Local retailers navigate emerging CBD market, state regulations

It's a whole new world for South Dakota sellers of CBD.

What was once an illegal narcotic in the state of South Dakota less than a year ago can now be found on the shelves inside several local retailers. While some users ingest the natural hemp-derived product for different effects, cannabidiol, more commonly known as CBD, has quickly become a popular pain relieving alternative for Mitchell residents in its first seven months of legality in South Dakota.

Before CBD was legal, Steven Weber, who manages the Fog N’ Droz vape shop in Mitchell, said it was common for customers to inquire about the legal status of CBD and whether any products were available.

“We had a lot of people coming in looking for CBD, and they were bummed that we couldn’t carry it since it was considered a scheduled drug that had possible prison time attached to it,” Weber said.

Prior to March 27, CBD was classified as a schedule IV narcotic, which made it a Class 5 felony that carried a maximum punishment of up to five years in prison and a $10,000 fine.

That changed after legislators worked with Gov. Kristi Noem to pass a bill that legalized industrial hemp and CBD oil. That opened the door for Fog N’ Droz and other retailers to tap into the CBD market, after it passed with emergency language enacting the law immediately.

“Right after it was legalized, it was flying off the shelves. But it has really slowed down as of lately,” Weber said, noting it accounted for nearly 50% of the store’s profits in the first few months of legality. “Now, CBD products make up about 5% of our profits. I think people are finding it doesn’t have the effect that they thought it would have.”

So what exactly is CBD? CBD is one of many chemical properties found in cannabis, or marijuana. What differentiates the two is CBD lacks the tetrahydrocannabinol (THC) that’s found in marijuana, which is the main psychoactive compound in cannabis that produces the “high” effect. Under state and federal law, CBD that’s legally sold and distributed can’t have over 0.3% of THC.

This past week, South Dakota voters approved adding to that "high" effect from cannabis, passing measures that would ensure access to both medicinal and recreational marijuana. In the span of about 15 months from March 2020 to July 2021, the state will go from having a hard-line stance against CBD and marijuana to loosening the reins on each of those areas, although how legal cannabis in the state is regulated will need to be determined.

For some users, CBD helps relieve stress and anxiety. But other users have also felt a pain-relieving effect and it has been known to help reduce epilictic seizures in some instances.

Outside of work, Weber has used CBD some. For Weber, the herbal product does not produce much of an effect that some other users have felt.

“I’ve tried all of the CBD products we have when my back was hurting bad, and it didn’t really do anything for my pain,” Weber said. “But I see customers who buy it religiously for dementia and post-traumatic stress disorder (PTSD). For things like that, I stand behind CBD.”

While Weber hasn’t felt real effects from CBD, some of his customers swear by it. Cole Foote, of Mitchell, is one of those customers who has used CBD to help ease physical pain. As an avid skateboarder, Foote said CBD has helped relieve muscle soreness and body pains after a few hours of physical activity.

“It has definitely helped me relieve pain,” Foote said. “It also has a calming effect for me. But the main reason I will use it is for pain. The flower form is more effective for me as well.”

At Fog N’ Droz, their CBD products are sold in oil form, which are packaged in small jars and tubes. However, CBD producers are now offering the product in natural flower form, which is currently illegal under South Dakota law.

Weber said the legality of hemp flowers has caused some confusion, which he found out the hard way. Fog N’ Droz previously sold CBD in flower form that closely emulates the look of marijuana, but the business removed its flower products from their shelves recently following a run-in with local law enforcement. Weber said local authorities seized the product to have it tested for THC levels, which came back showing it had less than 0.3% of THC in the plant.

“Detectives didn’t arrest me for it, but they bought some and took it for testing. Two weeks later, they told me I had to get rid of it all,” Weber said.

Part of the confusion surrounding the flower form of CBD, Weber said, is other retailers in the state currently selling the product. Fog N’ Droz has a second store location in Deadwood where the flower product is being sold, which Weber said hasn’t resulted in any legal issues.

“We are the only vape shop and CBD retailer in the state that I’m aware of that was told to stop selling it,” Weber said.

State Sen. Josh Klumb, R-Mount Vernon, sponsored the industrial hemp bill that passed that legalized CBD oil in the state. Klumb said CBD seems to provide users with health benefits derived from cannabis without causing the high that THC is known for producing.

“I worked really hard for the industrial hemp bill for a couple of reasons: for farmers to have another industry to tap into, and legalizing CBD oil,” Klumb said. “I believe there are medical purposes in just about every plant that grows. I think that you get the same pain relieving properties and medical benefits from the CBD oil without the debilitating high you see in marijuana.”