City of Milbank ORDINANCE 839, Sept. 2021

ORDINANCE 839
An ORDINANCE ADDING CHAPTER 113 TO THE REVISED ORDINANCES OF THE CITY OF MILBANK CREATING LICENSING PROVISIONS FOR CANNABIS ESTABLISHMENTS
Be It Ordained by the City Council of the City of Milbank that Title 5 of the Revised Ordinances of the City of Milbank is hereby amended by adding new Chapter 113 as follows:
113.01: PURPOSE AND INTENT
The City Council of the City of Milbank enacts the following licensing ordinances in order to ensure that cannabis establishments within the municipal boundaries of the City operate in a manner which complies with state laws and regulations, protects the health, safety, and welfare of the general public, prevents potential conflicts and issues arising from ownership and employees, recognizes certain safety and security considerations, and minimizes risk of unauthorized use or access of cannabis by the general public. 
113.02: DEFINITIONS
Unless an alternative definition is explicitly stated in this section, this chapter utilizes the definitions for cannabis-related terms which are defined by SDCL 34-20G-1.
Cannabis (or Marijuana): all parts of any plant of the genus cannabis, whether growing or not, in its natural and unaltered state, except for drying or curing and crushing or crumbling. The term includes an altered state of marijuana absorbed into the human body. The term does not include fiber produced from the mature stalks of such plant, or oil or cake made from the seeds of such plant. The term does not include the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than three-tenths of one percent on a dry weight basis.
Cannabis Cultivation Facility: this term is defined as a legally licensed entity that acquires, possesses, cultivates, delivers, transfers, transports, supplies, or sells cannabis and related supplies to a cannabis establishment.
Cannabis Dispensary: this term is defined as a legally licensed entity that acquires, possesses, stores, delivers, transfers, transports, sells, supplies, or dispenses cannabis, cannabis products, paraphernalia, or related supplies and educational materials.
Cannabis Establishment: cannabis cultivation facility, a cannabis testing facility, a cannabis product manufacturing facility, or a cannabis dispensary.
Cannabis Product Manufacturing Facility: this term is defined as a legally licensed entity that acquires, possesses, manufactures, delivers, transfers, transports, supplies, or sells cannabis products to a cannabis dispensary.
Cannabis Products: any concentrated cannabis, cannabis extracts, and products that are infused with cannabis or an extract thereof, and are intended for use or consumption by humans. The term includes edible cannabis products, beverages, topical products, ointments, oils, and tinctures
Cannabis Testing Facility: this term is defined as a legally licensed entity legally authorized to analyze the safety and potency of cannabis.
Department: the South Dakota Department of Health
113.03: LICENSE REQUIRED
(a) No cannabis establishment may be located or operate in the city without the appropriate valid and current cannabis establishment license issued by the city pursuant to this article. A violation of this provision is subject to the general penalty provision in Chapter XX.16.  Each day of the violation constitutes a separate offense.
(b) No cannabis establishment may be located or operate in the city without the appropriate valid and current cannabis establishment registration certificate issued by the Department pursuant to rules promulgated under SDCL 34-20G. A violation of this provision is subject to the general penalty provision in Chapter 1.16. Each day of the violation constitutes a separate offense.
113.04: LICENSE APPLICATION
(a) An application for a cannabis establishment license must be made on a form provided by the city. No other application form will be considered.
(b) The applicant must submit the following:
   1. Application fee of $5,000. The 
   City will reimburse $2,500 for 
   applicants who fail to obtain a 
   registration certificate from the 
   South Dakota Department of 
   Health.
   2. An application that will include, 
   but is not limited to, the following:
       i. The legal name of the 
       prospective cannabis 
       establishment;
       ii. The physical address of the 
       prospective cannabis 
       establishment that meets the 
       zoning requirements in Title 
       17.42A as well as any location 
       requirements pursuant SDCL 
       34-20G and the administrative 
       rules promulgated thereunder. 
       iii. The name, address, and birth 
       date of each principal officer, 
       owner, and board member of the 
       proposed cannabis 
       establishment.
       iv. A sworn statement that no 
       principal officer, owner, or board 
       member has been convicted of a 
       violent felony offense in the 
       previous ten (10) years in any 
       jurisdiction. 
       v. Any additional information 
       requested by the city.
