Council postpones off-sale alcohol license for Cannabis Company

Council members questioned the legal gray area for approving retail on-off sale licenses for Rapid City Cannabis during the council’s Monday night meeting.

The licenses would be for a retail (on-off sale) malt beverage and SD farm wine license and a retail (on-off sale) wine and cider license at 3075 N. Plaza Drive, Suite B. The council voted 8-2 to postpone the item until the Oct. 3 meeting. Council members Bill Evans and Lance Lehmann voted against the postponement.

Council member Pat Jones pulled the item from the consent public hearing items. He said he was against it last week and encouraged his fellow council members to vote against it Monday. Jones said they’ve been told medical cannabis dispensaries will only distribute to those with medical cards and never once has alcohol come into play.

“The idea of let’s go have happy hour at the medical marijuana place, ‘buy two joints and get your first drink free,’ and that concerns me,” he said while holding paper signs with a green plus sign and an image of two pints of beer. “These two things don’t go together. They don’t go together and they shouldn’t go together, and we have to take great concern in the direction we want Rapid City to go with this.”

Jones said this is the first request for a license at a dispensary and the decision the council makes will set the tone for the future.

“I believe we have a responsibility to hold this to what we said and were told it would be — not a bar, not a place to go and get a beer or a glass of wine, which I have nothing against, I’m quite fond of it myself,” Jones said. “But not at a dispensary where we were told it was going to dispense medical marijuana and that’s the only reason it was going to be there.”

Jones said it was offensive to him the company wanted to add beer and wine licenses.

Council member John Roberts said he wanted to caution his fellow council members from voting in the direction Jones asked.

“Every time we go down that road and get sued, we lose,” he said.

Roberts said because the state doesn’t disallow it, it doesn’t mean the state allows it. He said it seems like every time the city tries to challenge it, it loses.

“You may have the absolute best, moral right to do this, but that doesn’t put you above state law,” he said. “Unfortunately, our hands are tied on this dais, we can only do what the law allows us to do.”

Council member Bill Evans said he agrees with Roberts and these are two separate questions.

“If we want to change the ordinances and the laws then we need to change this, but right now granting these particular licenses are in accordance with those,” he said. “We have an obligation to do so. If we don’t like that, we need to change the law for the future.”

Community Development Director Vicki Fisher said the city’s ordinance states that if a dispensary is 1,000 feet from a school or 500 feet from a church, playground, childcare center or public park, it would be permitted. She said this site is in the permitted category and wasn’t brought before the council as a conditional use permit.

Fisher said her department reached out to the city attorney’s office and in looking back at state law, some states do create cannabis laws so alcohol can’t be sold in addition to dispensaries.

“South Dakota did not structure their medical cannabis laws that way,” she said. “We are operating off of that state law.”

Fisher said the city has other pharmacies in town that do sell alcohol. She said it can be sold as retail but not consumed on site.

City Attorney Joel Landeen said there probably is a gray area.

“State law doesn’t prohibit it so you can’t rely on state law,” he said.

Landeen said the council has to look at the character and fitness of the applicant and the appropriateness of the location for an alcohol license.

“You could argue that you do not believe a dispensary is an appropriate location, however, it complies with our zoning,” he said.

During the meeting, the council approved the second second reading of the 2023 budget, which includes an additional $80,000 for a sustainability coordinator with an allocation from sales tax, with a 6-4 vote. Council members Jason Salamun, Jesse Ham, Lehmann and Roberts voted against the budget.