Medical Marijuana Study Subcommittee

Senator Bryan Breitling, Chair

First Meeting, 2021 Interim Room 362 – State Capitol

Monday, June 21, 2021 Pierre, South Dakota

The first meeting of the Medical Marijuana Study Subcommittee was called to order by Senator Bryan Breitling at 10:00 a.m. (CST) in Room 362 of the State Capitol, Pierre, South Dakota.

A quorum was determined with the following members answering roll call: Senators V.J. Smith, Jim Stalzer, and Bryan Breitling (Chair); and Representatives Fred Deutsch, Linda Duba (via Teams), Caleb Finck (via Teams),

Ernie Otten, Carl Perry, Taylor Rehfeldt (via Teams), and Marli Wiese. Senator Heinert was excused.

Also in attendance from the Adult-Use Marijuana Interim Study Subcommittee were: Subcommittee chair Representative Hugh Bartels, Representatives Tim Goodwin and Mark Willadsen; and Senators Helene Duhamel (via Teams), and Michael Rohl (via Teams).

Staff members present included Amanda Marsh, Principal Research Analyst; Brigid Hoffman, Legislative Attorney; and Rachael Person, Administrative Specialist.

NOTE: For the purpose of continuity, the following minutes are not necessarily in chronological order. Also, all referenced documents distributed at the meeting are attached to the original minutes on file in the Legislative Research Council office. This meeting was webcast live. The archived webcast is available on the LRC website at sdlegislature.gov.

Opening Remarks

Senator Breitling welcomed everyone to the meeting and said he was pleased with what the committee learned at the first Marijuana Interim Study Committee meeting May 26-27. Senator Breitling highlighted goals for the Medical Marijuana Subcommittee, and read information from an email sent to legislators by Governor Noem introducing the medical cannabis website (medcannabis.sd.gov).

South Dakota Municipal League

Ms. Yvonne Taylor, Executive Director, SD Municipal League, presented the committee with recommended language changes to Codified Law to incorporate municipalities into the scheme, especially in the area of ownership of dispensaries. Ms. Taylor said the biggest change was in section 55 (SDCL 34-20G-55), where the Municipal League would propose adding language that would allow incorporated municipalities to apply for, be granted registration certificates, and own and operate a medical cannabis facility. Ms. Taylor said the Municipal League also recommends clarifying the language regarding the number limit of dispensaries, as there has been some confusion around the language.

Representative Deutsch asked what the Municipal League's position would be if South Dakota followed a similar plan as North Dakota and decided on a certain number of jurisdictions with one manufacturing facility per jurisdiction. Ms. Taylor said the biggest concern would be that the facilities meet local zoning ordinances and have the approval of the city where they would be located.

Representative Otten asked what tax percentage the Municipal League would recommend on the products. Ms. Taylor replied that cities have to be careful when it comes to adopting additional taxes, to keep the product from falling back into a black-market situation.

South Dakota Association of Healthcare Organizations (SDAHO)

Ms. Sarah Aker, Director of Fiscal Policy, SDAHO, presented proposed revisions to IM26 (Document 1). Ms. Aker said SDCL 30-20G-5 requires that a practitioner certify a therapeutic and palliative benefit in addition to the patient's condition. In SDAHO's review of the issue, they spoke with members and reviewed statute in North Dakota and Minnesota. They found that North Dakota's original statute, passed by voters in 2017, mirrored South Dakota's current statute, but North Dakota revised the statute in 2019 and removed language related to therapeutic and palliative benefit. Ms. Aker said Minnesota has never required that a physician certifies a therapeutic or palliative benefit but requires that the physician provides certification that a patient suffers from a debilitating or qualifying medical condition. SDAHO recommends removing the therapeutic or palliative benefit from the current statute and state that the physician certifies that the patient has that debilitating medical condition or a symptom associated with that condition.

Representative Deutsch expressed his concerns over SDAHO's recommendation, saying that simply stating a debilitating condition exists does not do what is necessary and physicians need a reason to certify that medical cannabis would provide benefit to the patient.

