The Senate majority leader said enacting a regulatory framework for legal cannabis will probably require more than one session of work.
By By: Nick Lowrey, South Dakota News Watch
Entrepreneurs across South Dakota are already taking steps to claim a share of the state’s soon-to-be-legal marijuana market, but legislators and regulators are off to a slow start in crafting laws and rules to govern the controversial new industry.
The sale, possession and use of recreational and medicinal marijuana are set to become legal in South Dakota for the first time on July 1. But when the 2021 South Dakota legislative session started on January 12, only one bill regarding marijuana had been filed.
A group of 15 Republican lawmakers have formed what they call a “Cannabis Caucus” to address marijuana issues this session. But leaders in both the Republican and Democratic parties say discussions on preparing for legalization and regulation of the business of marijuana sales, possession and use—one of the top matters facing the 2021 Legislature—have barely begun.
One high-ranking Senate leader said enacting a regulatory framework for legal marijuana will probably require more than one session of work and will likely spill into the 2022 session or require a special session to complete.
“Not everything will be done at the end of this session,” said Senate Majority Leader Gary Cammack, R-Union Center. “I know there has been talk about the need for a special session.”
Marijuana entrepreneurs, however, are not waiting for the Legislature to act. Many have been working for months to get businesses ready for the July 1 legalization date. The South Dakota Secretary of State’s Office handled 907 more new business filings during the last three months of 2020 than it had during the same period of 2019, many of them related to legal weed.
Exactly how many new business filings are related to marijuana is unknown, as the secretary of state’s office does not require new businesses to indicate a purpose or sales plan, said Jason Luntz, deputy secretary of state.
But as of January 11, a search of public business filings on the secretary of state’s website found more than 40 businesses with the words “cannabis,” “marijuana,” “pot” or “dispensary” in their names. Most of those businesses organized as limited liability companies or registered their business names after voters approved marijuana legalization on November 3, 2020.
Even as a court challenge of the legalization of recreational marijuana remains unresolved, experts say the state needs to move quickly to establish clear rules for growing and selling marijuana commercially. The state will need to license and regulate sales outlets, set up tax collections, define penalties for selling marijuana to minors and make laws related to the marijuana black market, said Kittrick Jeffries, a former marijuana industry compliance officer and founder of a new Rapid City-based cannabis consulting firm called Dakota Cannabis Consulting.
“I think South Dakota has a great opportunity here…but there are some really key things that need to be done before July,” Jeffries said.
If lawmakers and state regulators do not have the framework of a commercial market in place before marijuana becomes legal on July 1, anyone who wants to use cannabis after that date would be pushed to buy from the black market, which could expand and compete with legal, tax-paying retailers, Jeffries said.
Black market competition could weaken South Dakota’s legal marijuana market, leaving local businesses more vulnerable to interstate competition should the federal government choose to legalize marijuana, Jeffries said.
A few legislators have been considering marijuana regulation in the early days of the 2021 session. Rep. Mike Derby, R-Rapid City, is playing a lead role in forming what he calls the “Cannabis Caucus.” Derby said the group’s goal is mostly to share information and help educate other lawmakers as opposed to offering legislation or coordinating votes. Members plan to meet for the first time on January 21 to review bill drafts, Derby said.
One of the big issues Derby plans to work on is providing clarity for local governments. Dozens of marijuana businesses are already preparing to begin commercial marijuana growing operations or are preparing to open retail sales outlets in South Dakota. Municipal governments will need guidance on how to safely zone for often large, indoor marijuana farms needed to supply wholesale and retail outlets, Derby said.
“At the end of the day, we want to respect the will of the people,” Derby said. “We have an opportunity to look at what other states have passed, learn from their best practices, learn from their mistakes and maybe create a better process.”
Rep. Mary Fitzgerald, R-St. Onge, has called for legislation that would make using marijuana in a vehicle and driving while high illegal. South Dakota does not have laws banning marijuana use in vehicles or driving while high because any use or possession of marijuana is still illegal. As of January 13, Fitzgerald had not filed any legislation regarding marijuana use.
