South Dakota Panel Reviews Medical Cannabis Growth, Home-Grow Surge and Digital IDs

Lawmakers heard that patient enrollment and home cultivation licenses have both jumped sharply as the state weighs new oversight tools and a federal reclassification's unclear effects.

FILE — statehouse · B.D. Gilfry / CC BY-SA 2.0

PIERRE, S.D. — South Dakota's legislative Medical Marijuana Oversight Committee met Monday at the state Capitol to review the health department's handling of a program that has grown rapidly since its 2021 launch, according to Dakota News Now, KELOLAND.com and the Mitchell Republic.

Patient Numbers Climb

State medical cannabis administrator Whitney Brunner told the committee that 19,375 people were registered as medical cannabis patients as of June 30, 2026, up 30.5% from 14,843 the prior fiscal year, according to KELOLAND.com and the Mitchell Republic. Dakota News Now separately reported the figure as "over 19 thousand." Brunner said enrollment spiked early in fiscal 2026 before leveling off by fall and remaining "fairly stable" the rest of the year, KELOLAND.com reported. Department data cited by the Mitchell Republic show most cardholders are in their 30s and 40s, and more than 70% report severe debilitating pain as their reason for use.

Home Cultivation Licenses Jump More Than 1,000%

Brunner also reported that home-grow licenses rose from 61 in fiscal year 2022 to 715 in fiscal year 2026 — a 1,072% increase — according to the Mitchell Republic. Home cultivators are limited to two flowering and two non-flowering plants and pay a $20 fee, submitting a photo of the grow room, a photo of the door lock and a diagram of the grow location. Brunner said those diagrams are "often hand-drawn and lack detail," telling lawmakers, "The lack of regulation in this area is a bit concerning for us." She said the department has examined whether tighter rules are needed but called it "a greater conversation to be had," noting potential "legal and safety considerations." Sen. John Carley, R-Rapid City, told the Mitchell Republic that "many of us will be looking at that exact item and will come back to that concern next meeting."

Digital ID Cards and Inspection Concerns

The department plans to begin issuing digital ID cards to patients next summer as part of a broader software overhaul now being negotiated with a technology vendor, Brunner told the committee, according to KELOLAND.com. Rep. Bobbi Andera, R-Sioux Falls, welcomed the move: "I'm so excited for this digital card thing to come out. You have no idea. This is something that this committee was fully in favor of." Committee chair Rep. Josephine Garcia, R-Watertown, had introduced legislation earlier this year for a digital registry card but set it aside once the department issued its own request for proposals, KELOLAND.com reported. Separately, Dakota News Now reported that committee members raised concerns that inspection penalties for licensed businesses are too harsh for minor errors. Garcia said, "We definitely need to improve on that. I suggested today mock inspections so the actual people that are selling, the cultivators or the actual dispensaries, know what they are looking for before they actually come. It would reduce the anxiety and also make it safe and get what we require done without this 'gotcha.'" A Fort Pierre dispensary owner, Robert Krogstad, identified by Dakota News Now as owner of Bad River Cannabis, told the outlet his business had to rearrange its budget to cover a $3,000 fine, saying money set aside for other work had to be redirected to pay it.

Reclassification's Unclear Effects

The committee was briefed on the federal reclassification of marijuana from a Schedule 1 to a Schedule 3 drug, but Dakota News Now reported that guidance on tax policy and interstate commerce has not yet been issued by federal regulators, leaving lawmakers without a clear basis for related legislation. That reclassification follows a related development covered separately by South Dakota Searchlight, which reported the state has already moved to ease cannabis-related taxes and banking restrictions tied to the federal change.

Market Context

State licensing records show South Dakota's medical-only market currently has 53 open retail licenses, 31 cultivation licenses, 14 manufacturing licenses and one testing lab, with no statewide sales revenue figures available in year-to-date filings. Recent roster updates show churn in the retail sector, with new licenses issued to Genesis Farms and Terp City and a cultivation license granted to Pitbull Acres LLC, alongside several closures, including Dakota Dispensaries, Royzzz of North Sioux City, Northern Hills Alternative Health, Dakota Health and Wellness, Redwater Cannabis Care and Superior Buds.

What's Next

KELOLAND.com noted Monday's session was "much more business-like" than the committee's final 2025 meeting, when tension flared between lawmakers, department leader Melissa Magstadt and industry representatives — suggesting relations between regulators and the industry may be improving, though the underlying disputes over inspections and home-grow oversight remain unresolved. Garcia told Dakota News Now the committee's next meeting is scheduled for October, when members hope to hear testimony from the state attorney general on the future direction of the medical marijuana program.