Representative Wiese also voiced concern over taking the therapeutic and palliative benefit language out of the statute and asked if it would allow anyone to diagnose or certify the use of medical cannabis. Ms. Aker said North Dakota removed the language from their statute when they realized it was limiting in terms of physicians who were willing to certify medical cannabis because it poses a threat to their federal licensure which is why practitioners are uncomfortable certifying the therapeutic and palliative benefit.

Telehealth and Health Issues in Colorado

Dr. Kenneth Finn, Colorado Springs, Colorado, thanked the committee for researching the subject of medical marijuana critically. Dr. Finn stated that Colorado has experienced extended consequences from their medical marijuana program. Dr. Finn discussed the differences between marijuana and cannabinoids, highlighting that marijuana is not a medication but a plant, and it is poorly regulated and tested for contaminants. Whereas cannabinoids, or cannabis-based medications, are natural and have standardized THC and THC/CBD content (Document 2).

Dr. Finn emphasized that one of the main platforms for legalizing marijuana use for both medical and recreational purposes is that legalization will help the opioid epidemic that has resulted in a record of drug overdose deaths across the country. However, Dr. Finn said, despite legalizing medical marijuana in 2000 there has been no positive impact on Colorado's drug deaths, and the expansion of medical marijuana across other states has not helped the country's opioid problem. Dr. Finn added that cannabis users are more likely to develop opioid use disorder or misuse their opioids and have higher depression and anxiety scores, as well as other negative psychiatric effects. Also, states with medical marijuana programs typically have higher opioid overdose deaths than non-medical marijuana states which is why, Dr. Finn said, any state looking to expand their medical marijuana program should have very tight guard rails on the program.

Dr. Finn provided a number of statistics and information on adolescent cannabis use and opioids, the increasing risk of cannabis use and depression, cannabis use and its links to self-harm and mortality risk, and the dangers of cannabis use and prenatal exposure.

Dr. Finn also spoke in depth about the production of marijuana and stated that law enforcement is fighting cartels all over the state of Colorado. Legalization of marijuana was supposed to stop the black-market trade; however, it is thriving. Houses are being rented and used for the making of marijuana and Dr. Finn discussed how the illegal growing operations create numerous dangers.

Dr. Finn's suggestions for South Dakota included the support of a FDA drug-development process for cannabinoids, including evidence-based dosing guidelines of cannabis-based medications, supporting a potency cap, eliminate home grow operations, tracking, monitoring, and documenting the public health impact.

Representative Deutsch asked if there was anything good about medical cannabis. Dr. Finn said that it is important to understand that there are components to the plant that may be useful in certain medical conditions, and if there was a cannabinoid that was proven and effective for certain medical conditions he would be supportive of it. However, Dr. Finn said, the products people are buying in the dispensaries are poorly tested, poorly regulated, frequently contaminated, and may have significant drug interactions, particularly in the elderly population. Dr. Finn added that it comes down to a public health and safety concern and marijuana has failed every metric as it relates to public health and safety, and he recommended proceeding with caution.

Representative Perry asked why Dr. Finn recommended moving away from home grow operations when the argument for home grow is that small businesses would prosper. Dr. Finn responded that in Colorado's experience, home grow operations are breeding grounds for the illegal market. Also, the products are not able to be tested so there is no way of knowing what products have been used on those plants, and home grow operations cause the state to lose out on their revenue.

Senator Smith inquired why there isn't bigger campaign to fix the issues in Colorado if the situation is so dire. Dr. Finn said it is because of the media bias and the money the industry is pulling in. He has tried to work with media across the state and they don't want to hear about it, but rather want to glorify an industry that generates a lot of money for the state of Colorado.

North Dakota Department of Health (ND DOH)

Mr. Jason Wahl, Medical Marijuana Division Director, ND DOH, discussed North Dakota's program implementation timeline from the passage of their initiated measure in November 2016 to December 2019 when the final dispensary opened (Document 3). Mr. Wahl outlined North Dakota's laws regarding their medical marijuana program, and stated that North Dakota does not have reciprocity with other states, nor do they recognize medical marijuana cards from other states, their dispensed product is not to cross state lines, and is to stay in the container with the labels attached.