The only bill regarding marijuana legalization that had been filed by January 13 came from the Department of Revenue. Senate Bill 35 asks the Legislature to give the department $4 million to cover the costs of regulating the marijuana industry until tax revenue starts coming in. The bill also asks lawmakers to give the state Department of Health about $135,000 to help cover the cost of regulating medical marijuana.
Any recreational marijuana bills that legislators pass could be negated by a lawsuit seeking to declare the recreational marijuana vote result as unconstitutional. Backed by Gov. Kristi Noem (R), the lawsuit was filed by Highway Patrol Superintendent Rick Miller and Pennington County Sheriff Kevin Thom, who argue that the constitutional amendment passed by voters, known as Amendment A, should not have been on the November 3 ballot and is unconstitutional because it was too broad.
A hearing in the case is scheduled for January 27 in Hughes County circuit court, but no trial date has been set. The circuit court’s final ruling and any subsequent appeals to the state Supreme Court likely won’t be settled until well after the 2021 legislative session ends.
Ian Fury, a spokesman for Gov. Noem, said the governor is in discussion with lawmakers about marijuana legalization but has not engaged in filing or pushing any specific legislation so far. “Many legislators have an interest in this topic and we want to give them the opportunity to convey their thoughts and ideas on behalf of their constituents,” Fury wrote in an email to News Watch.
Some lawmakers question whether the Legislature should be involved in regulating recreational marijuana at all.
“My interpretation of Amendment A is that it doesn’t allow the Legislature to do anything,” said Sen. Arthur Rusch, R-Vermillion, vice-chair of the Senate Judiciary Committee.
Amendment A did not provide a regulatory framework for the industrial production or commercial sale of large amounts of cannabis. Instead, the amendment requires the state Department of Revenue to devise licensing and regulatory mechanisms that allow for the sale of recreational marijuana by April 1, 2022. Rusch said he believes Amendment A gave full authority over recreational marijuana regulation to the Department of Revenue.
“That’s one of the reasons I believe [Amendment A] is unconstitutional,” Rusch said.
Still, legislative leaders in both the Republican and Democratic parties acknowledged that a clear majority of South Dakota voters wanted to see marijuana legalized and that the Legislature is obligated to implement legalization measures.
“Our feet are set in concrete. Until the courts rule or voters overturn it in another election, it is our job to move forward with legalization,” Cammack said.
Washington Supreme Court Strikes Down Criminalization Of Drug Possession
Washington State’s felony penalties against drug possession abruptly disappeared on Thursday after the state Supreme Court struck down the law as unconstitutional. As lawmakers decide how to respond to the decision—with a bill to decriminalize all drugs having already passed a legislative committee earlier this month—some police departments and prosecutors have now announced they’ll no longer arrest or pursue cases against people over possession of small amounts.
Simple drug possession “is no longer an arrestable offense,” the Seattle Police Department said in a public statement following the ruling. “Effective immediately, officers will no longer detain nor arrest individuals” merely for having drugs.
The ruling in the case, State v. Blake, applies only to possession of controlled substances. Other state drug laws, such as those against selling or driving under the influence of drugs, are unaffected.
Meanwhile, according to The Associated Press, the Washington Association of Prosecuting Attorneys sent a memo directing its members to drop ongoing drug possession cases and seek orders vacating convictions for past cases.
“While the legislature can change this prospectively (such action is doubtful), police officers must immediately stop making arrests for simple possession of drugs,” an official with the prosecutors group wrote in an email to Seattle police. “No search warrants. No detentions upon suspicion of simple possession awaiting canine units, etc.”
“You will need to advise your officers as to whether officers should still seize the unlawful drugs as contraband or leave them in possession of the individual,” the email continued.
BREAKING: @SeattlePD has been ordered to stop arresting criminals in possession of drugs.
Washington State Superior Court ruled today that arresting those in possession of drugs is ‘unconstitutional.’
This is the start of drug legalization in the state of WA. pic.twitter.com/nrqIOjdRVh
— Katie Daviscourt🇺🇸 (@KatieDaviscourt) February 25, 2021
Pacific County Prosecutor Ben Haslam told The Chinook Observer that the ruling “has come as a shock to our office.”
