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Legalizing Marijuana in South Dakota: Implications for Employers and Landlords | Ballard Spahr LLP


South Dakota has legalized recreational and medical marijuana. On November 3, 2020, South Dakota voters approved Initiated Measure 26 (Measure 26) to legalize medical marijuana and also passed Constitutional Amendment A (Amendment A), which makes recreational marijuana use protected by state law. These new laws become effective July 1, 2021. However, the South Dakota Department of Revenue has until April 1, 2022, to issue rules and regulations related to the commercial sale, cultivation, and testing of marijuana. Prudent and proactive South Dakota employers and commercial and residential landlords are preparing for this major legal and cultural change.

The Upshot

  • Amendment A legalizes the possession, use, transport, and distribution of marijuana for adults age 21 and older. Individuals may possess or distribute 1oz or less of marijuana. The state Department of Revenue will issue marijuana-related licenses for commercial cultivators and manufacturers, testing facilities, wholesalers, and retailers, but local governments may regulate or ban the establishment of licensees in their communities.
  • Measure 26 legalizes the medical use of marijuana by qualifying patients. Patients must obtain a registration card from the state Department of Health. Cardholders may possess 3oz or less of marijuana and may obtain permission to grow their own plants.
  • Amendment A does not stop employers from restricting the use of marijuana in the workplace or from firing employees who come to work under the influence of marijuana.
  • Measure 26 does not stop employers from prohibiting employees from working while under the influence of marijuana or using marijuana at the workplace. But Measure 26 requires that employers accommodate employees who use medical marijuana the same as employees who used prescribed prescription drugs, unless that would conflict with an employer’s obligations under federal law or regulations—such as truck and bus drivers, railroad and airline employees, transit system workers, and pipeline and hazardous material workers who are subject to Department of Transportation guidelines.
  • Commercial and residential landlords can prohibit the use or cultivation of recreational marijuana on their properties, but Measure 26 is silent as to whether a landlord can prohibit the use of medical marijuana on their properties by tenants. A property owner can restrict guests, clients, customers, or other visitors from smoking marijuana on a property. However, a landlord may not refuse to lease to or penalize a person solely for the person’s status as a registered qualifying patient of medical marijuana. Thus, further clarification in the enabling regulations may provide guidance in the future as to whether landlords may prevent tenants from using medicinal marijuana on or in their properties.

The Bottom Line

Amendment A and Measure 26 raise workplace issues for employers, and eventual implementing legislation may raise many more. Employers and landlords should establish written policies and protocols for dealing with Amendment A and Measure 26 and seek legal advice before these laws go into effect and before making employment decisions involving marijuana use that is legal where an employee lives or works.

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