i) The assignee has the financial ability to meet the obligations proposed to be assigned
and to undertake and complete the obligations of this Agreement affected by the
assignment; and
ii) The proposed assignee has adequate experience with commercial developments of
comparable scope and complexity for the portion of the Project that is the subject of
the assignment.
iii) The assignee assumes all of Developer's obligations under this Agreement, and
Developer will remain liable for all obligations under this Agreement.
B. Assi nment to Related Partv.
Developer may assign this Agreement, or any part of this Agreement, to a Related Entity without
City's consent. However, Developer will remain liable for all obligations under this Agreement,
unless city, in its sole discretion,permits Developer to be released from any or all obligations
under this Agreement.
32. LAW GOVERNING.
A. Law and Venue.
This Agreement will be governed by and construed in accordance with the laws of the state of
South Dakota. Venue with respect to any litigation related to this Agreement will be in Circuit
Court, Third Judicial Circuit, Brookings County, South Dakota.
33. BINDING EFFECT.
A. Persons Bound.
All provisions of this Agreement are hereby made binding upon personal representatives, heirs,
successors, and assigns of the Parties.
IN WITNESS THERETO, the Parties have executed this Agreement as of the effective date.
Signature pages follow}
Development Agreement
28
CITY:
CITY OF BROOKINGS, SOUTH DAKOTA
By:="Gl/`
A S;: Keith Corbett, Mayor
s .",e
is
Bonm; :g ter, City Clerk
STATE OF SOUTH DAKOTA
SS.
COUNTY OF BROOKINGS
On this day of'o`' ,2020,before me,the undersigned
P
officer,personally appeared Keith Corbett, Mayor of the City of Brookings,known to me to be the
person(s)whose name(s)is/are subscribed to the above and foregoing instrument,and acknowledge
to me that she/he executed the same for the purpose therein contained
N Y PUBLIC
My Commission expires --/—,7 a
s
QC! FC ST R
sa-r a c.rat_
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SOt1TH DA}CU7A ''
W,`7ia'Lt'h s l 94l".A ST9ti++J°Dm:'
Development Agreement
29
DEVELOPER:
LINCHPIN CORPORATION
B
Ang oers a
Its President
STATE OF SOUTH DAKOTA
SS.
COUNTY OF BROOKINGS
On this 10 tG26 day of 2020,before me,the undersigned
officer,personally appeared Angela Boersma,President of Linchpin Corporation,known to me to
be the person(s)whose name(s)is/are subscribed to the above and foregoing instrument, and
acknowledge to me that she/he executed the same for the purpose ther c t '
NOTA Y PUBLIC
v. '_•. , ' =.
My Commission expires Z(l d Z5
n
ti..i .
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i. • • .,•
ii, C,A`,.
Development Agreement
30
EXHIBIT A
TIF Policy
Development Agreement
31
Guidelines for the Use of
Tax Increment Finance
City of Brookings, South Dakota-
Adopted by the City Council: January 13, 2009
Guidelines for the Use of
Tax Increment Finance
City of Brookings, South Dakota-
Purpose of these Guidelines:
These guidelines are established to outline the City's position governing the intended use of
tax increment financing('ITF as an economic development tool for development. These
guidelines operate within the parameters of SDCL 11-9 as amended;and shall be used as a
procedural framework for considering applications for its use. The fundamental purpose of
tax increment financing in Brookings is to encourage desirable development or
redevelopment that would not othenvise occur butfor the assistance provided through TIF.
It shall further be the intent of TIF use to be for the shortest duration possible to achieve
the City's desired results for the specific project. The City xeserves the right to approve or
reject projects on a case-by-case basis,taking into consideration established policies,project
criteria,e cisting ordinances,and demand on city services in relation to the potential benefits
from the pxoject. Meeting the criteria does not guarantee the award of'ITF to the project.
Approval or denial of one project is not intended to set precedent for approval or denial of
another project. Each project is unique and must stand on its own merits.