“On the prosecutor’s office’s end, we are preparing to request the immediate release of individuals being held in custody only for simple-possession cases,” he said. “Next, we will have to quash all active warrants on pending possession cases. Moving forward, I expect we will be required to vacate charges for individuals previously convicted of possession, and I’m sure there will be many other ramifications as well.”
How long Washington’s de facto legalization of drug possession will last is an open question. The court struck down the state’s possession law over a single issue: the statute failed to require proof a defendant knowingly possessed the drugs, allowing people to be convicted without any intention of committing a crime.
In response, lawmakers could simply replace the old law with a new one that includes such a requirement. Or they could not.
The idea of reducing or removing criminal penalties for simple drug possession is growing in popularity, with Oregon voters recently replacing penalties for possession of any drug with a $100 civil fine or referral to a health assessment. A bill introduced in Washington’s legislature earlier this year would make similar changes, removing all penalties for possession of personal-use amounts of drugs and significantly expanding state funding for outreach, treatment and recovery services.
“Today’s Supreme Court decision gives renewed urgency to the conversation about our state’s response to untreated substance use disorder,” the bill’s prime sponsor, Rep. Lauren Davis (D), told Marijuana Moment late Thursday. “It presents an opportunity to continue the discussion that was begun in the legislature this session with HB 1499.”
The court decision accomplishes only part of Davis’s proposal. While one prong of her plan would decriminalize drugs, the other would create a “continuum of care” to ensure access to drug treatment and recovery services—something Thursday’s ruling does not do.
“It is imperative that we stop handing down felony possession convictions that compound shame and create barriers to recovery. We must stop criminalizing symptoms of a treatable brain disease. Today’s decision does that,” Davis said. “But that alone is insufficient. It is equally important that we build out a response to substance use disorder that truly works—a robust and fully funded continuum of care ranging from outreach to treatment to recovery support services.”
King County Prosecuting Attorney Dan Satterberg said lawmakers should act to address the court’s action.
“While there will be a significant amount of work necessary to comply with this ruling in the courthouses throughout the state, it is equally important that the Legislature take steps now to amend this statute to correct the defect found by the Supreme Court,” he said in a statement. “The Legislature should act with a sense of urgency to add the necessary elements to make this statute constitutional this session, and not leave a defective statute on the books.”
Justices on the court weren’t necessarily setting out to legalize drugs when they undertook the case that led to Thursday’s decision. Rather than taking aim at the broader drug war, the ruling says that Washington’s possession law unconstitutionally allowed innocent people to be charged and convicted by failing to require that a defendant knew that drugs were in their possession.
“The possession statute at issue here does far more than regulate drugs,” the court wrote in a majority opinion by Justice Sheryl Gordon McLoud and signed by five of the court’s nine members. “It is unique in the nation in criminalizing entirely innocent, unknowing possession.”
The statute would criminalize a postal carrier who delivers a package containing unprescribed Adderall, the opinion says, as well as a roommate unaware the person they live with has hidden drugs in the common areas of the home.
“A person might pick up the wrong bag at the airport, the wrong jacket at the concert, or even the wrong briefcase at the courthouse,” it continues. “Or a child might carry an adult’s backpack, not knowing that it contains the adult’s illegal drugs.”
The defendant in the case, Shannon Blake, was charged with felony drug possession after police in 2016 found a small bag of methamphetamine in the coin pocket of her jeans. Blake, however, said she didn’t use drugs and was given the secondhand jeans as a gift just two days earlier.
Because Washington’s drug law didn’t require that defendants knowingly had drugs on their person, Blake was charged and convicted.
In rendering its decision Thursday, the Supreme Court vacated Blake’s conviction.
The court’s prior interpretations of the law make the statute “criminalize innocent and passive possession, even by a defendant who does not know, and has no reason to know, that drugs lay hidden within something that they possess. The legislature’s police power goes far, but not that far,” the justices determined. “Accordingly, RCW 69.50.4013(1)—the portion of the simple drug possession statute creating this crime—violates the due process clauses of the state and federal constitutions and is void.”
