Medical marijuana businesses in South Dakota will soon face a nearly 70% increase in their annual state registration fees, rising from $5,310 to $9,000.
“For a business-friendly state, this is not a business-friendly approach,” said Deb Peters, president of the Cannabis Industry Association of South Dakota.
The Department of Health oversees the state’s medical marijuana program. The fee was set at $5,000, with annual adjustments for inflation, when the program began in 2021 after voters legalized medical marijuana in 2020.
During the 2024 legislative session that ended in March, the department proposed raising the fee, and legislators obliged.
“The current establishment certification fee does not provide the revenue necessary for the program implementation and administration,” said the Department of Health’s Lynne Valenti, who testified to lawmakers.
Governor Kristi Noem signed the bill on March 14. The law took effect July 1 and requires the Department of Health to complete rulemaking that will raise the fee to $9,000 — an increase of $3,690 — by Sept. 30. The rule affects cultivation, manufacturing, testing and dispensaries.
Peters said the fee increase will hurt customers by causing dispensaries to raise prices, and she said it could hurt the entire medical cannabis industry.
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