Council Working Session

MINUTES Council Working Session Tuesday, May 25, 2021 at 2:00 PM Carnegie Town Hall, 235 West 10th St., Sioux Falls, SD 57104 1. Call To Order Present: Janet Brekke, Christine M. Erickson (Via telecom), Alex Jensen (Via telecom), Greg Neitzert, Marshall Selberg (arr. 2:15 p.m.), Curt Soehl, Pat Starr Absent: Rick Kiley Council Chair Curt Soehl called the meeting to order at 2 p.m. 2. Discussion Topic(s) A. Working Session Overview Council Member Greg Neitzert provided an overview of the working session by explaining that he has been working with City staff since late 2020 to identify options to implement IM 26. He discussed the limited scope of local governments' ability to regulate medical cannabis and highlighted the lack of State-promulgated rules, which are essential to crafting local policies. B. Current Medical Cannabis Framework (City Attorney’s Office) City Attorney Stacy Kooistra began by providing a distinction between the two recent sources of marijuana legalization in South Dakota: Amendment A and Initiated Measure 26 (IM 26). Amendment A was presented as an amendment to South Dakota's Constitution and approved by the voters at the last General Election. In February 2021, a Circuit Court held the amendment to be unconstitutional; the case is currently pending review by the State Supreme Court. IM 26 was also approved by the voters at the last General Election and subsequently codified under SDCL 34-20G with an effective date of July 1, 2021. Kooistra explained that the measure is codified within the “Public Health and Safety” title and is a lengthy statute consisting of 95 subchapters. He reviewed key provisions of the terms “cardholder”, “dispensary”, and “medical cannabis establishment” to provide context for subsequent discussion. Kooistra then reviewed in detail the role of local government in administering the statutes. He explained that medical establishments may be registered by the State, but certain application provisions apply if a city has enacted certain zoning and licensing ordinances. Without such ordinances, the State may register establishments without city zoning or licensing considerations. Additionally, the law contemplates the potential for cities to enact numerical limits on establishments. Dispensaries may  not be prohibited and such dispensaries may be subject to local license, permit, and registration requirements. At least one dispensary must be approved. The statute further requires the State to promulgate rules not later than October 29, 2021 in several areas. Among those rules are ones to establish a system to score competing medical cannabis establishment applicants and to govern establishments in their operation (e.g. health and safety of patients, security, packaging/labeling of medical cannabis, etc.). To date, rules have not been promulgated by the State. Under these circumstances, Kooistra provided three options to the Council: 1) institute a comprehensive City of Sioux Falls ordinance structure prior to the promulgation of rules; 2) pass substantive ordinances after review of the State’s draft regulations and upon effective date of the same; or, 3) to take no action. He went on to explain that a suitable “bridge” to implementing the second option would be a temporary ordinance that prohibits the acceptance of applications for a local permit and/ or license to operate a medical cannabis establishment until the South Dakota Department of Health has promulgated regulations. Kooistra concluded the presentation by outlining other considerations for the decision-making process: potential public smoking/consumption ordinance(s); protection of investments of those intending to do business in our community; and, a mutual Minnehaha, Lincoln, and Sioux Falls working group to communicate and collaborate regarding a regional approach for purposes of uniformity and consistency. Questions were taken after the presentation of Item 2C. C. Zoning Ordinance Considerations for Medical Cannabis (Planning and Development Services) Senior Planner Sam Trebilcock began his presentation by reviewing the local government powers provided for in SDCL 34-20G. They include the ability of local governments to: enact ordinances governing time, place, manner, and number of medical cannabis establishments; establish civil penalties for violation of an ordinance governing the time, place, and manner of a medical cannabis establishment; and to require a medical cannabis establishment to obtain a local license, zoning permit, or registration to operate (and that a reasonable fee may be charged for the local license, zoning permit, or registration). He suggested more time is needed to study the issue to ensure any proposed regulations do not conflict with as-yet unpublished administrative rules and to provide the most predictable rules and ordinances to protect investments and community interests. There are several zoning control options. A local government may choose to regulate medical cannabis no differently than its current ordinances allow. A local government may also determine that its current regulations and controls do not adequately address the unique needs and impacts of medical cannabis establishments as defined in SDCL 34-20G-1. Under this situation, local laws can seek to limit medical cannabis establishments to certain zoning districts and to regulate siting of the establishments. Trebilcock presented these considerations in detail and provided examples of sensitive land uses and separation distances. Discussion followed about: protection of investments; the City's legal liabilities; criteria for licensure; steps taken by other cities to implement IM 26; the importance of honoring the will of the voters; where the City does and does not have authority in regard to implementation of IM 26; timing for the delivery of proposed ordinances; fees; incremental approaches to making policy in this area; use of a task force to  facilitate continuity among adjoining jurisdictions; and the process for the promulgation of State rules. D. Next Steps This item was not discussed. 3. Public Comment Melissa Mentele stated that she authored IM 26 and provided background on the measure. She said the primary goal of the measure was to provide for safe, consistent access points to medical cannabis for patients. Emmett Reistroffer spoke about his involvement in the medical cannabis industry as a consultant and an advocate. He also shared his experiences as a municipal licensing official. He encouraged the council to think of dispensaries as pharmacies opposed to bars or casinos when considering zoning regulations. Sara Puth spoke about marijuana as a medicine and the importance of implementing the provisions of IM 26. 4. Adjournment Council Chair Curt Soehl adjourned the meeting at 3:45 p.m. Thomas M. Greco, City Clerk