Section I: Objectives governing the use of TIF
The Ciry will consider using TIF to assist private and public development projects provided
Item (8) in this Section and one additional of the following public purpose objectives are
satisfied.
1) To retain local jobs and/or increase the number and diversity of jobs that offer
stable employment and/or attractive wages and benefits. These jobs should be at
the level sufficient to being considered a living wage/head-of-household income,and
be considered primary jobs.
2) To encourage the redevelopment of deteriorated, contaminated,designated
brownfield",or otherwise blighted real property through the investment of TIF
funding;to result in an appreciably higher level of quality redevelopment and private
reinvestment.
3) To stimulate economic development in Brookings by assisting projects that promote
the long term economic vitality of the community;and contributes to the fulfillment
of the City's development or redevelopment objectives.
4) To stimulate increased private investment in areas that would have otherwise
remained undeveloped or under-developed and which will,in the long term,provide
a significant source of additional tax revenues to all ta ring jurisdictions.
5) To encourage additional unsubsidized private development in the area, either direcdy
or indirectly through "spin-off'development.
6) To stimulate the construction of safe and affordable housing units for lo v and
moderate income residents and expand the general housing stock. ('The latest
available housing plan/survey, and information from South Dakota Housing
Development Authoriry should be used as the primary guideline for determining
affordabiliry levels.)
7) To offset increased costs of redevelopment over and above the costs normally
incurred in development.
8) To facilitate the development process and to achieve development on sites which
would not otherwise be developed BUT FOR the use of TIF. Use of TIF shall be
considered a financing means of last resort as determined by the City Council.
9) To support and assist in the implementation of the City's Comprehensive Plan.
10) To broaden and expand the tax base to the benefit of all ta ng jurisdictions.
11) To support redevelopment efforts that enhance and preserve unique uxban features
including but not limited to the downtown central business district,historic districts,
entryway features and amenities, and public assembly areas.
12) To the extent permitted by law, tax increment proceeds may be used to finance
eligible city-owned projects and improvements within the district as deemed
necessaty by the City Council.
Section II: Genetal guidelines governing the use of TIF
1) The City of Brookings will comply with all requirements of SDCL 11-9 as
amended. The City will undertake a comprehensive analysis to ensure the
proposed project satisfies the `BUT FOR"criteria. The project must
demonstrate to the satisfaction of the Ciry CouncIl,that it is not economically
feasible without the use of TIF.
2) The Ciry of Brookings will use tax increment financing only when a clearly
identified city development objecrive is served and only to the degree necessary
to accomplish that development objective.
3) Tax increment fmancing will only be used in cases where the City has the
financial capaciry to provide the needed public assistance, the Council deems it
fiscally prudent to provide such assistance, and the developer can clearly
demonstrate the development will be able to meet it's financial and public
purpose obligation.
4) The financing method of TIF districts shall be a `pay-a.ryougo"method whereby
the applicant fronts the costs and will be reimbursed by the City over time as
increment becomes available. The developer shall be considered the borrower
under`pay-as-you-go"and the City shall not be liable for debt. As an alternative,
the Ciry Council may consider the issuance of bonded indebtedness through tax
increment bonds only when unique circumstances determine "pay-as-you-go"is
not feasible.
5) As a condition of using TIF,applicants agree to waive their right to use the
discretionary formula. The discretionary formula provides a financial incentive
in addition to the use of tax increment. Using the discretionary formula lessens
the availability of increment needed to finance the project.
6) Only those public impxovements and redevelopment costs direcdy associated
with,or needed to service the proposed development plan or project,should be
financed through tax increment proceeds.
7) The amount of incxement remitted to the developex shall not exceed the amount
in the approved project plan as adopted by the City Council;and shall be only
foY the lesser of either actual or budgeted expenditures in the approved plan.
8) The duration of the tax increment district shall be determined in the approved
project plan as adopted by the City and shall terminate at such time as the
sufficient increment has been generated pursuant to the approved project plan.
In the event sufficient increment has not been generated by the time of the
scheduled decertification of the district,the developer shall be responsible for
any shortfall.
