South Dakota

South Dakota carved out an unusual middle path in 2024: broad prohibition of chemically converted intoxicating hemp cannabinoids, but a preserved lane for naturally-derived hemp Delta-9 in non-inhalable formats. HB 1125, signed by Gov. Kristi Noem on March 18, 2024 and effective July 1, 2024, prohibits the production, sale, and distribution of any ‘chemically modified or converted industrial hemp,’ including delta-8 THC, delta-9 THC derived by chemical conversion, delta-10 THC, THC-O-acetate, HHC, THCP, THCB, and any other THC isomer, analog, or derivative. The bill targets exactly what the industry has come to call ‘diet weed’ or ‘marijuana light’ — the loophole products created by acid-catalyzed isomerization of CBD. The law includes explicit carve-outs for naturally-derived cannabinoids, non-psychoactive cannabinoids, and cannabinoids in topical cream products. HB 1125 defines an ‘industrial hemp product’ as a finished product made from industrial hemp with a total delta-9 tetrahydrocannabinol concentration of not more than 0.3%, derived from or produced by processing industrial hemp — meaning naturally extracted Delta-9 in a hemp beverage that stays under 0.3% by dry weight remains lawful. National hemp beverage brands with naturally-derived Delta-9 (Cann, Floral, others) can and do ship into South Dakota addresses. Smokable and inhalable hemp — flower, pre-rolls, vape cartridges — was already prohibited under South Dakota law regardless of THC content, and HB 1125 reinforces that closure. Sen. Ryan Maher unsuccessfully attempted to amend HB 1125 to preserve an exemption for products containing only trace amounts of cannabinoids, which raised concerns among CBD retailers about oversweep — those concerns were largely dispelled by the naturally-derived carve-out. Active retail enforcement began July 14, 2025, giving retailers a year to clear noncompliant inventory. Each noncompliant product is a separate Class 2 misdemeanor: fines up to $500 per product, up to 30 days jail, and possible additional penalties. Enforcement runs through local law enforcement, with SDDANR and the AG’s office coordinating. The 2026 session brought SB 61, a bill that would have gone significantly further — broadly prohibiting non-medical hemp-derived intoxicants including any THC isomer above 0.4mg per container (an early state alignment with the incoming federal Section 781 ceiling). SB 61 died thanks to opposition led by the South Dakota Industrial Hemp Association, but its introduction signals continued legislative appetite for tighter restrictions, and expect a rebooted effort in the 2027 session using Section 781 as legislative cover. Medical cannabis was voter-approved via Initiative Measure 26 in November 2020, and the program has operated through SDDOH-licensed dispensaries since 2021. Patients receive cards after physician recommendation, and possession limits allow up to 3 ounces flower or equivalent over 14 days. Adult-use legalization has been rejected three times: Initiated Measure 26 in 2022, SB 21 in the 2024 session, and Amendment H in November 2024. Voter preference for continued adult-use prohibition appears settled. For the federal cliff on November 12, 2026, South Dakota is one of the closer alignments: HB 1125’s exclusion of chemically converted cannabinoids parallels Section 781’s synthetic cannabinoid exclusion, and South Dakota’s narrow hemp Delta-9 lane will contract further under Section 781’s 0.4mg per-container federal ceiling. Naturally-derived hemp Delta-9 beverages at 2.5-10mg per can will not survive that ceiling, and the state’s post-cliff hemp market will look meaningfully smaller — likely limited to low-mg CBD tinctures, topicals, and formulations that meet both the state’s naturally-derived requirement and the incoming federal per-container ceiling.