South Dakota Medical Cannabis Company Sues Health Department Over Alleged Overreach

A South Dakota medical cannabis company is suing the state Department of Health (DOH) alleging overreach, attempts to enforce unpromulgated rules, and the improper issuance of violations which has led to damages of over $1 million, KELO reports. The case by 605 Cannabis dates back to an inspection of their facility in January which the company claims was carried out improperly and conducted while the facility was partially closed due to a blizzard. 

In the complaint, 605 claims that DOH inspections are required under law to occur during normal business hours and that the health department’s inspection occurred while 605 was operating with limited staff, “not fully operational, not open during its normal business hours, and key staff members were not present.” 

605 claims that during the inspection, samples of cannabis and products were taken and the DOH later issued a report containing 19 alleged violations. On February 8, the health department issued an emergency order, identifying nine serious violations from the inspection, and suspending 605’s manufacturing and cultivation licenses, the report says. 

In the complaint, 605 outlines the nine DOH violations and contends that the agency erred in its evaluation and subsequent enforcement action and that minor violations, such as a camera blind spot, have been remediated. The company indicated it has attempted to reach a settlement with the DOH but has been unsuccessful. 

605 claims a loss in revenue of $1.3 million due to the suspension of its licenses and that its rights have been violated as a result of the DOH misapplying and/or circumventing proper rulemaking procedures.