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State regulatory process slowing Mitchell's medical marijuana dispensaries from opening

City officials say three dispensaries — all located on the south side of Mitchell — appear to be several months from opening their doors.

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Shown here is the former Runnings building, located at 1400 S. Burr St., where a medical marijuana company has been approved to open a dispensary and cultivation facility.
Adam Thury / Mitchell Republic
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MITCHELL — When are Mitchell’s medical marijuana dispensaries going to open?

Eight months have passed since the first cannabis dispensaries were approved by the Mitchell City Council, yet neither have opened for business.

Although three dispensaries have been approved to open in storefronts on the south side of Mitchell, City Attorney Justin Johnson said the state’s regulatory process is likely a major factor prolonging the medical marijuana businesses from opening their doors.

“We have to provide documents to the state saying the dispensaries are complying with our ordinances, and then they have to review it. The licensees who got their licenses are also still working through the process of getting their dispensaries and cultivation businesses built out,” Johnson said.

According to Johnson, two of the approved dispensaries — BesaMe Wellness and Superior Buds — are working through the state’s own set of regulations to do business in Mitchell, putting them ahead of the pack of Mitchell's five license holders. Once that process is finalized, it would mark the last hurdle in the regulatory process for both dispensaries to open.

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The steady pace BesaMe Wellness and Superior Buds is moving with has Johnson estimating both could open within roughly two to three months from now.

The former Runnings building along Burr Street is where BesaMe Wellness is gearing up to open its dispensary and a cultivation facility. Superior Buds’ dispensary will be inside a strip mall near Walmart and Menards. In recent months, crews have been seen working inside both of the buildings.

Native Nations Cannabis, a medical marijuana company operated by the Flandreau Santee Sioux Tribe, is also making progress toward opening a dispensary inside a strip mall on the south side of Mitchell at 1620 S. Burr St.

“Native Nations could also get their dispensary up and running before anybody since they have the cultivation side of things already going in Flandreau,” said Johnson, who toured the Flandreau cultivation operation with city officials about a year ago.

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Shown here is the 1620 S. Burr St. location that Native Nations Cannabis is seeking to open a medical marijuana dispensary.
Sam Fosness / Republic

Will there be enough demand for Mitchell to house three dispensaries, which could soon become five if two license holders can find a location within about eight months?

Since medical marijuana became legal in the state a year ago, the number of medical marijuana cards issued has slowly trickled up. As of Wednesday, there were 2,118 South Dakotans with medical marijuana cards, according to the state's Department of Health. For the dispensaries to sell their products, customers must have a medical card approved by a physician recognized by the state.

With the annual renewal date coming up for the license holders, time is of the essence.

In addition, the city’s ordinance states a cannabis dispensary must make at least one sale six months after gaining a license, but Johnson said the city is not enforcing the regulation in part due to license holders making progress toward opening their marijuana businesses.

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Johnson emphasized the city ordinance's approval was intended to prohibit an entity from holding onto a license with the purpose to resell it.

“We haven’t been enforcing that part of it yet because we knew there was going to be a bit of a lag when they got the license and when they could get it up and running,” Johnson said. “It was intended to make sure you are getting someone legitimate and trying to use the license instead of someone who is just going to sit on it and try to turn it over.”

Cultivation facility inching closer to operation

For Mitchell’s medical cannabis dispensaries to stock their shelves, the marijuana products must be cultivated and transported within the state.

BesaMe Wellness is the lone entity in Mitchell with a cultivation license that gives the company the ability to grow the cannabis plants inside the former Runnings buildings, located at 1400 S. Burr St.

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The former Runnings building where a medical marijuana company is planning to grow marijuana.
Adam Thury / Mitchell Republic

However, the Flandreau Santee Sioux Tribe is seeking to open its own cultivation facility inside the former Shopko building in Mitchell. The tribe recently purchased the 71,846-square-foot vacant building for $1.6 million with the goal of growing medicinal cannabis.

Johnson said the city has yet to receive an application from Native Nations for the cultivation license at the former Shopko building, which would ultimately have to be approved by the city council.

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Shown here is the front of the former Shopko building in Mitchell that the Flandreau Santee Sioux Tribe recently purchased with plans to open a medical marijuana cultivation facility.
Sam Fosness / Mitchell Republic

“It’s my understanding that once they start growing, it’s going to take them three to four months to grow and develop the products,” Johnson said.

Two approved dispensary applicants in search of new location

Although all five dispensary licenses in the city have been doled out, two of the license holders are in search of a new spot in Mitchell due to the city council denying variances for their first store locations.

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After Emmett Reistroffer, a South Dakota cannabis entrepreneur representing Genesis Farms, was denied a variance to open a dispensary in downtown Mitchell due to it being within 300 feet from a church, the council allowed him to maintain his license for one year while he searches for a new location. Under Mitchell's cannabis zoning regulations, a dispensary cannot be within 300 feet from a religious institution unless a variance is granted.

Mitchell businessman Donald Livesay Jr. was the second applicant hoping to open a dispensary who had his variance denied in April because of his proposed 501 E. Juniper Ave. building was within 1,000 feet of another dispensary.

Livesay Jr. also was allowed to keep his license for a year while he searches for a new spot. Finding a new location hasn’t been easy for both Reistroffer and Livesay Jr., who previously echoed the challenges they've faced.

“It’s been tough finding a place. I’ve utilized realtors and city officials to help, but it has been tough,” Livesay Jr. said.

With three dispensaries ready to go up on the south side of Mitchell, it limits their options.

Since Reistroffer and Livesay Jr.’s variances were denied in April, they have yet to come to the city seeking approval to operate at a new location.

“Everybody is all worried to say cannabis, like, 'Oh my God, they are all criminals.' These are people trying to get into a business opportunity that the state made available to them,” said council member Steve Rice.

Sam Fosness joined the Mitchell Republic in May 2018. He was raised in Mitchell, S.D., and graduated from Mitchell High School. He continued his education at the University of South Dakota in Vermillion, where he graduated in 2020 with a bachelor’s degree in journalism and a minor in English. During his time in college, Fosness worked as a news and sports reporter for The Volante newspaper.
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