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House panel to consider recreational marijuana tax structure

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Jeremiah Murphy is a lobbyist for the Cannabis Industry Association of South Dakota.

A House panel will hear a bill that sets up a taxation structure for recreational marijuana sales.

The structure will only go into effect if voters approve recreational marijuana at the ballot box in November.

That ballot question is not official yet. Petitions to put it on the ballot are still circulating ahead of a May 3 deadline.

In 2020, voters approved a constitutional amendment legalizing recreational marijuana, but it was struck down by the courts.

The bill taxes marijuana at 15 percent.

Jeremiah Murphy is a lobbyist for the Cannabis Industry Association of South Dakota. He says the city where the sale takes place gets 5 percent and the counties get 8.5 percent.

“Those go back to the counties where they’re collected. They must be used for a restricted purpose — either to fund states attorneys, sheriffs or indigent defense and those activities in counties where counties are responsible for all of those,” Murphy says. “Finally, 1.5 percent goes to the state. That 1.5 percent will be more than enough to fund the state’s regulatory requirement under this bill.”

The House Taxation Committee meets Tuesday to hear the bill.

A Senate bill setting up a recreational marijuana program has not been scheduled for a hearing.

Lee Strubinger is SDPB’s Rapid City-based news and political reporter. A former reporter for Fort Lupton Press (CO) and Colorado Public Radio, Lee holds a master’s in public affairs reporting from the University of Illinois-Springfield.