The Sturgis City Council approved Tuesday the second and final reading of a zoning ordinance for medical marijuana establishments, but went back to a revamp of an ordinance for licensing and procedures for those establishments within the city limits.
The second ordinance included a rewrite of licensing for marijuana dispensaries by reducing the number of dispensaries from four to two, and adding the ability for the city of Sturgis to "hold" and "operate" both dispensary licenses.
City Attorney Mark Marshall said the changes came about "by consideration of the ability of the city of Sturgis to hold a dispensary license" and to operate a city-owned business similar to the city's liquor store.
"The discussion among staff being that it might be a very valuable license and the city could benefit greatly from holding it, especially in light of the number of special events that are taking place in Sturgis," Marshall said.
However, Marshall cautioned the City Council that the state of South Dakota has yet to set up the rules governing medical marijuana, and that the state could disallow cities from owning and operating a dispensary.
"We do not know today if that will come to pass, although there has been some discussion among the Municipal League and other city attorneys that legislation authorizing that will be introduced in the next session," he said.
Marshall said there is conflict among groups who do not feel city government should be able to compete with private business, but the changes to the marijuana dispensary ordinance would allow the city to open a business if it is approved by the state.
The amended ordinance also provides language that would give the city preference and priority over private businesses in establishing a marijuana dispensary.
"This amendment would allow the city's application, if authorized to submit it, to be considered first," Marshall said.
The revised ordinance set the application fee at $7,500 annually for any cannabis cultivation, manufacturing, testing, or dispensing facilities, and set a cap of two licenses for marijuana dispensaries — which could be held exclusively for the city. Licenses for cultivation, manufacturing and testing establishments would not have a cap.
The first reading of the licensing ordinance passed the City Council without any opposition, and will move on to a second reading at the next City Council meeting on Sept. 20.
The second reading of the zoning ordinance passed unanimously, and will authorize cannabis growing and manufacturing operations to industrial areas only. Testing and retail operations would be allowed in commercial zones.
The zoning ordinance states that no cannabis dispensary may operate within 200 feet of a residential zone within the city, and no cannabis dispensary may operate within 1,000 feet of another cannabis dispensary.
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