State’s first licensed marijuana shop’s closing is an “absolute business decision”

HARTFORD, S.D. (Dakota News Now) — It did not take long for the ripple effects to spread from the results of Tuesday’s election.

South Dakotans overwhelmingly voted “no” on a measure to legalize recreational marijuana. While use of cannabis for medical purposes remains legal, one shop which sells products for those patients is already calling it quits.

Two-and-a-half years ago, Unity Rd. in Hartford became the first licensed and non-tribal marijuana dispensary to open in South Dakota. But within 24 hours after Tuesday’s election, co-owner B.J. Olson decided to it the first of nine dispensaries in the Sioux Falls area to close. The company announced that move in a Friday facebook post.

Olson told Dakota News Now on Monday that Unity Road has lost hundreds of thousands of dollars since opening in June 2022. It had lost money every month until the last couple months after trimming expenditures, including the cutting of staff members.

There are no signs of sustainability for Olson and co-owner Adam Jorgenson without a recreational marijuana market.

“I am a business person and this is an absolute business decision,” Olson said. “I don’t see the positive outcome for us continuing down the road of medical marijuana.”

Unity Rd. started under the premise that marijuana would be legal for all South Dakota adults, which 54 percent of South Dakotan voters approved in 2020 with Amendment A. Voters had also approved medical marijuana on that ballot.

A year later, in November of 2021, Unity Rd. was one of five dispensaries that earned its license to sell cannabis via a ping pong ball lottery at City Hall.

Just one week after that, the state’s Supreme Court — in a case instigated by Gov. Kristi Noem — struck down Amendment A in a 4-1 decision, ruling that the measure was unconstitutional because it violated the state’s requirement that constitutional amendments deal with just one subject.

But Unity Rd. opened anyway in June of 2022, selling cannabis to those licensed to take it medically, with some patients crying one and calling the chance to treat her pain with cannabis “amazing.”

For 22 years, Kerie Jones had suffered severe migraine headaches and chronic neck and back pain from being hit by a drunk driver. She was relieved she finally had a natural, legal option in her home state to medicate the pain after years of doctors prescribing her opioids that gave her irritating side effects.

“They tried to put me on oxycodone, morphine, and all kinds of stuff that made me really cranky,” Jones said. “My meds would be up and down. So with cannabis, I don’t have that. I don’t get high. I don’t get affected by it. I’m a better human, a better mom, and I’m able to function normally without all the pain of migraines.”

Olson and co-owner Adam Jorgensen opened Unity Rd. in 2022 with hope that voters would again say “yes” to recreational that November.

They didn’t, by six percent (53%-47%). And voters rejected a similar measure again last week, this time by over 10 percent.

Olson said the medical-only market is simply way too small to make money.

“Right now, there’s 12,000 patients, nearly 100 dispensaries open,” Olson said. “The handcuffs that are put on us by the state to run this program — it’s just not feasible.”

In fact, Olson said state lawmakers have done everything they can to make sure dispensaries don’t succeed.

“We’ve paid our taxes. We’ve paid all of our licenses. The only people that have really made money in this industry is the state,” Olson said.

“They got their licensing fees every single year. They got their taxes every single month, and yet, they did nothing to help us. I have not yet seen one educational program about cannabis and that was what our license fees were supposed to go to, and it absolutely didn’t happen. Disgusting.“

Olson provided a couple examples of the “handcuffs” the state puts on the marijuana industry.

One is the difficulty of obtaining a license to become a customer.

“Patient access is absolutely horrible,” Olson said. “You‘ve got your three major medical systems in the state (Sanford Health, Avera Health, and Rapid City-based Monument Health) who said they want nothing to do with it, which makes people turn to other alternatives. I challenge people to look at who their doctors are and if their doctors would prescribe them something like this. More than likely, the answer is ’no,’ and the state has done nothing to get people the access they need.”

Another example of what Olson considers over-regulation is the deck stacked against him on his way out of the industry.

“There‘s a ton of laws in place showing me what I cannot do to stay open, but as soon as I close these doors, I have 30 pounds of marijuana and there’s not one single law on the book that tells me what I need to do with it,” Olson said.

“I don‘t have the ability to distribute it to another dispensary because I don’t own it. The state has put all these laws in place, but they’ve done nothing to help the industry, especially when it comes to closing. I have no idea what to do with this controlled substance.”

Olson expressed extreme disdain for the way Protecting South Dakota Kids — the group that led the charge against IM-29 — organized and messaged, particularly leaders of PSDK kids depicting those leading the charge for IM-29 and in the cannabis industry as drug pushers.

“What‘s crazy about this industry is everybody thinks the people in the dispensaries are drug dealers,” Olson said. “They‘re not. They‘re South Dakotans. They‘re entrepreneurs like I am. They‘re farmers. They‘re other people who took a shot in this industry in this state to try and elevate themselves to the next level and go somewhere else with a new business, and now they’re starting to drop like flies.”

Meanwhile, another local dispensary, Genesis Farms, says it is still in the medical marijuana industry for the long haul.

“We knew since the very beginning that this was a risky business but our hearts were in it for the right reasons,” said Genesis Farms chief operations officer Emmett Reistroffer.

“Being founded by patients, employing patients and folks impacted by the drug war in the past, we are dedicated to helping patients regardless of the political outcomes, and we are going to continue fighting for patients in the current medical program. So, we weren’t impacted by the vote in a significant way.“

Olson is proud he was able to help relieve his patients’ pain, and that despite losses, Unity Rd. was investing in the Hartford community, where he has lived for 22 years.

“I’ve donated money to different school programs, different athletic programs,” Olson said. “All I wanted to do when we started this venture is to find a successful avenue in my community and to do something positive and productive, but I really do feel like that was pulled out right from underneath me from the get-go.”

Unity Rd. plans to close its doors at the end of the day on Dec. 6, the last day of its license with the city of Hartford. The shop might close sooner if it sells all of its product before that, and Olson plans on having a clearance sale with items priced to be moved.

The last few days have been filled with mixed emotions for Olson. The Tea native will continue running other small businesses he started, including a tech company, a T-shirt operation, and real estate projects. And, he’ll continue to seek other ventures while fighting the continued uphill battle of relaxed marijuana laws in his home state.

“When the vote didn‘t go my way, I was extremely sad,” Olson said. “But, now, it‘s motivation. Motivation to tell the right story. I‘m going to continue to help the cannabis industry in the state of South Dakota, regardless of if I have a dispensary or not, because I think it‘s the right thing to do for people and I feel it’s absolutely wrong to incarcerate people for something as little as a gummy, something we have hundreds of here every day. It’s just absolutely insane.”

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