by Carrie Moritz, Gazette
At the Garretson City Council meeting on Monday, August 9, the council looked at implementing medical marijuana dispensary permitting and fees. As this was a first discussion, no formal actions were taken; however, a second meeting was set for August 30 at 6:30 p.m. at the Legion for the first reading of an ordinance.
South Dakota law has forbidden municipalities from denying all medical marijuana dispensaries within any town or city limits, but is allowing all municipalities to set their own fees for permits and distance requirements from areas such as daycares, parks, and churches.
The Municipal League of South Dakota, however, cautioned towns and cities not to be too restrictive in their ordinances. Statute 34-20G-59 states that "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."
While the cultivation, manufacturing, and testing of cannabis was not discussed at the meeting, it is possible for municipalities to restrict that altogether as long as the ordinance is enacted prior to the law going into effect.
The Minnehaha County Commission is discussing a full prohibition on cultivation, manufacturing, or testing within the county.
However, the council is allowed to set licensing or permit fees, operating hours, and the maximum number of dispensaries.
Council member Karen Stainbrook, a licensed pharmacist, was willing to take the lead on researching the best options for each of these prior to the meeting.
State law will be requiring a distance of 1000 feet from the school, which would put the boundaries to north of City Hall and south of Royce, nearly completely eliminating the downtown area as an option for a dispensary.
Mayor Greg Beaner questioned whether the daycare would be included, and Stainbrook pointed out if they included all school property, it would encompass the football field, pool, and daycare. The daycare is 750 feet from the field.
"If we say not within a thousand feet of the school, this [town] isn't a very big place," council member Bill Hoskins pointed out.
When Mayor Beaner asked if the city should limit the number of dispensaries to one, the council was in full agreement. He also pointed out that South Dakota is likely to ensure dispensaries and pharmacies remain separate, and Stainbrook stated she remembered reading that a dispensary entrance cannot be shared with a place of business that sells alcohol or cigarettes. This information was found by the Gazette within the recommended ordinance wording released by the SD Municipal League but not in the statutes.
With the limited commercial buildings in Garretson available, these two limits nearly eliminate all options a potential dispensary could have within the city unless they were willing to build, which could require re-zoning. The sample ordinance released by the SD Municipal League states home dispensaries and other zoned areas, including mixed use, will not be permitted.
The control over potential business licenses issued helped alleviate concerns the council had about a dispensary, with council member Greg Franka comparing them to adult entertainment stores. The Municipal League of South Dakota's suggested ordinance states, "In the development and execution of these regulations, it is recognized that there are some uses which because of their very nature, are recognized as having serious objectionable operational characteristics." It goes on to point out that special regulation is necessary to prevent blighting of a neighborhood, particularly when several of them are concentrated.
Franka suggested the cost of a business license or permit also could be nearly prohibitively expensive. When council member Stainbrook said the state was recommending a minimum $5,000 licensing fee plus an annual renewal fee, council member Hoskins responded it should be higher.
However, the South Dakota statutes state the fee required for operation must be reasonable.
This fee would help the dispensary be a benefit to the people of Garretson, Hoskins said, also pointing out that Sioux Falls liquor licenses are over $100,000. City Finance Officer Anna Uhl responded that the city is capped at the state level at $1000 for liquor licenses due to the size of the municipality. Hoskins then questioned whether there will be different classes of municipality size at the state level for dispensaries, to which Uhl stated that the question hadn't been answered by the state yet.
"I think you have to be careful with how much you charge; if we don't want it then charge what you want," said council member Dave Bonte.
The council also questioned whether a sales tax would be applied to medical cannabis, since prescriptions from pharmacies are not subject to sales tax. Stainbrook responded that yes, both municipal and state sales tax would apply, even for medical cannabis.
This changed the tenor of several council members, with council member Tom Godbey stating that the influx of tax dollars was changing his mind about having a dispensary within city limits. Bonte agreed, though he still felt the renewal fee should be on the upper end.
"If you charge $10,000 and they go down the road, then you're shooting yourselves in the foot with tax dollars," Godbey said. "Seeing as how you need all the revenue you can get."
As the council moved on to operating hours, Mayor Beaner stated he was in agreement with Stainbrook's suggestion that dispensaries be operated like a business and not a bar, with the City going as far as restricting Sunday and holiday open hours and requiring it close by 10:00 p.m. However, several questions still remained about the restrictions the council could place, and asked Uhl to research prior to the follow-up meeting.
The meeting for the first reading of the ordinance will be held on Monday, August 30 at 6:30 p.m. at the Legion. The public is invited to attend. Further information about the council meeting can be found in the minutes located within this newspaper.
