Simplified: Sioux Falls City Council on Tuesday passed an amended set of rules for medical marijuana dispensaries. Here's a look at the changes from the original proposal.

Why it matters

  • Tuesday's vote is the culmination of months of work by city government in looking at possible time, place and manner restrictions for medical marijuana now that it's legal statewide.
  • The rules kept a cap of five dispensaries as well as a ban on cultivation and manufacturing facilities.  
  • The council did loosen some restrictions by lowering fees for businesses, adjusting the process to get a license and allowing license holders to transfer – i.e. sell – licenses to others in a way similar to current liquor license rules.
  • Other changes failed to pass, including two amendments from Councilor Pat Starr – one looking to remove the cap on the number of dispensaries, and another removing limitations on how dispensaries can market or display what they're selling.
  • Councilors called the final ordinance – which passed 7-1, with Starr as the lone dissenting vote – a compromise.
"It kind of hurt me to agree to some of what I voted on here this evening," Councilor Rick Kiley said. "But I think if it doesn't hurt, you're not compromising."

What are the rules now?

The biggest changes were related to the fees prospective dispensary and testing facility owners must pay.

Fee changes include

  • Initial application fees are $25,000 to get into the lottery drawing for the five available dispensary spots.
  • Those denied one of the five spots will be refunded the $25,000.
  • Initial license costs were lowered from $100,000 to $50,000 for dispensaries and to $5,000 for testing facilities (which weren't included in the original ordinance, only dispensaries.)
  • Renewal license fees went from $100,000 every two years to $25,000 per year for dispensaries and $1,500 for testing facilities.

Another set of significant changes were made in terms of how licenses are handled after they're issued. Councilor Janet Brekke made two amendments, which both passed 8-0, on this topic.

License rule changes include

  • Licenses can now be transferred. The transferee has to meet the same criteria and jump through all of the same hoops as the original license holder.
  • City Council now has to vote on any license revocation or suspension, a change from a previous draft which allowed a city licensing specialist to make that call. Brekke said if a person's livelihood is going to be taken away "with the stroke of a pen," it should happen in a public forum.

What happens next?

Prospective dispensaries are now on the state's timeline. No permits will be issued locally until the state rules are finalized and implemented.