9) Tax increment expenditures shall only be made for items direcdy related to,and
ancillary to,a bona fide public purpose or public benefit as determined
exclusively by the City Council.
10) The City shall advertise for competitive bids for construction of the project,shall
hold the construction contract,and shall make payments to the contractor with
reimbursements from the applicant for pay-a.ryougo projects,or from the bond
fund for bonded indebtedness funds. The Ciry shall not make any payments to
the contractor until the applicant has made sufficient deposits to the City to
cover the contractor payments for pay-a.ryougo projects.
11) All development proposals should seek to maximize the amount of private
investment per dollar of public assistance. Public assistance as a percentage of
total development costs will be determined for each project as part of the review
and compared to other development projects or subprojects of similar scope and
magnitude whenever possible.
12) The City may,on a case-by-case basis, establish public purpose requirements
specific to an application that must be met for the project. Such requirements
shall be described in the project plan,development agreement,or other binding
document between the City and the applicant,which may be in addition to the
scope of applicable ciry ordinances or policies. Such items which may be
included and if included would require performance by the Applicant may
include but are not limited to: prescribed valuation of a home or building,
acreage or building sizes,wages,number of jobs created/retained,building
materials affecting appearance,landscaping,signage,property valuation increases,
sales tax generating capacity, historic preservation, environmental unprovements,
transportation improvements,blight remediation,parking unprovements,etc.
13) Applicant shall demonstrate to the satisfaction of the Ciry that sufficient market
demand e sts for the proposed project. TIF shall not be used to support
speculative projects.
14) Applicant must provide adequate financial guarantees to constitute a minimum
of 10 percent equity investment cash infusion by Applicant into the overall
project. Private lender fmancing and TIF shall not be counted toward the 10
percent equity requirement.
15) Applicant must provide adequate financial and legal guarantees to ensure
completion of the project,including,but not limited to letters of credit,
performance bonds,and personal guarantees.
16) For the purposes of underwriting the proposal,the applicant shall provide any
requested market, financial, environmental, or other data pertaining to the
proposed TIF project requested by the City or its consultants.
17) The project must be consistent with the City's Comprehensive Plan,Zoning
Ordinances,Subdivision Regulations,Land Use Plan,and any other duly-adopted
master plans affected by the use of Tax Increment Financing.
18) The applicant shall adequately demonstrate,to the City's sole satisfaction,an
abiliry to complete the proposed project based on past development experience,
general reputation,and credit history,among other factors,including the size and
scope of the project.
19) The City may reject the use of TIF if it determines the project would place an
extraordinary demand on city services or if the project that would have
significant detrimental impacts on the health, safety, or general welfare of the
community.
20) The City may consider amendments to either the district boundaries after a
district is certified,or to the previously-adopted project plan. Amendments may
be necessary to accommodate changes to desired public purpose outcomes.
21) The final interest rate and terms on the TIF Note shall be determined by the Ciry
Council and incorporated into the Development Agreement.
Section III: Economic Analysis and Risk Assessment Process
1) Proposed uses of tax increment will be subject to rigorous economic analysis and
risk assessment. This analysis will be conducted by the TIF Review Staff Team
through their review process. The analysis may include review and assessment
by consultants. (The TIF Review Staff Team shall consist of: Ciry Manager (or
designee),City Finance Officer,City Engineer,Community Development
Dixector,Planning/Zoning Administrator,BEDC Economic Development
Director.)
2) The analysis and assessment of all proposed uses of tax increment will address
the following questions as part of the standard format for reports to the City
Council.
i. What is the public purpose of the financial assistance for this project?
ii. Why is there a financial need for public investment and/or subsidy?
iii. What is the total cost of the project?
iv. What is the appropriate level of public participation?
v. What are the risks associated with the project?
vi. What are the alternative plans for managing the risk?
vii. How does the proposed project finance plan compare with
previously approved comparable projects?
viii. What is the project's impact on other publicly financed projects?