Not all justices agreed the decision needed to be so sweeping. Justice Debra L. Stephens said in a separate opinion, which concurred in part and dissented in part with the majority, that the court could break from its past holdings and simply reinterpret the law to require proof that defendants knowingly broke the law. She agreed Blake’s conviction should be thrown out but argued the possession law need not be scrapped in its entirety.
“I would overrule our erroneous precedent and, considering the main arguments actually briefed in this case, read an implied intent element into the drug possession statute,” Stephens wrote. “Nearly every other state to have interpreted the model statute holds that it does [have such an element], and Blake urges us to embrace this interpretation.”
Three other justices signed a dissenting opinion, arguing that the court has interpreted Washington’s drug possession law for more than 60 years as not requiring an element of intent—and moreover, that the court’s past decisions have respected the authority of lawmakers to “criminalize conduct regardless of whether the actor intended wrongdoing.”
It’s not entirely clear how many past cases might be affected by Thursday’s ruling. Mark Middaugh, a lawyer who filed a friend-of-brief in the case on behalf of the Washington Association of Criminal Defense lawyers, told the Seattle Times that he believes the ruling could be applied retroactively, allowing anyone with a past conviction for simple drug possession to have that record thrown out.
A press release from the Washington Appellate Project, which represented Blake in the case, was comparatively understated. “Washington joins 49 other states and the federal government,” it said, “in recognizing that the unknowing possession of drugs is not a crime.”
Richard Lechich, a Washington Appellate Project staff attorney who argued the case before the Supreme Court, said justices “correctly recognized the injustice of convicting people for innocent conduct.”
“While the decision cannot rectify the harm this law caused to so many communities, particularly communities of color, it at least puts an end to it,” he said.
Lechich, however, warned Washingtonians to not to take advantage of the situation. While the possession law is off the books, he said, and some in law enforcement seem to be halting arrests and prosecutions, it’s still a risk to openly acknowledge having drugs.
“I would be very careful about that,” Lechich told Marijuana Moment. “Certainly if you were my client, I wouldn’t advise you to do that.”
Photo courtesy of Markus Spiske
Disagreements Threaten Virginia Marijuana Legalization Deal As Deadline Approaches
Conference committee members are divided over a proposed delay in regulatory decisions until next session, but have reportedly settled on delaying legalization of cannabis possession in any case.
By Ned Oliver, Virginia Mercury
With a Saturday deadline approaching, state lawmakers in the House and Senate are still working to resolve differences over landmark legislation that would legalize recreational marijuana in Virginia.
As of Thursday evening, it was unclear whether the two chambers would be able to reach an agreement on the bill, which Gov. Ralph Northam (D) has made a priority in his final year in office.
At least one lawmaker privately doubted the legislation would pass. Others, however, remained optimistic even as they acknowledged negotiations had grown tense, suggesting a vote was possible as early as Friday.
According to five sources familiar with the talks, the primary point of contention is language sought by the Senate that would delay decisions about how the new market is regulated until next year. Members of the chamber said during hearings last month they felt the legislation was too expansive and complex to complete work on during the 45-day session.
Lawmakers in the House have resisted, arguing the delay is unnecessary, citing in-depth studies conducted by legislative analysts and Northam’s administration. House lawmakers have also expressed discomfort about voting to legalize the drug without finalizing plans for a legal marketplace, according to the sources, who spoke on the condition of anonymity to discuss ongoing negotiations.
If a bill does emerge from the conference negotiations, it’s likely to disappoint civil rights advocates who have been pushing for an immediate end to criminal penalties related to the drug.
Both the House and Senate passed legalization bills that wouldn’t allow sales of recreational marijuana to begin until January 1, 2024—time both sides agree they need to set up a new cannabis authority to regulate the industry.
But they have differed over whether criminal penalties related to the drug should stay in place until legal sales begin. The House advanced legislation that wouldn’t end prohibition until 2024 while the Senate proposed legalizing possession of an ounce or less of marijuana beginning July 1 of this year.
