In a close vote, the Rapid City Council approved Resolution No. 2024-079, placing a temporary moratorium on accepting new applications for cannabis dispensary licenses, pending further review after the November election.
The decision comes as the city grapples with how to manage the distribution of its 15 cannabis dispensary licenses, which were initially authorized in response to the 2020 voter-approved legalization of medical marijuana in South Dakota.
Rapid City’s ordinance permits one dispensary license for every 5,000 residents, the highest number of licenses issued by any community in the state. However, six of the licenses have remained inactive since their allocation in a 2022 lottery. Five of the licenses, all held by Puffy’s dispensary, have been the subject of legal proceedings with the state, leaving their future in limbo.
During the council meeting, city attorney Joel Landeen explained the moratorium would maintain the status quo until after the November election when voters decide on legalizing recreational marijuana. The city can then reassess how to proceed with the five inactive licenses.
“If the attached resolution is rejected, staff will reallocate the five inactive licenses to the alternates based on the list established by the original license lottery,” Landeen said.
Puffy’s CEO Kittrick Jeffries spoke at the meeting, telling the council to allow the legal process regarding his dispensary’s licenses to continue. Jeffries said despite spending over $3 million and meeting all operational requirements, the state had not issued necessary licenses, and Puffy’s was currently involved in a Supreme Court appeal.
Jeffries said he is frustrated the city might reallocate the licenses before resolving his legal dispute.
“We’ve done everything right, followed the rules, and invested significantly,” Jeffries said. “It’s unfair that Puffy’s is being denied the opportunity to continue its legal process, especially after Rapid City officials previously indicated they would allow it to play out.”
Councilors were divided on the issue. Council members Kevin Maher and Pat Roseland said they support the moratorium, citing concerns about the high number of dispensaries compared to other cities. Maher said it is important to halt additional licenses until more clarity is reached post-election.
Lindsey Seachris of Ward 2 opposed the moratorium, saying it is unfair to change the mid-process rules, especially for businesses that had invested significantly based on the original ordinance.
The final vote saw council members Lance Lehmann, John Roberts, Rod Pettigrew, Seachris and Bill Evans voting against the moratorium, while Kevin Maher, Greg Strommen, Josh Biberdorf, Jesse Ham and Pat Roseland voted in favor.
Mayor Jason Salamun cast the tie-breaking vote.
The decision means that the five inactive licenses will remain on hold until after the November election, at which point the council will revisit the issue.
The temporary halt allows Rapid City to pause its next steps while weighing the broader implications of cannabis legislation in the state.