3) The results of the Economic Analysis and Risk Assessment will be presented to
the City Planning Commission and City Council at a time consistent with the
schedule provided in Section V. The report shall identify any elements of the
proposed project that are not in conformance with this policy.
4) Applicants shall pay a TIF application fee as determined by City resolution as a
means of cost recovery for time and resources involved with approval of a TIF
project. The fee shall be due and payable as part of the application process in
Section V,Step 3. The process outlined in Section V shall not proceed until this
amount has been paid in full. Applicants shall pay the fees associated with the
Bond Counsel and Financial Advisor who shall be xetained by the City for review
of the TIF project. Applicants shall pay direct costs associated with processing
the TIF application including but not limited to postage,hearing notices,surveys,
platting,engineering,copying,legal fees, appraisals,recording fees,etc. Such
costs shall not be the responsibiliry of the City.
5) The City may require periodic reports on the financial and developmental
performance of the TIF district during the term of the district.
Secrion IV: Eligible costs of tax increment revenue
The City reserves the right to further restrict eligible costs as enumerated in state law in this
section as well as for each TIF project. Private buildings, structures,utilities or other
private-use improvements are not eligible for TIF assistance. Development costs that are
eligible for reimbursement with tax increment revenues are listed below.
Property acquisition
Elimination of slum and blighted conditions on property/land clearance
Soils corrections
Site preparation/clearing and grading of land
Removal of hazardous wastes or remediation of site contamination
Construcrion of capital public improvements such as:
Streets Curb and gutter
Storm drainage utilities/ponds Wastewater utilities
Water utilities Sidewalks/trails/pathways
Landscaping improvements Signage&traffic controls
Lighting Public parking lots
OYganizational costs
Capitalized interest/finance charges
Professional service costs
Imputed adininistrative costs
Relocation costs
Other costs permitted by state law as may be prescribed in the TIF project plan.
Section V: Tax Increment Finance application and approval process
Each step must be approved before the project can move to the next step. The project shall
be terminated for failure to meet the requirements of each step unless each step is
satisfactorily completed or the step is modified to the satisfaction of the Ciry in order to
advance to the next step.
1) Applicant submits pre-application for TIF project to Community Development
Director. (Attachment 1)
2) City Council reviews pre-application to assess viabiliry/feasibiliry of project.
3) Applicant submits full application,including application fee,to Community
Development Director. (Attachment 2)
4) TIF Review Team undertakes review of the application and project.
5) Project Plan is written by Review Team,Bond Counsel,&Financial Advisor.
6) Norices of a Public Hearing before Planning Coininission are distributed.
7) Planning Commission holds public hearing; approves the district boundaries and
project plan.
8) TIF Review Team develops Development Agreement.
9) City Council approves district boundaries and Project Plan.
10) Ciry Engineer and Community Development Director give final approval of
development plans.
11) Ciry Council approves Development Agreement.
12) City advertises for bidders for the construction of the project.
13) City staff holds bid opening, Ciry Council awards contract for construcrion.
14) City Engineer gives contractor notice to proceed with construction.
15) Ciry forwards appropriate records to Dept. of Revenue and Counry Officers.
16) Review/evaluation of project performance. (Attachment 3)
NOTE: In the event the TIF Review Team rejects the project in Step 4, the applicant may
appeal to the City Council. The TIF Review Team shall provide the applicant a list of
deficiencies as justification for any rejection of the project.
Attachment 1: Pre-application
Tax Increment Finance Policy
Ciry of Brookings, South Dakota-
Department of Community Development
Applicant Name and Address: Date:
Proposed project location: (Address,legal description)Attach a map
Current zoning: Zoning Change to accommodate proposed project:
Project Description:
Improvements to be financed by TIF:
Estimated cost of total project and TIF-eligible expenses:
Current status of development: (platted, zoned,engineered,designed, etc.)
FOR CI'I'Y USE ONLY-----------------------------------
Staff Review Comments:
Recommend to go to City Council for Section V;Step 2: _YES _NO
If NO,what are the deficiencies?
