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South Dakota Senate Approves Marijuana Legalization And Expungements Bills, While House Defeats Tax Measure

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The South Dakota Senate on Wednesday approved bills to legalize and tax marijuana in the state and provide for expungements for low-level cannabis offenses.

These actions follow a Tuesday House vote to defeat a separate measure meant to set up a tax model and other regulations for the market.

These developments also come as activists continue to explore ways to end prohibition legislatively or through the ballot. South Dakota voters already approved legalization during the 2020 election, but the reform was struck down by the state Supreme Court following a challenge from the governor’s office.

The Senate advanced SB 3 in a 18-17 vote. The bill, sponsored by Sen. Michael Rohl (R), cleared the Commerce and Energy Committee last week and will now advance to the House. It would allow adults 21 and older to purchase and possess up to one ounce of cannabis from licensed retailers.

Following the narrow vote, a member made a motion to reconsider, meaning the legislation could have been subject to another that might have reversed its fate—but the lawmaker ultimately did not insist on pressing for a revote.

Under the proposal, home cultivation would not be permitted, however, unlike under a ballot measure that activists have been collecting signatures for.

The state Department of Revenue would be responsible for regulating the adult-use program and promulgate rules related to issues such as transportation and registration.


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Local municipalities would be able to opt out of allowing marijuana businesses within their jurisdiction.

The bill also stipulates that nobody with a felony conviction could hold a cannabis business license—a provision likely to be contested by reform advocates.

A Marijuana Interim Study Committee, headed by legislative leaders, was established last year to explore the issue, and the panel ultimately recommended that the legislature take up legalization this session. This legislation is one of the direct products of that recommendation.

Prior to the vote on that measure, the chamber approved a separate bill, SB 150, which would take affect only if voters approve legalization at the ballot. The licensing provisions of the measure would make it so only existing business that currently hold liquor licenses would be eligible to enter the marijuana market. That would include places like gas stations, grocery stores and bars, according to The Argus Leader.

“While we prefer the framework of SB 3, we were very pleased to see both SB 3 and SB 150 pass the Senate today,” Matthew Schweich, director of South Dakotans for Better Marijuana Laws (SDBML), told Marijuana Moment. “We are now one step closer to reaching a compromise and enacting a legalization law through the Legislature this session.”

 

Another bill to allow for automatic expungements five years after a person’s conviction for a low-level marijuana offenses also passed the Senate on Wednesday.

A Senate bill to create a tax system for a regulated marijuana market was set to be taken up after the legalization and expungement measures, but a member’s request to delay the vote due to the motion to reconsider for SB 3 was approved.

The tax legislation—which would set a 15 percent excise tax on cannabis products—was ultimately taken back up toward the end of the lengthy calendar and passed. Revenue from those taxes would go to a marijuana fund that would be subject to appropriations “through the normal budget process,” the text of the bill states.

Meanwhile, the House rejected a separate bill on Tuesday that would have established a tax policy if recreational marijuana became legal, setting an overall 15 percent tax on cannabis just as was prescribed under the voter-approved 2020 initiative. The South Dakota House Taxation Committee had approved the legislation last week.

Activists viewed that defeat as a setback, but clarified that the measure itself would not have legalized adult-use cannabis. What’s most important, they say, is passing SB 3 to enact the broader reform.

In another win for reform advocates, the Senate Judiciary Committee on Wednesday defeated a bill, SB 20, that would have eliminated certain legal protections for medical cannabis patients under a program that voters approved in 2020.

“In doing so, they defended medical cannabis patients in South Dakota from some of the harshest cannabis penalties in the country,” Schweich said of the committee action. “SB 20 would have abolished the affirmative defense and re-criminalized patients in defiance of the will of the people. The defeat of this legislation is a victory for medical cannabis patients and a victory for personal freedom.”

Activists welcome the opportunity to work with the legislature to develop a framework to regulate adult-use marijuana, but they’re also keeping their options open.

SDBML is actively collecting signatures to place legalization on the state’s 2022 ballot as lawmakers navigate the issue.

The campaign’s 2020 success at the ballot was overruled by the state Supreme Court as a result of a legal challenge funded by Gov. Kristi Noem’s (R) administration. The court ruled that the measure violated a single-subject rule for ballot initiatives.

Noem’s office also recently suggested that the activists behind that voter-approved initiative should pay the legal fees of the lawsuit that invalidated the will of voters—a proposal that the campaign called “ridiculous.”

Last week, Noem told reporters that she’s “never been supportive of recreational marijuana” but it’s a “debate that people in South Dakota are having.”

“There’s recreational bills here in the legislature that could be improved,” she said. “We’re talking about that.”

While a recent poll found that most South Dakota voters approve of Noem’s job performance overall, just 39 percent approve of her handling of marijuana legalization, with 51 percent disapproving. The governor is up for reelection this year.

Noem has consistently faced criticism from advocates and stakeholders over her early opposition to cannabis reform.

She released an ad ahead of last year’s election urging residents to vote against the legalization initiative that ultimately passed, 54-46 percent.

Lately, however, the governor seems committed to associating herself with the implementation of a separate medical cannabis legalization initiative that voters also overwhelmingly approved last year, despite having opposed the proposal in the run-up to the election.

After regulators approved rules for the medical marijuana program in September, Noem said her administration “is fully on board to make certain South Dakota continues to implement the most responsible, patient-focused medical cannabis program in the country.”

Noem tried to get the legislature to approve a bill to delay implementation of the medical cannabis program for an additional year, but while it cleared the House, negotiators were unable to reach an agreement with the Senate in conference, delivering a defeat to the governor.

In response, her office started exploring a compromise last year, with one proposal that came out of her administration to decriminalize possession of up to one ounce of cannabis, limit the number of plants that patients could cultivate to three and prohibit people under 21 from qualifying for medical marijuana.

Maryland House Debates Bill To Put Marijuana Legalization Referendum On November Ballot

Photo courtesy of Philip Steffan.

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