US cities cutting back on permitted cannabis businesses

South Dakota’s second-largest city might cut the number of licensed medical cannabis dispensaries allowed in town by half.

The reduction under consideration in Rapid City – limiting MMJ dispensaries to five, down from 10, according to KOTA – is the latest example of what appears to be a nationwide trend.

Most states with legal cannabis access give significant authority to city and county governments to regulate or ban commercial cannabis activity.

Recent results suggest both local lawmakers and their constituents are keen to ban or restrict.

On Election Day, voters in at least five jurisdictions across the country voted to keep limits or outright bans on cannabis stores in place.

In some cases, that might be welcome news to existing cannabis retail operators complaining of market saturation and shrinking margins.

That’s not the case in Rapid City, where one operator is plotting a lawsuit to stop the City Council from reducing marijuana business licenses.

“Patients aren’t asking for this,” said Kittrick Jeffries, the founder and CEO of Puffy’s Dispensary, who announced plans to sue, according to KOTA.

“This is politicians that are asking for the number of licenses in Rapid City to be reduced,” he added. “I haven’t heard of any patient come up and say, ‘you know, we want less options.’”

The City Council will vote on reducing licenses Wednesday, according to KOTA.

Rapid City is one of several cities across the country that’s reevaluating the local cannabis industry.

In late October, the City Council in Port Hueneme, California, voted to reduce the number of permitted marijuana businesses allowed in town by one-third.

That’s partly because two cannabis stores that did open owe the city more than $50,000 each, according to The Ventura County Star.

Other larger cities with established legal cannabis retail have also cut back on licensed businesses.

In San Francisco, a moratorium on new retail permits imposed in the summer of 2023 is still in effect.

That came amid the collapse of high-profile ventures including a “cannabis convenience” concept launched in 2022 by the co-founders of MedMen Enterprises.

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