South Dakota Medical Marijuana Company Sues State for $1.3 Million

The store has been shuttered since Feb. 8.

A medical cannabis company in rural South Dakota that had its cultivation and manufacturing licenses suspended in February filed suit against the state for $1.3 million in damages, claiming its permits were improperly yanked and that the situation is threatening to drive it out of business.

605 Cannabis filed suit against the South Dakota Department of Health, reported, primarily because its facility underwent a formal state inspection in January despite being closed due to a blizzard. As a result, key staff were not present to satisfy various inquiries by inspectors, and that led to 19 violations being cited by DOH staff and the license suspensions in February.

Specifically, 605 Cannabis’s permits were suspended for nine “serious” violations, which included failing to test cannabis products before releasing them for sale, adding improper additives to marijuana products, the presence of delta-8 THC in some products, and more.

605 Cannabis’s lawsuit rejects each of the nine allegations and maintains that it followed all legal protocols and that its products are safe for consumers.

The company told that it tried to reach a settlement deal with the DOH, but that hasn’t worked yet, primarily due to the state’s concern over delta-8 and terpenes found in products. 605 Cannabis’s stance that delta-8 is a naturally occurring cannabinoid and not an additive.

The lawsuit says that 605 Cannabis has had to shutter its operations since Feb. 8 because of the loss of its licenses, as well as had to lay off employees and may go under, reported.

The company is also asking a judge to issue an injunction that will allow it to resume operations while the lawsuit proceeds.

The state DOH did not comment on the case.

John Schroyer

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