To obtain a medical marijuana card in North Dakota, Mr. Wahl said a patient has to suffer from one of the qualifying debilitating conditions determined by the North Dakota Legislature, and they must obtain a written certification from their healthcare provider who must be licensed in North Dakota and have a license in good standing.

Mr. Wahl described the information technology system North Dakota uses to register patients and trace marijuana manufacturing facilities and dispensaries. Mr. Wahl covered the amount of active patient registry cards, dispensary implementation, types of usable marijuana, and compliance testing required by the state. Prior to transporting any marijuana or marijuana product to the dispensary, Mr. Wahl said, the flower lot or process lot is subject to sampling and applicable compliance tests.

Mr. Wahl also listed other considerations like employer and employee relationships and prohibited acts. Mr. Wahl said that the way the law is written in North Dakota, it is up to the employer to decide how employees with medical marijuana cards will be addressed; and, prohibited acts include such topics as not being able to use or dispense marijuana on school grounds.

Representative Deutsch asked how North Dakota's program is working for children. Mr. Wahl said North Dakota has less than 30 minors registered in the program, with a minor constituting anyone under the age of 19. Mr. Wahl said overall, they have heard very positive comments regarding the medical use of marijuana from parents of the children registered.

Senator Smith asked if there were any red flags or major concerns North Dakota has experienced or will be expecting down the road. Mr. Wahl said when North Dakota implemented the program, they were looking for potential red flags. They, too, heard concerning information from Colorado and were aware that one of the most problematic areas was centered around the home grow operations. Mr. Wahl said the North Dakota Legislature removed the home grow language from the initiated measure, and while bills have come forward for the allowance of home growing, the legislature has not allowed it. Mr. Wahl said they did their best to ensure that a well-regulated program was implemented following guidance from the federal level and discussions with other states. So far, they have received positive comments from law enforcement that the program has not created any issues from their standpoint. Mr. Wahl recommended creating a relationship with law enforcement to get their input.

Representative Goodwin asked if the program has been profitable for North Dakota or if it has cost the state money. Mr. Wahl said all of the expenses for the Division of Medical Marijuana come from the fees: $90,000 every two years from the dispensaries, $110,000 from the two manufacturing facilities every two years, as well as the $50 application fee from the qualifying patients, and $200 every year for the agents in the program as well. With those fees, North Dakota is able to take care of all the expenses and have not only met their expenses, but the fund balance continues to go up.

Tribal Perspectives

Mr. Ross Garelick Bell, representing the Crow Creek, Yankton, Rosebud, and Oglala Sioux Nations, brought forth some key issues from the tribal perspective. Mr. Garelick Bell said the tribes are watching what the state is doing for implementation and to see how the cross-boundary issues will work. Mr. Garelick Bell said each tribe is pushing their own medical marijuana resolution and policy statements and implementing their own commissions on how to set up crops and monitor and regulate those, along with distribution, in order to comply with tribal laws. As they are interested in providing product to state dispensaries, Mr. Garelick Bell said they want to make the crops available to the state regulator to make sure the product meets and complies with state regulations.

Mr. Garelick Bell commented that one of the issues the tribes particularly brought forward was medical marijuana cards and if they would be honored at dispensaries that are off reservation land if their card was issued by a doctor from the tribe or another program such as Indian Health Services. Mr. Garelick Bell said the tribes also want to make sure that tribal identification cards would be regarded as acceptable identification for the purchase of medical marijuana.

Senator Breitling asked if any concerns or issues existed in regard to transportation between the reservation traffic and the rest of the state. Mr. Garelick Bell said the federal government and the Department of Justice exempted any enforcement against medical marijuana activities and South Dakota was one of the states listed in particular which would cover tribes that are in the same boundary jurisdiction, so it would not be considered a trafficking or interstate commerce issue.

Ms. Jennilee Rooks, Cannabis Commissioner, Oglala Sioux Tribe, explained to the committee what her role as a cannabis commissioner entails and updated them on where the Oglala Sioux Tribe is at with their medical cannabis program.

