VERNILLION – Vermillion City Council agreed on a miscellaneous set of fees on Monday for anyone wishing to establish a medical cannabis establishment within the city limits of Vermillion. He also agreed that part of this pricing structure should be based on the city’s population and be set on a per capita basis.

Stone Conley, assistant city manager, reviewed what has happened over the past two years to make the sale of medical cannabis possible in South Dakota.

Voters in the state approved the measure initiated on November 26, 2020, a measure that provides for the sale of medical cannabis in South Dakota as of July 1, 2021.

The initiated measure gives municipal governments the opportunity to participate in the licensing, regulation and fee setting process for medical cannabis establishments.

Conley reminded members of city council that he passed a city ordinance last May that allows the city to set various licensing and application fees for medical cannabis establishments.

But soon after, at its first meeting last June, council members passed a resolution to delay setting those fees until the state enacted rules regarding the sale of medical cannabis.

“On September 14, 2021, the South Dakota Department of Health released what it believes to be its final version of the program’s rules,” Conley told City Council on Monday. “It has already been approved by the Rules Review Committee. This is a big step forward for it to become officially active.

He said Vermillion could follow the same action as many first-class towns and establish three essential fees that it could charge anyone who wants to start a medical cannabis business in the community. These three fees are the initial application fee, the initial license fee, and the annual renewal fee.

A “dollar per capita” system, he said, has been suggested to establish the amounts of the initial application fee and the first year of the initial license fee.

“This dollar per capita system would basically be in response to the last census we had in 2020,” Conley said.

The census determined that the population of Vermillion is 11,695.

“That would be the dollar amount that we would charge for our initial application fee,” he said, “and that would include a single establishment to be covered as well for the calendar year up to December 31. If you you wanted to own another establishment – say, you also wanted to own a second establishment or another for manufacturing – you would also have to pay an additional $ 5,000 for that up-front license and application fee.

“In the future, the city has also discussed the possibility of collecting a renewal fee of $ 5,000 relating to the initial active license of a medical cannabis establishment in the city,” said Conley. “So basically every facility someone owns with that same applicant – they would pay $ 5,000 a year to renew it. Each establishment would cost $ 5,000 and after that, $ 11,695 initially. You would also pay $ 5,000 initially to start for each establishment beyond one.

Part of the city’s ordinance dealing with application fees states: “At the time an applicant files an application, the applicant must pay a non-refundable fee to the city in an amount established by resolution to defray costs incurred. by the city for background investigations, review of the application, inspection of the proposed premises and any other costs and labor associated with processing the application.

Vermillion’s application fee for medical cannabis establishments will be $ 11,695, based on the city’s population according to the latest census.

The city ordinance also sets out the process for the annual license fee: “Within 30 days of receiving a cannabis establishment registration from the South Dakota Department of Health in accordance with Chapter 34-20G of the SDCL, and when an applicant submits an application for renewal, the license holder must remit to the City an annual license fee in an amount established by resolution. The annual license fee is in addition to the initial application fee required under the City’s ordinance. The annual fee is paid on the basis of a full calendar year regardless of the date of issue, and no pro rata or discount will be granted.

Conley said: “Essentially, the administration recommends that we run this per capita system with $ 1 using the latest decennial census available, which is 11,695 (current Vermillion population) and that the initial application fee also includes a sole medical cannabis establishment for the remainder of the calendar year in which the initial fee is paid.

John Peterson, a farmer from Wakonda, told council members that he and his business partner were “really interested in growing medicinal cannabis. I don’t know what process we would take to be in the country. I don’t think we would fall under any of the regulations that you decide here tonight.

“That’s right,” said Mayor Kelsey Collier-Wise.

“We’re just wondering, under the administration fee – would that fall under the same rate structure as Vermillion City, or would we go to the county?” Peterson asked.

“It would be the county commission that would determine this,” the mayor said. “We have no say in their licenses.”

Peterson asked if the City has yet to determine the number of licenses it will issue for medical cannabis establishments.

“Our ordinance does not limit the number of licenses,” Collier-Wise said, “so in the town of Vermillion and within the city limits there is an unlimited number of cultivation, manufacturing and dispensary licenses that could be requested – and testing, although it looks like state regulations on testing are a bit tighter. ”

A note from City Manager John Prescott to City Council members notes that while it may be suggested that the state provided a recommendation for the different fee levels that were discussed on Monday, the Town of Vermillion has the right to decide of the dollar amount for the city council. costs.

The memo stated why Vermillion and other cities are required to set initial application, initial license, and annual renewal fees.

“The City currently assumes all costs associated with issuing public notices and filing fees associated with each individual aspect of the permit application and issuance process. Each new applicant must make arrangements with a law enforcement agency and go through the fingerprinting process, ”the city manager’s memo said. “The applicant must also provide law enforcement with payment to the South Dakota Criminal Investigation Division and the FBI in an amount necessary to cover the costs of the criminal record check.

“These actions must be taken by a claimant prior to the publication of the Notice of Hearing required by South Dakota law. The applicant’s completed application will be attached to the law enforcement agency certification when received, ”the note said. “This is in addition to their payment of various license and application fees. “