After weeks of ongoing discussions, Rapid City Council voted to deny a cannabis business a retail liquor license on the grounds that it was an inappropriate venue.
The board voted to deny Rapid City Cannabis, Inc. a new South Dakota malt beverage and farmhouse wine retail license and wine and cider retail license for its location at 3075 N Plaza Drive, Suite B. Voting was 6-2 Monday night.
Council members Lance Lehmann and Laura Armstrong opposed the denial. Council members Bill Evans and John Roberts were absent from the meeting.
Council Member Pat Jones moved to deny the licenses with an amendment from Council Member Ritchie Nordstrom to include the basis for an inappropriate location.
“As it has been referred for review for several weeks, (it) has given people a chance to review it and determine what we believe is in the best interests of our citizens of Rapid City,” Jones said. “The recommendation that has come to us from our lawyers, our planning area and others is that we should deny this on the basis that this is not a suitable place to sell marijuana and beer, wine etc under one roof at one place is not appropriate for this place.”
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City Attorney Joel Landeen, upon questioning from Nordstrom, said the plaintiff followed all of the established rules for the application process and complied with all of the order rules put in place.
He also said the discussion was not about the prescription.
“Ideally, if you didn’t want to sell alcohol and marijuana, you would have prohibited that in the ordinance,” Landeen said. “But this is a liquor license and the two things you look at are whether the location is suitable and whether the applicant is a suitable person.”
Landeen also said he wanted to correct a statement – the legal department was not recommending approval or denial, but if the council chose to deny the plaintiff, the basis would be that the location was not appropriate.
He said there is case law that talks about factors other than the physical location of the actual building.
“You can go beyond zoning and land use issues,” Landeen said.
Rapid City Cannabis was one of six companies selected for one of 15 medical cannabis dispensary licenses in Rapid City. Rapid City Cannabis received one license, as well as a license for CC Health and Hive Collective, Genesis Farms had two, Greenlight Dispensary received three, and Puffy’s LLC had seven, according to the March drawing.
The North Plaza Drive location of Rapid City Cannabis is in a licensed location for a medical dispensary and has been approved by the city council.
Nordstrom said he was looking for a recommendation and hoped someone would make a motion to be able to defend it if it goes to court.
Landeen said the plaintiff was present with an attorney. He said he couldn’t guarantee there would be a trial. Landeen said they could defend the decision, but he couldn’t guarantee victory.
“It really depends on the facts and the basis of the facts that you don’t think selling marijuana with alcohol is appropriate,” he said. “In a trial, if the perception is that you denied it because you don’t like marijuana, that could prove problematic in court. Neither I nor Mr (Richard) Williams today can tell you. say what a judge is going to do.”
Attorney Richard Williams spoke on behalf of Rapid City Cannabis during public comments. He said he understands the request may seem new or novel because the city has never had medical cannabis before, but said it’s not a new concept.
“We see this every day and it’s become so pervasive that we don’t even think about it,” Williams said.
He said it happens at places like Walgreens, Walmart and Safeway where prescription drugs and alcohol are sold.
Williams said it was different because the regulations imposed on the medical cannabis industry are robust and “far superior” to keeping alcohol out of the hands of under-21s.
He said no one would even be allowed near the cooler where the alcohol was allegedly kept without showing a medical cannabis card and ID, which requires patients to be 21 or older.
Kittrick Jeffries of Dakota Cannabis Consulting spoke during the public comments and said the cannabis industry does not want to see cannabis falling into the hands of children.
He said he was also part of the rulemaking process for state and local governments. Jeffries said one rule in particular from the Department of Health allows for the co-location of medical cannabis establishments such as cultivation, manufacturing, testing and dispensary.
Jeffries said Department of Health rules state that even a medical cannabis establishment must have separate means of exit and entry separate from any other medical cannabis establishment, unless there is common ownership. However, there must be lockable and alarmed doors separating activities performed under different licenses.
“This business of this licensed malt beverage would be used in the same space as the medical cannabis establishment,” he said. “I think that’s along the lines of what the Department of Health was trying to explain. … I think the intent of this rule was to cover malt drinks, video lottery, sex shops, among a wide variety of other things, it certainly came up in that rulemaking process. Why it’s not there, I’m not 100% sure.”
Jeffries said the rule speaks to the intent to separate activities.
During the board discussion, Armstrong said the decision was difficult. She said the applicant had completed all the applications, submitted them and they were approved. She said the city accepted the check and a memo from Community Development said staff thoroughly reviewed ordinances and state law and found nothing that prohibits use in conjunction with the dispensary.
Armstrong said she wasn’t happy about it, but people don’t like big government.
“Not too long ago we had a conversation about letting companies control their own activities, right? Let the free market decide, I think the words ‘personal responsibility’ were floating around “, she said. “I personally think having alcohol in this establishment devalues the point of having medical marijuana, and I sympathize with the stories. I understand where you’re coming from, but our job is to enforce those laws.”
She said she agreed it was not good policy, but the board should change the policy. She said the plaintiff had done everything he was supposed to do and the board was pulling the rug out from under them.
“I’m not happy, I don’t want this to happen, but my job is to make sure that we follow the facts, that we follow the law, and as is the case right now, this gentleman is in compliance – as much as I dislike it, as much as the majority of us might dislike it,” Armstrong said.
— Contact Siandhara Bonnet at [email protected] —