113.05: ISSUANCE OF LICENSE
(a) The city will issue a license unless:
   1. The applicant has made a false 
   statement on the application or 
   submits false records or 
   documentation; or
   2. Any owners, principal officer, or 
   board member of the applicant is 
   under the age of twenty-one (21) 
   years; or
   3. Any owner, principal officer, or 
   board member of the applicant has 
   been convicted of a violent felony 
   offense in the previous ten (10) 
   years in any jurisdiction;
   4. The proposed location does not 
   meet the applicable zoning 
   requirements under Title 17.42A;
   5. The proposed location does not 
   meet all location requirements 
   under SDCL 34-20G and the 
   administrative rules promulgated    thereunder;
   6. The license is to be used for a 
   business prohibited by state or 
   local law, statute, rule, ordinance, 
   or regulation; or
   7. Any owner, principal officer, or 
   board member of the applicant has 
   had a cannabis establishment 
   license revoked by the city or a 
   registration certificate revoked by 
   the state; or
   8. An applicant, or an owner, 
   principal officer, or board member 
   thereof, is overdue in payment to 
   the city of taxes, fees, fines, or 
   penalties assessed against or 
   imposed upon the applicant in 
   relation to any cannabis 
   establishment; or
   9. The applicant will not be 
   operating the business for which 
   the license would be issued.
(b) In the case of an application for a cannabis dispensary license, the city will reject the application if the limit on the number of cannabis dispensaries has been reached. 
(c) The license must be posted in a conspicuous place at or near the entrance to the cannabis establishment so that it may be easily read at any time.
113.06: CITY NEUTRALITY AS TO APPLICANTS
(a) Upon request from the Department as to the City’s preference of applicants, the City will neither support nor oppose any registration certificate application under consideration by the Department. Likewise, if inquiry is made by the Department, the City will abstain from endorsing any application as beneficial to the community. 
113.07: NUMBER OF CANNABIS DISPENSARIES
(a) No more than two cannabis dispensaries shall be allowed to operate in the City at any time. 
113.08: EXPIRATION OF LICENSE AND RENEWAL
(a) Each license expires one year from the date of issuance and may be renewed only by making application as provided in Section 113.04. Application for renewal must be submitted at least thirty (30) days before the expiration date. The license holder must continue to meet the license requirements to be eligible for a renewal.
(b) The renewal fee is $5,000. The City will reimburse $2,500 for applicants who fail to obtain a renewal of their registration certificate from the Department.
(c) Failure to renew a license in accordance with this section may result in additional fees. Upon expiration of the license, the city may order closure of the cannabis establishment.
(d) If a license holder has not operated an establishment for which it holds a license in the preceding twelve (12) months, the license will not be renewed.
113.09: SUSPENSION
(a) A license may be suspended if the license holder or an employee or agent of the license holder:
   1. Violates or is otherwise not in 
   compliance with any section of this 
   article.
   2. Consumes or smokes or allows 
   any person to consume or smoke 
   cannabis on the premises of the 
   cannabis establishment.
   3. Knowingly dispenses or provides 
   cannabis or cannabis products to 
   an individual or business to whom 
   it is unlawful to provide cannabis 
   or cannabis products.
(b) A license may be suspended if the license holder has its Department-issued registration certificate suspended, revoked, or not renewed by the Department or if the registration certificate is expired.
(c) A license may be suspended if the license holder creates or allows to be created a public nuisance at the cannabis establishment. 
113.10: REVOCATION
(a) A license may be revoked if the license is suspended under Section 113.09 and the cause for the suspension is not remedied.
(b) A license may be revoked if the license is subject to suspension under Section 113.09 because of a violation outlined in that section and the license has been previously suspended in the preceding 24 months.