The House, whose members worried that repealing criminal penalties before legal sales are permitted would encourage the black market, appear to have won the debate, with Senate negotiators agreeing to maintain existing criminal penalties until 2024, according to the sources.
The approach stands in contrast to a legalization bill signed by New Jersey’s governor on Monday, which immediately ended criminal penalties for possession of up to six ounces even though retail sales aren’t expected to begin until 2022 at the earliest.
Advocates had called the Senate’s position the minimum the legislature could do to address criminal penalties before the retail marketplace opens. Sen. Jennifer McClellan, D-Richmond, who proposed it, said it didn’t make sense to continue prosecuting people for something lawmakers had voted to legalize.
“We can’t risk more people being caught in the system for acting in ways that will soon be legal,” wrote a coalition of 25 advocacy organizations led by the ACLU of Virginia and the reform group Marijuana Justice.
Lawmakers skeptical of repealing criminal penalties before there are legal avenues to buy the drug have said they view the decriminalization legislation they passed last year, which reduced penalties for simple possession to a $25 civil fine, an adequate interim step.
Chelsea Higgs Wise, director of Marijuana Justice, countered that the approach unnecessarily allows the disproportionate enforcement of marijuana laws against Black Virginians to continue for three years. She said court data obtained by advocates shows that even with reduced fines, Black people are four times more likely than White people to face citations despite using the drug at the same rate.
“The commonwealth’s ‘decriminalization’ enforcement maintains Virginia’s racial disparities and goes against Governor Northam’s stated commitment to social equity, racial equity, and economic equity for marijuana legislation,” she wrote in a statement.
The two chambers are continuing to debate another focus for advocacy groups: how to treat people under 21 caught with the drug. As drafted, the Senate’s version would dramatically increase penalties for underage users caught with the drug, increasing the civil penalty for possession from $25 to $250 for people ages 18 to 20. Minors would face a $200 civil penalty for a first offense.
Valerie Slater, the director of RISE for Youth, which advocates for reforming the state’s juvenile justice system, said she favors the House’s approach, which would also increase penalties for underage possession, but only on subsequent offenses.
But she pointed to New Jersey’s new law as a better alternative, which calls for a written warning for a first offense, a call to parents for a second offense and referral to community services for a third offense. Members of the state’s Black Legislative Caucus opposed fines, worrying “police would continue to stop and fine minority youth more frequently than White people under 21,” according to The Star-Ledger.
“At no point should this be a crime for kids,” she said. “Can we just take New Jersey’s language and drop it into ours? It would be ideal.”
Kansas Governor’s Medical Marijuana Bill Introduced As Lawmakers Take Up Separate Legalization Proposal
A bill championed by the governor of Kansas to legalize medical marijuana and use the resulting revenue to expand healthcare was officially introduced on Wednesday. The move comes as lawmakers held back-to-back hearings on separate reform legislation this week.
Gov. Laura Kelly (D) has pushed for legalizing medical cannabis and using that revenue to support Medicaid expansion, and now Rep. Brandon Woodard (D) has filed a measure to do just that. He introduced it in the House Federal & State Affairs Committee, where members heard testimony on the separate legalization bill on Wednesday and Thursday.
“By combining broadly popular, commonsense medical marijuana policy that will generate significant revenue with Medicaid expansion, all logical opposition to expansion is eliminated,” Kelly said at a press briefing on Wednesday. “This bill just makes sense.”
Watch the governor discuss the medical cannabis and Medicare expansion bill, starting around 6:16 in the video below:
“In the face of the worst public health crisis our country has seen in a century, I’m even more committed to delivering healthcare and jobs and support for our hospitals through Medicaid expansion,” she said. “I urge the legislature to take Representative Woodard’s proposal seriously and to also consider the implications if they should fail to pass expansion yet again.”
Under Woodard’s bill, a draft version of which was shared with Marijuana Moment, there would be 21 medical conditions that qualify patients for cannabis—including cancer, multiple sclerosis, post-traumatic stress disorder and chronic or intractable pain—and regulators would be able to add additional conditions later.