Community Development Director:Date:
APPLICATION FOR TAX INCREMENT FINANCING
Community Development Department
520 Third Street,Suite 140
Brookings,SD 57006 rOO ln S
Phone: (605)692-6629 Fax: (605)697-8624 s o u T H D A K O T A
www.c itvof b roo k i n s.o r
APPLICANT
Name Phone
Address Email
City,State,Zip
APPLICANT'S LEGAL COUNSEL
Name Phone
Address Email
City,State,Zip
APPLICANT'S ARCHITECT/ENGINEER
Name Phone
Address Email
City,State,Zip
Property Owner Signature Date Property Owner Signature Date
Applicant Signature Date Applicant Signature Date
if different from Property Owner) if different from Property Owner)
Print Name Print Name
Title* Title:
required for Corporetion,Partnerships,Etc. required for Corporetions,Partnerships,Etc.
Project Address:
Project legal Description:
Current Use: Current Zoning:
Proposed Use:
Current Annual Real Estate Taxes( tax vear): $
Current Assessed Tax Valuation( tax vear): Land: $
Buildings: $
Total Project Cost: $
TIF Request: $
Tax Increment Financing Application Checklist
An application for the use of Tax Increment Financing must include the following information. Submitted
1. A detailed project description.
2. Purpose of the Tax Increment Financing.
3. List of project costs to be funded by the Tax Increment Financing,including but not limited to land
acquisition,building acquisition,site development,construction,equipment,architectural&
engineering fees,legal fees,bond fees,developer fees.contingencies,other.
4. Financing plan to include sources of funds,use of funds,identification of equity investment,
lender,interest rates,financing costs and loan terms.
5. The applicant shall identify all persons and entities that have an interest in the project and/or in
the entity applying for the tax increment financing district. The disclosures shall require
identification of all members of an LLC or LLP,other partners,investors,shareholders and directors
of a corporation or any other person who has a financial interest in the project or in the entity
applying for the tax increment financing. This provision requires identification of all persons who
have an interest in the project,including those whose interest exists through,an LLC,LLP,
corporation or other legal entity. The applicant shall be under a continuing obligation to update
this disclosure within thirty(30)days of any changes throughout the application process and
throughout the life of the developer's agreement. If the applicant is a publicly traded company,
the applicant shall be deemed to have complied with this provision if it has provided the City a
copy of its most recent annual report with the application.
6. A pro forma indicating project revenues and expenses.
7. A statement and demonstration that the project would not proceed without the use of Tax
Increment Financing(BUT FOR).
8. Conceptual plans,sketches,maps,site plans or elevations for the project.
9. A development time schedule including specific phasing of improvements and project costs.
10. A list of the specific public improvements and a list of the specific private improvements proposed
to be constructed along with the project.
11. Corporation,LLC,partnership papers or other business documents identifying the parties with
ownership interest in the corporation and property involved in the project,including land
ownership,contract for deed or other contractual information relating to control of the property
and the applicant's ability to complete the project.
12. A financial statement of the corporation,partnership,or individual for the most recent five years
or life of the company.
13. A copy of the proposed wage scale,employee benefits package,and full and part-time
employment levels or,in the case of an affordable housing project,a copy of the applicable state
of federal housing program.
14. A copy of the market/feasibility study,absorption study,or any environmental study applicable to
the project and/or site.
15. Provide documentation of previous development experience. If previous experience includes use
of Tax Increment Financing,provide city/county in which project occurred.
16. Other information that may be required by the Tax Increment Financing Review Staff Team.
17. A$1,000 non-refundable application fee.
Tax Increment Financing Application Checklist
An application for the use of Tax Increment Financing must include the foliowing information. Submitted
1. A detailed project description.
2. Purpose of the Tax Increment Financing.
3. List of ro'ect costs to be funded b the Tax Increment Financin inPJ cludin but not limited to landYg, 6
acquisition,building acquisition,site development,construction,equipment,architectural&
engineering fees,legal fees,bond fees,developer fees.contingencies,other.