(c) A license is subject to revocation if a license holder or employee of a license holder:
   1. Gave false or misleading 
   information in the material 
   submitted during the application 
   process;
   2. Knowingly allowed possession, 
   use, or sale of non-cannabis 
   controlled substances on the 
   premises;
   3. Operated the cannabis 
   establishment or the business of 
   the cannabis establishment for 
   which a license is required under 
   this article while the license was 
   suspended;
   4. Repeated violations of Section 
   113.11;
   5. Operated a function of a 
   cannabis establishment for which 
   the license holder was not licensed 
   (e.g., a licensed cannabis 
   cultivation facility conducting 
   cannabis testing functions without 
   a cannabis testing establishment 
   license);
   6. A license holder, or an owner, 
   principal officer, or board member 
   thereof, is delinquent in payment 
   to the city, county, or state for any 
   taxes or fees related to the 
   cannabis establishment;
   7. A license holder, or an owner, 
   principal officers, or board member 
   thereof, has been convicted of, or 
   continues to employ an employee 
   who has been convicted of, a 
   disqualifying felony offense as 
   defined by SDCL 34-20G; or
   8. The license holder has its 
   Department-issued registration 
   certificate suspended, revoked, or 
   not renewed or the registration 
   certificate is expired.
   9. The license holder allows a 
   public nuisance to continue after 
   notice from the City.
113.11. SUSPENSION AND REVOCATION PROCESS
(a) The license holder will receive a notice of intent to suspend or notice of intent to revoke informing the license holder of the violation and the city’s intention to suspend or revoke the license. The notice will be hand delivered to the license holder or an employee or agent of the license holder or sent by certified mail, return receipt requested to the physical address of the cannabis establishment. 
(b) If the license holder disputes the suspension or revocation, the license holder has ten (10) days from the postmark date on the notice or the date the notice was hand delivered to request a hearing before a hearing panel, which will consist of the Mayor, Finance Officer, and Council Chairperson.
(c) A suspension will be for thirty (30) days and begins ten (10) days after the postmark date on the notice or the date the notice is hand delivered unless the license holder exercises its rights to process and appeal, in which case the suspension takes effect upon the final determination of suspension.
(d) A revocation will be for one (1) year and begins ten (10) days after the postmark date on the notice or the date the notice is hand delivered unless the license holder appeals the revocation, in which case the revocation takes effect upon the final determination of revocation.
(e) The license holder who has had the license revoked may not be issued any cannabis establishment license for one year from the date the revocation became effective.
113.12: APPEAL
An applicant or license holder who has been denied a license or renewal of a license or who has had a license suspended or revoked under this article may appeal to the City Council by submitting a written appeal within ten (10) days of the postmark on the notice of denial, nonrenewal, suspension, or revocation. The written appeal must be submitted to City Hall 1001 E 4th Ave, Ste. 301, Milbank, South Dakota, 57252. The appeal will be considered by the City Council at a regularly scheduled meeting within one month of the receipt of the appeal.
113.13: LICENSES NOT TRANSFERRABLE
No cannabis establishment license holder may transfer the license to any other person or entity either with or without consideration, nor may a license holder operate a cannabis establishment at any place other than the address designated in the application.
113.14: HOURS OF OPERATION FOR DISPENSARIES
No cannabis dispensary may operate between the hours of 12:00 a.m. and 7:59 a.m., any day of the week.
113.15: LIABILITY FOR VIOLATIONS
Notwithstanding anything to the contrary, for the purposes of this article, an act by an employee or agent of a cannabis establishment that constitutes grounds for suspension or revocation will be imputed to the cannabis establishment license holder for purposes of finding a violation of this article, or for purposes of license denial, suspension, or revocation, only if an officer, director or general partner or a person who managed, supervised or controlled the operation of the cannabis establishment, knowingly allowed such act to occur on the premises.
113.16: PENALTIES
Any person who operates or causes to be operated a cannabis establishment without a valid license or in violation of this article is subject to a suit for injunction as well as prosecution for ordinance violations. Such violations are punishable by a maximum fine of five hundred dollars ($500.00). Each day a cannabis establishment so operates is a separate offense or violation.
Severability. The provisions of this ordinance are severable. If any provision of this ordinance or the application thereof to any person or circumstance is held to be invalid, such invalidity shall not affect other provisions or applications of this ordinance which can be given effect without the invalid provision or application.
Passed and adopted this 30th day of August 2021.
/s/ Pat Raffety, Mayor
ATTEST:
/s/ Cynthia Schumacher, 
Finance Officer
This ordinance shall become effective twenty days after publication of this notice in the official newspaper, thereby repealing all ordinances or parts thereof in conflict herewith unless a referendum is timely involved prior thereto.
1st Reading:  8-23-21
2nd Reading:  8-30-21
Adopted: 8-30-21     
Published:  9-8-21
Effective: 9-28-21     
 

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Milbank, SD 57252
(605) 432-4516

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