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LEAD — The city of Lead will not restrict the number of medical marijuana licenses it sells, according to the first proposal of a new law introduced Monday.

Lead City Commissioners introduced the ordinance that will govern medical marijuana cultivation, testing and dispensary facilities within city limits at their regular meeting, Oct. 4.

“My personal feeling is let the market set the course,” said Mayor Ron Everett, regarding the unlimited licenses the city will offer for medical cannabis establishments. “I don’t think we will have very many in Lead. Our commercial zone is not all that big.”

A separate zoning ordinance stipulates that medical marijuana businesses may not operate within 1,000 feet of school zones, including licensed daycare centers, or within 100 feet of churches. While the original ordinance stipulated the establishments be just 500 feet from a school zone, Liz Tiger, a consultant with 605 Cannabis, an organization that drafted the legislation to legalize medical marijuana in South Dakota, said the new state code requires a 1,000-foot setback.

Under the current ordinance that regulates licenses, the city will charge a $5,000 fee for any new, transferred, or renewed medical cannabis licenses. Additionally, medical cannabis businesses will be required to obtain state approval to operate in Lead, and if a business does not receive state approval, the local law allows for half of the license fee to be refunded.

“I feel it’s important that we don’t raise those fees to a number that prices out our local folks,” said Commissioner Colin Greenfield.

Some highlights in the current ordinance require medical cannabis businesses to hold insurance policies that indemnify the city from any damages related to the business. The ordinance also institutes a $500 per day fine for any unauthorized conduct related to cannabis, or any public nuisances. The ordinance stipulates that the medical cannabis businesses must meet all financial obligations, including to utility companies, in order to legally operate with a city license.

However, some residents asked the commission to tighten up some language in the ordinance so that it is not subject to broad interpretation. Requirements to meet financial obligations, for example, should be specific only to those obligations related to government fees, insurance, and utilities. Additionally, former Lead City Administrator Mike Stahl and Lead Police Chief John Wainman asked the commission to clarify public nuisances that would violate the medical cannabis license.

“I would hate for the next guy who sits in this chair to say ‘I hate potheads, and I will find a reason to bring any violation of ordinance or state law,” Wainman said. “There has to be a reason and not be subjective, so it’s not just ‘I don’t like these guys and I’m going to complain about them.’ There has to be something articulable instead of an opinion.”

Ed Riley, owner of Black Hills Buds, LLC, a South Dakota-based medical cannabis dispensary and cultivation business, thanked city commissioners for their hard work on the ordinance.

“I am very interested in coming and doing business in Lead and opening a medical dispensary,” he said. “We are excited about your community and the things that you have going here. The whole vibe you have in Lead is a good feel. We’re excited about coming and doing this right. We’re going to grow very clean, medicinal marijuana. I am not a consumer, but I certainly believe in everybody’s right to use it. We want to bring good jobs, do it well and fit into the culture of Lead. We love what Main Street Lead is looking and feeling like. This was our first choice when we started looking at locations for a medical dispensary over a year ago. We want to supply South Dakotans with a good medical product, and bring good jobs to the community.”

Lead’s medical cannabis regulation ordinance is several pages long, but it was not posted online before the meeting, and copies were not made available for public viewing at the meeting. However, commissioners said revisions to the ordinance will be based on Monday’s discussion, and afterward the ordinance will be posted on the city’s website at www.cityoflead.com. The ordinance may also be viewed at City Hall. Public comments will be accepted before the ordinance is finalized, which is expected to happen at the next city commission meeting, Oct. 18.  

“It is a practice and a good one that any ordinance or resolution that comes before the board needs to be published online for the public to look at before it is discussed,” said Stahl. 

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