‘Illegal Cannabis’ cuts into Medical Marijuana sales, growers tell committee
State panel considers recommending a legislative summer study on the topic.
The state’s legislative oversight committee on medical marijuana was thrust into the world of synthetic THC on Monday as members heard complaints about how loosely regulated, hemp-derived products are affecting South Dakota’s medical marijuana industry.
The Medical Marijuana Oversight Committee heard from business owners and the State Public Health Laboratory director during a meeting in Pierre. They’re concerned about the growth in synthetically altered, hemp-derived products, sold under terms including delta-8 THC and delta-10 THC, which are compounds that can produce a high similar to marijuana. The compound that gives marijuana its high is delta-9 THC.
As with marijuana, the synthetic products take the form of smokable flower, pre-rolled joints, vape oil and edibles. Unlike marijuana, the companies that produce them aren’t subject to the testing, security and labeling requirements attached to the state’s legal medical cannabis market.
Alternatives not only pose a health risk, the witnesses told the oversight committee, but can cut into demand for medical marijuana since the products can be purchased without a medical marijuana patient card and can be loaded with large enough quantities of THC variants to act as a stand-in for marijuana.
Congress authorized hemp growing with the 2018 farm bill, and South Dakota has become the largest producer of hemp in the country after legalizing it four years ago. In that time period, the availability and variety of hemp-derived marijuana alternatives has exploded.
The Legislature passed House Bill 1125 last winter to address the “diet weed” market. The law, which went into effect in July but is being challenged in court, bans the creation or sale of some products created through chemical modification of hemp. Possession of the products is still legal.
The new law bans four THC variants, State Public Health Laboratory Director Tim Southern told the committee, but several others remain available. THC-A products, for example, remain widely available in smoke shops that had previously sold other products that are now illegal to sell.
Med card slowdown, legislative summer study proposed
South Dakota’s medical marijuana program has seen a drop in patient cardholders since the beginning of the year, which business owners blame in part on the state’s lack of regulatory enforcement of the THC-A products found on store shelves.
Those stores are “illegal dispensaries selling cannabis under the guise of hemp,” Dakota Herb CEO Dalton Grimmius told South Dakota Searchlight after the meeting.
One problem, said committee members who work in law enforcement, is testing capacity in the state.
Dakota Herb’s Alan Welsh told committee members that the dispensary has had to cut prices of their tested, state-approved product below non-regulated competitor prices to incentivize patients to purchase through legal channels and retain their medical marijuana cards.
Welsh added that he’s privately tested two “hemp” products sold in Sioux Falls. Not only did they have more contaminants than the state allows for medical marijuana, Welsh said, but they also contained more than .03% THC by weight – the legal threshold for hemp.
“We wouldn’t have been allowed to sell that product in our store, and yet we’re forced to compete with that,” Welsh said. “It’s ridiculous.”
The committee did not take action on the concerns raised at the meeting. Instead, its members suggested that the committee should recommend a legislative summer study. That would have to wait until the summer of 2025, because this summer’s study committees are underway.
Lawmakers on the committee are concerned any policy recommendations outside of the medical marijuana industry would overstep their own committee’s jurisdiction. The committee may make an official decision and recommendation at its October meeting.
Law enforcement, lobbyists, health lab leader: Legislature playing ‘whack-a-mole’
Jeremiah Murphy, a lobbyist for the state’s cannabis industry, said legalizing “everything” would offer an opportunity for better regulation and licensing of the products.
Voters will have the opportunity to do that through a recreational marijuana ballot measure in November.
Sioux Falls Police Chief John Thum compared policing and regulation of the drugs, such as THC-A, to “whack-a-mole.” Southern agreed.
The health lab director was among several witnesses – and committee members – who suggested that a federal fix is necessary. Congress is currently working through a new farm bill, and committee members suggested reaching out to South Dakota’s congressional delegation to ask that the bill’s legal hemp provision clarify that the crop isn’t meant to be used for the production of intoxicants.
Until the federal government takes action, Southern said, South Dakota should be ready to harness the expertise of its agriculture, health and law enforcement agencies to craft laws around fake pot and its purveyors across the state.
“I think this is something we do legislatively, with very smart, well-written legislation that doesn’t allow modern garage chemists to wiggle out from under a law,” Southern said. “Otherwise, it will be nothing but a game of whack-a-mole now and forever more.”
