SIOUX FALLS, S.D. – The state of South Dakota is facing a new lawsuit, stemming from an inspection that shut down a portion of a medical marijuana business.
The lawsuit, filed by 605 Cannabis Cultivation and the makers of Badlands Products, alleges overreach, improper issuance of violations and attempts to enforce un-promulgated rules, which have led to damages of over $1 million.
The company’s case, which dates back to a January 2023 inspection of their facility, claims the inspection was carried out improperly, while the business was partially closed due to a blizzard.
605 claims that despite their limited staff and closure, the DOH proceeded to inspect the facility in violation of a rule that requires inspections to occur during business hours.
The company alleges that during this inspection, samples of cannabis and products were taken. The DOH later issued a report alleging 19 violations. 605 claims that the report did not distinguish if the violations occurred within the company’s cultivation or manufacturing facilities.
On February 8, the DOH issued an emergency order, identifying nine serious violations from the inspection, and suspending 605’s manufacturing and cultivation licenses.
The company alleges that the DOH has inaccurately interpreted medical cannabis laws, failed to follow applicable laws pertaining to inspection of facilities, failed to communicate internally, and has a fundamental lack of understanding related to the cannabis plant and the process by which medical cannabis extractions are performed.
In their complaint, 605 claims a loss in revenue of $1,300,000 from the suspension of its manufacturing and cultivation licenses, and says its rights have been violated as a result of the DOH misapplying and/or circumventing proper rulemaking procedures.
In a statement, Melissa Mentele of 605 Cannabis maintains they were treated unfairly, saying, “As a company, we have chosen to protect the patients, the businesses, and the medical cannabis industry in our state by filing suit to ensure that the precedent set will not destroy patient access.”
The company says that they have fully complied with the DOH throughout the process, voluntarily recalling the products identified by the DOH. They maintain that no products pose a risk of health and safety to the public.
The South Dakota Department of Health cannot comment on the pending litigation. While the 605 Cannabis filing is for an emergency injunction, there is no date yet for a judge to review the lawsuit.
