South Dakota Marijuana Industry Supports Crackdown on Hemp-Derived THC
South Dakota’s licensed marijuana businesses are rallying behind law enforcement as the state cracks down on intoxicating hemp-derived THC products, which industry representatives say are undermining the medical cannabis program.
The state’s medical marijuana market, projected to reach $66 million in sales this year, relies on just 14,000 registered patients. Industry advocates argue that hemp-derived alternatives sold outside the regulated dispensary system are drawing patients away and threatening the program’s long-term viability.
Pennington County Sting Targets Hemp THC
The Pennington County Sheriff’s Office recently carried out a sting operation in Rapid City, where officers purchased hemp-derived THC products at eight smoke shops and convenience stores. Items included gummies, THC beverages and other edibles marketed as hemp-based.
The Sioux Falls Police Department has also conducted a compliance check of hemp products and is awaiting lab results before determining whether charges will be filed.
Marijuana Businesses See Hemp as Unfair Competition
Jeremiah Murphy, a lobbyist for the Cannabis Industry Association of South Dakota, told the state’s Medical Marijuana Oversight Committee that unregulated hemp-derived THC products are putting the state’s 116 licensed cultivators, manufacturers and dispensaries at a disadvantage.
With only a modest patient base, the state’s MMJ operators say every lost customer counts — and hemp access is drawing consumers away from licensed dispensaries.
Legal and Regulatory Gray Areas
The rise of hemp-derived intoxicating products is not unique to South Dakota. Across the United States, businesses have used ambiguities in the 2018 Farm Bill to sell products containing delta-8, delta-10 and other hemp-based THC compounds.
Lawmakers in Washington, D.C., have tried to address the issue by redefining hemp under federal law, but political disagreements in the Senate stalled recent efforts. In South Dakota, lawmakers passed a 2024 ban on “chemically synthesized” THC, but hemp-based products continue to circulate in retail shops.
Medical Cannabis Industry Stands to Gain From Enforcement
For South Dakota’s medical marijuana operators, enforcement actions against hemp products represent an opportunity to protect their relatively small market. Sales of hemp THC products through convenience outlets bypass the medical registration process, physician consultations and state tax revenues — all while competing directly with dispensaries.
With projected MMJ sales of $66 million this year, the industry argues that ensuring compliance and curbing illicit hemp sales is essential to sustaining both patient trust and market growth.
Policy Clashes Continue
As enforcement ramps up, pressure is likely to build on state lawmakers and regulators to further restrict hemp THC sales. The conflict between hemp retailers and licensed marijuana businesses reflects a broader national struggle to balance access, safety and regulation in overlapping cannabis and hemp markets.
For now, South Dakota’s marijuana industry is making its stance clear: if the state wants a stable, regulated cannabis sector, hemp-derived intoxicants cannot be allowed to operate unchecked.