— Brandon Woodard (@Woodard4Kansas) February 24, 2021
The secretary of the Kansas Department of Health and Environment would be responsible for developing regulations for the program by July 1, 2023. That includes setting a standard for a 90-day supply of cannabis that a registered patient could possess. It would then be tasked with issuing patient and caregiver registrations and identification cards.
The director of Alcoholic Beverage Control would have its own role in the program, issuing licenses for marijuana “cultivators, laboratories, processors, distributors and retail dispensaries.”
“For too long, the Kansas Legislature has ducked the topic of legalizing medical cannabis. An overwhelming, bipartisan majority of Kansans support medical marijuana, as well as Medicaid expansion,” Woodard told Marijuana Moment. “It’s time to expand healthcare coverage to more than 100,000 Kansans, while giving Kansans the opportunity to use a legal, compassionate therapy to treat a variety of conditions.”
“Whether Kansas chooses the path of legalization of medical, recreational, or something in between, I’m glad that the conversation is finally happening and the people of Kansas are watching,” he said.
While the representative’s bill would make it so Kansas would join the vast majority of states that have legal medical marijuana markets, it is restrictive as far as advocates are concerned. It would, for example, prohibit smoking or vaping cannabis. And it sets a 35 percent THC limit for marijuana flower. Home cultivation by patients would not be allowed.
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The governor first announced a plan at the beginning of the month to enact medical marijuana legalization and use cannabis tax revenue to fund Medicaid expansion. And she said more recently that she wants voters to put pressure on their representatives to get the reform passed.
The Federal & State Affairs panel started debate this week on a separate medical marijuana legalization bill that’s been introduced this session, sponsored by the committee itself. Supporters and opponents of the reform testified on the proposal on Wednesday and Thursday, and advocates anticipate it will get a vote in the next 10 days before heading to the floor.
The first hearing consisted of those who favor the policy change, including a veteran, health care worker and former state lawmaker. The second involved testimony from neutral or opposing parties.
Former state Rep. Willie Dove (R) urged the committee not to “take this for granted.”
“We’re not talking about hippies from the 60s. You’re talking about individuals, law-abiding citizens, that really want to make something happened for their families,” he said. “And I would like to say that the revenue generated from this will be greatly appreciated in Kansas because it does help our bottom line.”
Like the Kelly bill, the committee-sponsored legislation lists 21 conditions that would qualify patients for the program, including chronic pain, HIV and post-traumatic stress disorder. Smoking and vaping products would be prohibited, however. It would also not provide for home growing.
“Veterans of all ages and ideologies are in favor of medical cannabis more than any other demographic,” George Hanna, codirector of Kansas NORML and a veteran, said. “Every veteran’s organization, representing every generation and political perspective, has overwhelmingly come out in support of safe access. I personally have had several physicians, within the VA itself, privately support medical cannabis.”
The opposing testimony on Thursday touched on a variety of talking points—that the scope of the qualifying conditions for medical marijuana is too large, legalization would increase youth access to cannabis, THC concentration levels are too high and ingestion by pregnant women or adolescents is dangerous.
But industry stakeholders with the Kansas Cannabis Business Association (KCBA) told Marijuana Moment that the testimony, particularly from law enforcement representatives, was notably “negligent and dispassionate, with most of their concerns rebutted by [Chairman John Barker (R)] on the spot.”
“Essentially the message was, ‘if 30 other states have found solutions to those problems, you can too,” KCBA’s Erin Montroy said.
A separate medical cannabis legalization bill was introduced by the Senate Commerce Commerce this month, though it has not seen action.
The measure’s language largely reflects legislation that was introduced in the House last year. Patients would be eligible for medical cannabis with a doctor’s recommendation if they have a condition that significantly inhibits their ability to conduct daily activities or if the lack of treatment would pose serious physical or mental harm.
Registered patients would be allowed to grow and possess at least four ounces of marijuana. The bill would also establish a Kansas Medical Cannabis Agency to oversee the program.
Read the draft text of Woodard’s medical cannabis legalization bill that he’s carrying for the governor below: