South Dakota’s second-largest city might cut the number of licensed medical cannabis dispensaries allowed in town by half.
The reduction under consideration in Rapid City – limiting MMJ dispensaries to five, down from 10, according to KOTA – is the latest example of what appears to be a nationwide trend.
Most states with legal cannabis access give significant authority to city and county governments to regulate or ban commercial cannabis activity.
Recent results suggest both local lawmakers and their constituents are keen to ban or restrict.
Local lawmakers cut back on regulated cannabis businesses
On Election Day, voters in at least five jurisdictions across the country voted to keep limits or outright bans on cannabis stores in place.
In some cases, that might be welcome news to existing cannabis retail operators complaining of market saturation and shrinking margins.
That’s not the case in Rapid City, where one operator is plotting a lawsuit to stop the City Council from reducing marijuana business licenses.
“Patients aren’t asking for this,” said Kittrick Jeffries, the founder and CEO of Puffy’s Dispensary, who announced plans to sue, according to KOTA.
“This is politicians that are asking for the number of licenses in Rapid City to be reduced,” he added. “I haven’t heard of any patient come up and say, ‘you know, we want less options.’”
The City Council will vote on reducing licenses Wednesday, according to KOTA.
When is a cannabis market saturated?
Rapid City is one of several cities across the country that’s reevaluating the local cannabis industry.
In late October, the City Council in Port Hueneme, California, voted to reduce the number of permitted marijuana businesses allowed in town by one-third.
That’s partly because two cannabis stores that did open owe the city more than $50,000 each, according to The Ventura County Star.
Other larger cities with established legal cannabis retail have also cut back on licensed businesses.
In San Francisco, a moratorium on new retail permits imposed in the summer of 2023 is still in effect.
That came amid the collapse of high-profile ventures including a “cannabis convenience” concept launched in 2022 by the co-founders of MedMen Enterprises.
Subscribe to the MJBiz Factbook
Exclusive industry data and analysis to help you make informed business decisions and avoid costly missteps. All the facts, none of the hype.
What you will get:
- Monthly and quarterly updates, with new data & insights
- Financial forecasts + capital investment trends
- State-by-state guide to regulations, taxes & market opportunities
- Annual survey of cannabis businesses
- Consumer insights
- And more!
Medical Disclaimer:
The information provided in these blog posts is intended for general informational and educational purposes only. It is not a substitute for professional medical advice, diagnosis, or treatment. Always seek the advice of your physician or other qualified healthcare provider with any questions you may have regarding a medical condition. The use of any information provided in these blog posts is solely at your own risk. The authors and the website do not recommend or endorse any specific products, treatments, or procedures mentioned. Reliance on any information in these blog posts is solely at your own discretion.