4. Financing plan to include sources of funds,use of funds,identification of equity investment,
lender,interest rates,financing costs and loan terms.
5. The applicant shall identify all persons and entities that have an interest in the project and/or in
the entity applying for the tax increment financing district. The disclosures shall require
identification of all members of an LLC or LLP,other partners,investors,shareholders and directors
of a corporation or any other person who has a financial interest in the project or in the entity
applying for the tax increment financing. This provision requires identification of all persons who
have an interest in the project,including those whose interest exists through,an LLC,LLP,
corporation or other legal entity. The applicant shall be under a continuing obligation to update
this disclosure within thirty(30)days of any changes throughout the application process and
throughout the life of the developer's agreement. If the applicant is a publicly traded company,
the applicant shall be deemed to have complied with this provision if it has provided the City a
copy of its most recent annual report with the application.
6. A pro forma indicating project revenues and expenses.
7. A statement and demonstration that the project would not proceed without the use of Tax
Increment Financing(BUT FOR).
8. Conceptual plans,sketches,maps,site plans or elevations for the project.
9. A development time schedule including specific phasing of improvements and project costs.
10. A list of the specific public improvements and a list of the specific private improvements proposed
to be constructed along with the project.
11. Corporation,LIC, partnership papers or other business documents identifying the parties with
ownership interest in the corporation and property involved in the project,including land
ownership,contract for deed or other contractual information relating to control of the property
and the applicant's ability to complete the project.
12. A financial statement of the corporation,partnership,or individual for the most recent five years
or life of the company.
13. A copy of the proposed wage scale,employee benefits package,and full and part-time
employment levels or,in the case of an affordable housing project,a copy of the applicable state
of federal housing program.
14. A copy of the market/feasibility study,absorption study,or any environmental study applicable to
the project and/or site.
15. Provide documentation of previous development experience. If previous experience includes use
of Tax Increment Financing,provide city/county in which project occurred.
16. Other information that may be required by the Tax Increment Financing Review Staff Team.
17. A$1,000 non-refundable application fee.
EXHIBIT B
Design Plans
Development Agreeme t
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City of Brookings
Staff Report
Brookings City & County
Government Center, 520
Third Street
Brookings, SD 57006
(605) 692-6281 phone
(605) 692-6907 fax
File #:ID 21-0391,Version:1
Executive Session, pursuant to SDCL 1-25-2.5, preparing for contract negotiations or negotiating with
employees or employee representatives.
SDCL 1-25-2. Executive or closed meetings--Purposes--Authorization--Violation as misdemeanor.
Executive or closed meetings may be held for the sole purposes of:
1.Discussing the qualifications, competence, performance, character or fitness of any public
officer or employee or prospective public officer or employee. The term, employee, does not
include any independent contractor;
2.Discussing the expulsion, suspension, discipline, assignment of or the educational program of
a student or the eligibility of a student to participate in interscholastic activities provided by the
South Dakota High School Activities Association;
3.Consulting with legal counsel or reviewing communications from legal counsel about proposed
or pending litigation or contractual matters;
4.Preparing for contract negotiations or negotiating with employees or employee
representatives;
5.Discussing marketing or pricing strategies by a board or commission of a business owned by
the state or any of its political subdivisions, when public discussion may be harmful to the
competitive position of the business; or
6.Discussing information listed in subdivisions 1-27-1.5(8) and 1-27-1.5(17).
However, any official action concerning such matters shall be made at an open official meeting. An
executive or closed meeting shall be held only upon a majority vote of the members of the public
body present and voting, and discussion during the closed meeting is restricted to the purpose
specified in the closure motion. Nothing in § 1-25-1 or this section prevents an executive or closed
meeting if the federal or state Constitution or the federal or state statutes require or permit it. A
violation of this section is a Class 2 misdemeanor.
Source: SL 1965, ch 269; SL 1980, ch 24, § 10; SL 1987, ch 22, § 1; SL 2014, ch 90, § 2; SL 2019,
ch 2, § 1.
City of Brookings Printed on 8/5/2021Page 1 of 1
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