Sioux Falls city councilors and medical cannabis advocates alike say they’re concerned about a potential loophole in the city’s licensing regulations that could allow a business to increase their odds of becoming one of the city’s five dispensaries.
Emmett Reistroffer, a consultant for the cannabis industry who’s been a regular at Sioux Falls meetings on the topic, said during the public input portion of Tuesday’s City Council meeting the city’s licensing ordinance specifies “only one application per location is allowed.”
However, Reistroffer said he’d been told by City Attorney Stacy Kooistra that his interpretation of the law was “one application per location, per applicant.”
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This, Reistroffer said, created a situation where numerous applications could be put in through LLCs, or a number of representatives from one company, as long as they could afford the $75,000 fee for each application, which would be fully refunded if they weren’t chosen.
“We just don’t want this to come down to who has the most money buys the most raffle tickets and has the best odds,” Reistroffer said.
City Councilor Greg Neitzert in an interview on Thursday he thought there was valid concern.
Neitzert pointed to the application itself, which has a question that reads, “I certify that only one application for this business has been submitted for this location.”
That leads to several questions, he said: is a business simply a name? Does it have to exist? Does it need to be registered in some way?
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Neitzert said he’s reached out to Mayor Paul TenHaken’s administration with his concerns, as well as what he sees as a solution — someone with the city being able to look at the locations on these applications before they’re entered into the lottery.
TenHaken’s administration directed requests for comment on the topic to Kooistra, who pointed to the wording of the city’s licensing ordinances in response.
While Reistroffer has disagreed with Neitzert on many aspects of the city’s marijuana laws, he said he was appreciative that his concerns about the lottery had been taken seriously, and agreed with Neitzert’s proposed solution.
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“I do have a concern of whether it’s going to be changed or not,” said Neitzert, who pointed out that doing it through an amendment would take time, requiring meetings, publication schedules and other considerations.
He’s hopeful it could be done administratively, he said, adding that it’s easier said than done.
“I think there needs to be a little bit more urgency about how to get this right,” he said.