Ms. Rooks said they are still in the setup mode for the entire industry. Their focus has been on the ease of access, doctors or naturopaths who will be making the recommendations, the medical cards, and driving under the influence restrictions. Ms. Rooks said they are also working on the home growing process to ensure that those who choose to grow at home will have the ability to test their product for safety reasons. Another area of focus, Ms. Rooks said, has been distinguishing certain dispensaries for medical purposes only. As the tribe legalized both medical and recreational marijuana, they want to avoid recreational marijuana taking over and potentially leaving medical users unable to obtain what they need.

Senator Breitling asked how the tribe's medical card process was going to work and if each tribe would have their own process. Ms. Rooks responded that their tribe will have their own process as they are one of the only tribes that legalized both medical and recreational marijuana. She said they are working on recruiting a doctor or a naturopath who would be located in the area who can make the recommendations for what type of cannabis a patient would need to use and who would work hand in hand with the patient's medical doctor to determine if the patient's illness falls under the category of what their ordinance allows. Ms. Rooks added that the cards would only work on the reservation to ensure that the users would stay on the reservation as well as obtain their product there.

Public Testimony

Mr. Kittrick Jeffries, Dakota Cannabis Consulting, Rapid City, commented on Mr. Wahl's presentation pointing out some of the negative impacts their program has created. Mr. Jefferies spoke on the limitation of dispensary licenses and said that can cause dramatic fighting and huge valuations when it comes to selling and purchasing those licenses. Mr. Jefferies commented that North Dakota drew a 50-mile ring around each dispensary which makes it difficult for rural residents to obtain the product they need.

Mr. Jefferies also commented on Dr. Finn's presentation and recommended that the committee not punish home growers by not allowing them to test their product at a licensed facility. Mr. Jefferies said if a person is cultivating at home, the state should give priority testing to licensed holders, but should also allow licensed testing facilities to open up their testing to the public.

Mr. Jeremiah M. Murphy, lobbyist, Cannabis Industry Association of South Dakota, said the association supports the recommendations SDAHO proposed. Mr. Murphy said the change is consistent with the goal of the committee and would improve the statute and would serve the doctors because they would not be put in a position to speak to something outside of their lane and it would also serve the original intent of the measure because, theoretically, it means more doctors would be inclined to write prescriptions because it would remove the hesitations caused by the extra requirements.

Mr. Murphy touched on earlier discussion around the home grow programs and strongly urged the committee members to stand with the voters and not eliminate it. Growing at home is one of the few ways medical patients could get marijuana, and Mr. Murphy pointed out if the Legislature eliminates the ability to do so, it will make it harder for people who have a need to be able to meet that need. Mr. Murphy said rather than eliminating it there should be discussions on how to limit and enforce it to keep black market pockets from emerging.

Mr. Murphy also urged against municipal ownership and stated that bringing the government into a business where the government doesn't have experience would risk making it more difficult for patients to get the medicine they choose to get. Mr. Murphy said this would be a radical change to the statute the people voted for, and it is important to reserve government ownership of property and business to those areas where it is needed.

Representative Goodwin asked if municipal ownership should be up to the city or not. Mr. Murphy said his organization would strongly resist that option. Municipal ownership was not included for a reason, Mr. Murphy noted, and that reason was because they believe the private sector can meet the need and it would not be good public policy to include that permission.

Subcommittee Discussion and Adjournment

The subcommittee discussed ideas for the upcoming meetings and agencies they would like to hear from.

Senator Smith said there are certain significant issues to look at such as the home grow process and searches and seizures. Senator Smith commented on the length of the initiated measure and said this was teachable moment for everyone, voters included, because there's a possibility many of the voters did not know everything that was contained in the measure due to its substantial length.

Representative Rehfeldt commented that she would like to hear more information on testing centers and the processes for the integrity of marijuana and THC levels.

Senator Breitling reminded everyone of Governor Noem's website and encouraged anyone with concerns to visit the website for more information.

Senator Smith moved, seconded by Representative Perry, that the Medical Marijuana Study Subcommittee be adjourned. Motion prevailed on a voice vote.

The subcommittee adjourned at 2:59 p.m.