Sold or not?
Spearfish’s one cannabis dispensary license missing in action
- By Alex Portal Black Hills Pioneer
SPEARFISH — In December 2021, Déjà VU SD, LLC, which is owned by parent company Nirvana, in Arizona, won the right to gain Spearfish’s only medical marijuana dispensary license; now, nearly a year later, there seem to be no signs of such an establishment opening in Spearfish.
“The company that won the lottery drawing on Dec. 6, 2021, has not completed the process to obtain the dispensary license from the city,” wrote Spearfish Finance Officer Michelle De Neui, in an email to the Pioneer.
De Neui explained that when Déjà VU won the name draw for the license, the South Dakota Department of Health (DOH) was not yet issuing registrations for cannabis establishments. So the city gave Déjà VU a provisional license as a placeholder so that when the DOH was ready to start registering establishments, they would have proof of authorization to open a dispensary in Spearfish.
“Once they received their registration with the state of South Dakota, they would then come back to the city – provide us with their registration number – and pay the remainder amount for the license to obtain the license from the city of Spearfish,” De Neui said.
According to the DOH’s website, Déjà vu SD, LLC, is registered with the state as an authorized dispensary operator in Spearfish, but because the company has not completed the process with the city no dispensary license has been issued by Spearfish.
Confounding the issue is the fact that – somehow – Déjà VU claims to have sold its Spearfish dispensary license to another party.
“I was told that the license was sold. I wasn’t told to who, but I don’t have any more information than that,” Char Gamble of Emerald Consulting, Inc., told the Pioneer in an email.
Gamble was hired by Déjà VU to advise them on marijuana laws in South Dakota. However, she said she was left out of the loop when a separate company, based out of California, was brought in to broker the sale of several of the company’s assets in South Dakota, including the Spearfish license.
Gamble said the reason for the company wanting to sell was due to the state Supreme Court ruling that the constitutional amendment legalizing recreational pot was unconstitutional.
“We’re the only state in the whole United States that ever passed medical and recreational (marijuana) and then pulled back what the voters voted for,” Gamble explained in an earlier interview with the Pioneer. “When Déjà VU came in, they came into a market where medical and rec was approved and then it was retracted. And that wasn’t something they anticipated happening.”
Several attempts to contact other parties with Déjà VU, its parent company Nirvana, and to find out the name of the California sales broker by the Pioneer were unsuccessful; however, James Qwynn, an owner/operator with From the Hills, a medical cannabis facility in Lead, and who has actively been trying to obtain a permit to sell marijuana in Spearfish, told the Spearfish City Council that his partners had been approached by representatives from Déjà VU to purchase their license for $750,000.
Regardless of what was actually sold, to whom, or how much it was sold for, Spearfish made changes to its cannabis-licensing ordinance in July, which would negate such a sale even if a license had been issued.
“(The provisional license) was issued to Déjà VU, LLC, so they would have to sell the LLC,” De Neui explained. “If Déjà VU, LLC is not going to own it anymore, that’s new ownership … if everything switches over, then they go back in the queue so they would essentially lose that license.”
De Neui said that a 100% ownership change is prohibited by the city’s ordinance. If at least one of the original licensees remains attached to the business, then a license can be transferred with a $1,000 fee, but if the current license-holder wants to completely dissolve the business, then the license is forfeit, and the next name that was drawn in December would be eligible to obtain it providing all fees and background checks are met. The next name currently in line is From the Hills.
The provisional license issued by the city to Déjà VU expires on Jan. 29, 2023. If Déjà VU doesn’t complete the licensing process by then, or if a completely separate entity shows up laying claim to it, Spearfish’s dispensary license reverts into the waiting hands of From the Hills, which was slated to begin selling THC products today at its Lead store, and is in the process of opening a Deadwood shop.