South Dakota to Crack Down on Hemp Product Sales Starting July 14

Chemically modifying industrial hemp or converting CBD into synthetic compounds, such as delta-8 THC, is prohibited in South Dakota, where law enforcement officials will begin seizing noncompliant products starting July 14.

Pennington County State’s Attorney Lara Roetzel and local law officials sent a June 10 letter to Genesis Farms LLC, a licensed medical cannabis company with 10 dispensaries, including two in Rapid City, and a cultivation and manufacturing facility in Box Elder.

The letter, also signed by Rapid City Police Chief Don Hedrick and Pennington Sheriff Brian Mueller, warned that Genesis Farms could be in violation of the hemp legislation that former Gov. Kristi Noem signed into law last year.

“It has come to my attention that your business may be selling products that violate the law,” Roetzel wrote. “The continued sale of these products in our community cannot be tolerated.”

It’s unclear how many businesses received the letter.

The 2024 signed legislation, House Bill 1125, prohibits the manufacturing or sale of hemp-derived products containing compounds like delta-8 THC, delta-10 THC, THC-O and HHC, or other chemically manipulated cannabinoids. The goal for state lawmakers was to eradicate intoxicating hemp products from unregulated storefronts.

Genesis Farms did not immediately respond to a Cannabis Business Times request seeking clarity on whether the products in question are being sold in the company’s licensed medical cannabis dispensaries or elsewhere.

H.B. 1125 modified South Dakota Codified Law to state that no person or entity may:

1. Chemically modify or convert industrial hemp as defined in §38-35-1, or engage in any process that converts CBD into delta-8 THC, delta-9 THC, delta-10 THC, or any other tetrahydrocannabinol isomer, analog or derivative; or
2. Sell or distribute industrial hemp or an industrial hemp product that contains chemically derived cannabinoids or cannabinoids created by chemically modifying or converting a hemp extract.

However, the law does not restrict South Dakota residents from possessing such products purchased online from out-of-state distributors.

Those who violate the law are subject to a Class 2 misdemeanor, which carries a maximum penalty of 30 days in jail and/or a $500 fine for each instance of a noncompliant product being manipulated or sold in South Dakota.

Roetzel wrote in the June 10 letter that state lawmakers intended to close a legal loophole for products containing such hemp derivatives after “many unpredictable and harmful products” were sold for human consumption.

“Please be advised that starting July 14, 2025, our law enforcement agencies will be enforcing this statute,” she wrote. “Any products found in violation of SDCL 34-20B-119 will be subject to legal action, including the seizure of the noncompliant products. Each individual package or product that violates this statute constitutes a separate Class 2 misdemeanor, potentially resulting in multiple charges during a single inspection.”

While the law took effect on July 1, 2024, the state’s policing agencies had no plans at that time to immediately prioritize enforcement mechanisms, South Dakota Searchlight reported. Enforcement often requires laboratory testing to differentiate synthetic from natural cannabinoids in consumable hemp products.

Under H.B. 1125, cannabinoids produced by decarboxylation from a naturally occurring cannabinoid acid without the use of a chemical catalyst are OK. So, too, are nonintoxicating cannabinoids, such as CBD, and cannabinoids that are present in non-ingestible products like a topical cream.

While H.B. 1125’s enforcement efforts appear to be teed up for next month, South Dakota Attorney General Marty Jackley has long supported cracking down on intoxicating hemp products. In March 2024, he joined a coalition of 21 state attorneys general that requested the U.S. Congress fix language in the 2018 Farm Bill that allowed “bad actors” to exploit the marketplace.

“Illicit suppliers are stealing legitimate brand names and packaging harmful and dangerous products as candy, snacks and cereal,” Jackley said last year. “These copycat hemp products put people, especially children, at risk. They also jeopardize lawful hemp production for agricultural purposes here in South Dakota.”

Specifically, the 2018 Farm Bill, which federally legalized industrial hemp cultivation, doesn’t regulate finished goods but rather requires hemp plants to contain no more than 0.3% delta-9 THC on a dry-weight basis during a pre-harvest field test.

While U.S. lawmakers have attempted to redefine hemp, the farm bill’s reauthorization was kicked down the road in 2023 and again in 2024, leaving many state lawmakers to rewrite the rules in their jurisdictions in the name of public health and safety.

In South Dakota, it’s now up to businesses to ensure the products on their shelves are compliant or face the hand of the law.

“It is important that you and your business evaluate whether products you sell contain unlawful synthetic drugs,” Roetzel wrote. “It is your responsibility as a business to understand the law and to know what is lawful and unlawful.”