Hemp has had a wild ride in South Dakota. Lawmakers debated it fiercely over the past two years, and its legalization was right within reach in 2019 when the state legislature passed a hemp bill, only to see it vetoed by Gov. Kristi Noem.
But conflict over the crop in the state has finally reached its end. South Dakota—once just one of three U.S. states that had outlawed hemp despite its federal legalization under the Agricultural Improvement Act of 2018 (the 2018 Farm Bill)—legalized its cultivation and production March 27.
While South Dakota is relatively late to adopt hemp legislation, lawmakers are hoping the paced program rollout will allow the state to avoid challenges seen in other states.
“I’m pretty sure there won’t be a lot of acres [licensed] this year, but it really allows our processes to be put in place,” says State Rep. Lee Qualm (R), who sponsored the bill.
South Dakota has a history of prohibiting hemp and its derivatives, even after the 2018 Farm Bill’s passage. In 2019, state lawmakers classified Epidiolex, a drug containing cannabidiol (CBD) that was approved by the U.S. Food and Drug Administration to treat epilepsy, as a Schedule IV controlled substance. (The U.S. Drug Enforcement Administration has since descheduled Epidiolex federally; prior to that, it was listed under Schedule V, a step below South Dakota’s classification of the drug.)
In July that same year, the state charged a man with drug trafficking after he was pulled over while in transit to a Minnesota hemp processor to deliver 300 pounds of cannabis that tested positive for tetrahydrocannabinol (THC), “although available court documents don’t state the THC content found in the field test,” the Argus Leader reported. The state’s attorney general has also been outspoken in reiterating hemp’s illegality as recently as March 2019.
So far, only tribes have had the opportunity to grow in the state—and they’ve taken it. As of early June, the U.S. Department of Agriculture (USDA) had approved hemp plans for five tribes in South Dakota for this growing season: Cheyenne River Sioux, Flandreau Santee Sioux, Oglala Sioux, Rosebud Sioux and Standing Rock Sioux (which overlaps into North Dakota).
Alex White Plume, the former president of the Oglala Sioux Tribe, told AP that hemp could bring money to his home, which he calls “the poorest community in the poorest county in the United States.”
The Slow Arrival to a Legal Market
When Noem vetoed the bill in 2019, state lawmakers went back to the drawing board. Qualm chaired a committee to study hemp and devise a new bill, and he spent that summer traveling and talking to experts from states with successful programs to learn about their strengths and challenges.
By early 2020, Noem had a change of heart. She still had reservations over concerns of public safety, law enforcement and funding but agreed to pass a law legalizing hemp so the state legislature could “focus on other priorities.”
Noem said she would only pass the law, however, if it met some key requirements, including a plan for enforcement and a reliable budget.
“I think we can all agree that we do not want to stress our already thin law enforcement resources. I also think we’re all in agreement that we don’t want to negatively impact our drug-fighting efforts across the state, and given that so many of our families are being ripped apart by substance abuse, I know none of us wants to take a step backwards as we address those issues,” Noem said during her State of the State address in January.
The new law holds several provisions that allow the state to keep a tight grip on enforcement. Anyone who transports hemp through the state, for example, automatically consents to a search without warrant so police can decipher whether the product is hemp or marijuana. “This seems rather suspect,” wrote Griffen Thorne, an attorney at Harris Bricken, on the law firm’s blog.
The law also bans smokable and inhalable hemp. In addition, anyone involved in producing hemp must be able to provide proof of licensure at all times.
“The key to this whole thing is paperwork,” Qualm says.
While hemp has finally cleared legislative hurdles, the state’s work is far from over. As of late June, South Dakota had not yet submitted its plan to the USDA, so Qualm doesn’t anticipate much hemp coming out of the state this year. The unpredictable spread of COVID-19 is threatening to slow that timeline even further.
Qualm says he has, however, already heard interest from fiber, seed and CBD oil processors about establishing operations in the state.
“I almost think it’s an advantage,” Qualm says about South Dakota’s relatively late arrival to hemp production. “We can learn from what other states did, and we don’t have to reinvent the wheel. And I really think it’s an advantage getting some processors in place first.”